Professor Department of Industrial Engineering & Management I I T Kharagpur

Dr. Manoj Kumar Tiwari

1.

2.
3.

This is the path that has the longest length through the project. The shortest time that a project can conceivably be finished is the critical path. The following computational procedure are employed for determining the critical path. Earliest Occurrence time (EOT) Latest Occurrence time (LOT) Slack

EOT refer to the time when the event can be completed at the earliest. EOT (i) =Max [EOT (k)+ d(k, i) ]
Earliest occurrence time of event k ( k precedes i) Duration of activity (k, i)
2 13 13 2 12 15

EOT (1)=0 EOT (2)= EOT (1)+ d(2, 1) = 0+13=13 EOT (3)= EOT (1)+ d(3, 1) = 0+12=12

1 0

2 3 12 8 4

EOT (4)= Max[(EOT (2)+ d(2, 4)), (EOT(3)+ d(3,4) )]

=13+2 =15 12+8=20
2 13

=20

EOT (5)= Max[(EOT (2)+ d(2, 5)), (EOT(4)+ d(4,5) )] 13+15=28 20+2=22
0

13
1

15 28 2

28
12 3 12 8

4 20

Earliest Star Time (EST) of an activity is obtained as; EST (i, j) = EOT(i) Earliest finish Time (EFT) of an activity is obtained as: EST (i, j) = EOT(i)+d(i, j)

LOT refer to the latest allowable time by which an event can occur. Duration of LOT (i) =Min [LOT (j) - d(i, j) ] activity (i, i)
Latest occurrence time for j ( j follows i)
2 13

13

15

LOT (5)=28 LOT (4)= LOT (5) - d(4, 5) = 28-2=26 LOT (3)= LOT (4)- d(3, 4) = 26-8=18

1 0 2

5 28 28

12

3 12 18

4 20 26

LOT (2)= Min[(LOT (5) - d(2, 5) ), (LOT (4) - d(2, 4))] = Min[(28-15=13), (26-2=24)] = 13
2 13 13 1 0 0 13 15 5 28 28 2

12

3 12 18

4 20 26

LOT (1)= Min[(LOT (2) - d(1, 2) ), (LOT (3) - d(1, 3))] = Min[(13-13=0), (18-12=6)] =0

Latest finish Time (LFT) of an activity is obtained as: LFT (i, j) = LOT(j) Latest Star Time (LST) of an activity is obtained as; LST (i, j) = LFT (i, j)-d(i, j)

Slack is a difference of LOT and EOT for each event. Event LOT EOT Slack(LOT-EOT)
5 4 3 2 1 28 26 18 13 0 28 20 12 13 0 0 6 6 0 0

The critical path is marked by events which have 0 slack. It stars with the beginning events and terminates with the end event. Here, path 1-2-5 is critical path

Network diagram for critical path (having 0 slack of events)

0
2
13 13

0
0

0
15 5 28 28 2

1 0

13

12

3 12 18 6

4 20 26 6

Float is the maximum amount of time that this activity can be delay in its completion before it becomes a critical activity, i.e., delays completion of the project
There are three measures of floats.

1.

Total float, 2. Free float, 3. Independent float

Total float (TF):

It is the extra time available to complete the activity if it is started as early as possible, without delaying the completion of the project. TF (i,j)= LOT (j)- EOT (i)- d(i, j) TF(2,4)= LOT (4)- EOT (2)- d(2, 4) =26-13-2=11
2 EOT= 13 LOT= 13 d(2,4)=2 4 LOT(4) EOT= =26 13

Free float (FF): It is the float under most favorable

condition.
FF (i,j)= EOT (j)- EOT (i)- d(i, j) FF(2,4)= EOT (4)- EOT (2)- d(2, 4) =20-13-2=5

Independent float (TF): It is the float under most

adverse condition.
IF (i,j)= EOT (j)- LOT (i)- d(i, j) IF(2,4)= EOT (4)- LOT (2)- d(2, 4) =20-13-2=5

The table summaries all types of time and floats . The critical activities (1-2) and (2-5) have zero (0) floats. This shows that there is no flexibility associated with them. Thus, the earliest starting time is same as the latest starting time and the earliest finishing time is the same as the latest finishing time.
Duration Earliest start time (i,j) Earliest finish time (i,j) Latest start time(i,j) Latest finish time (i,j) Total float Free float Independent float(weeks)

Activity (i,j)

a (1,2) b (1,3)

13 12

0 0

13 12

0 6

13 18

0 6

0 0

0 0

c (2,4)
d (3,4) e (2,5) f (4,5)

2
8 15 2

13
12 13 20

15
20 28 22

24
18 13 26

26
26 28 28

11
6 0 6

5
0 0 6

0
0 0 0

1.

Early start schedule: The schedule in which all activity

start as early as possible.
All event occurs at their earliest because all activates start at their earliest starting time and finish at their earliest finish tine. There may be time lags b/w the completion of certain activities and the occurrence of events which these activities lead to. All activities emanating from an event begin at the same time. it shows a continuous attitude toward the project and a desire to minimize the possibility of delay.

2. Late start schedule: The schedule arrived at when all

activities are started late as possible.
1.

2.
3.

All events occurs at their latest b/c all activities start at their latest finishing time. Some activities may start after a time lag subsequent to the occurrence of the preceding events. All activities leading to an event are completed at the same time. It shows a desire to commit resources late as late posible.

Activity (i,j)

Duration

Earliest start time (i,j)

Earliest finish time (i,j)

a (1,2) b (1,3) c (2,4) d (3,4) e (2,5) f (4,5)

13

13

12
2 8 15 2

0
13 12 13 20

12
15 20 28 22

2 1 3 4

10

15

20

25

30

Activity (i,j)

Duration

Latest start time(i,j)

Latest finish time (i,j)

a (1,2) b (1,3) c (2,4) d (3,4) e (2,5) f (4,5)

13

13

12
2 8 15 2

6
24 18 13 26

18
26 26 28 28

2 1 3 0 5 10 15 20 25 4

30

Project Evaluation and Review Technique (PERT)

U S Navy (1958) for the POLARIS missile program Multiple task time estimates (probabilistic nature) Activity-on-arrow network construction Non-repetitive jobs (R & D work) is based on the assumption that an activitys duration follows a probability distribution instead of being a single value

PERT

Three time estimates are required to compute the parameters of an activitys duration distribution: pessimistic time (tp ) - the time the activity would take if things did not go well most likely time (tm ) - the consensus best estimate of the activitys duration optimistic time (to ) - the time the activity would take if things did go well

Mean (expected time):

te =

tp + 4 tm + to
6

Variance: Vt = (stander deviation

())2

tp - to
6

Variability in PERT analysis is measured by variance, stander deviation.

Variance = sum of variances of activity duration on the critical path The standard deviation of the project duration probability distribution is computed by adding the variances of the critical activities (all of the activities that make up the critical path) and taking the square root of that sum
Stander deviation = (sum of variances of activity duration on the critical path )1/2
activity (1-2) (2-5) tp 21 24 to 9 10 2 2.33
=(tp to)/6

Variance=2 4.00 5.43

Thus, the stander deviation of critical path duration = (4+5.43)1/2=3.07

Draw the network. Analyze the paths through the network and find the critical path. The length of the critical path is the mean of the project duration probability distribution which is assumed to be normal Probability computations can now be made using the normal distribution table.

Probability Range
X + X + 2 X + 3

Probability 0.682 0.954

0.998

X-3

X-2

X-

X+

X+2

X+3

1.

The probability of completion is completed within specified time as follows: First find, D-T
Z=

Where,

T = project mean time

= project standard mean time D = (proposed ) specified time

2.

Then, obtain cumulative probability up to Z by looking probability distribution of stander deviation.

Z
-3.0 -2.8 -2.6 -2.4 -2.2 -2.0 -1.8 -1.6 -1.4 -1.2 -1.0 -0.8 -0.6 -0.4 -0.2 0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8 2.0 2.2 2.4 2.6 2.8 3.0

Cumulative Probability
0.001 0.003 0.005 0.008 0.014 0.023 0.036 0.055 0.081 0.115 0.159 0.212 0.274 0.345 0.421 0.500 0.579 0.655 0.726 0.788 0.841 0.885 0.919 0.945 0.964 0.977 0.986 0.992 0.995 0.997 0.999

Given that:

project mean time (T)=28

project standard mean time ()=3.07

proposed (specified) time (D) Z Cumulative probability

20
25 30

(20-28)/3.07 = -2.6
(25-28)/3.07= -1.0 (30-28)/3.07= -0.6

0.005
0.159 0.726

Fined the value from previous table.

Critical Path Method (CPM)

E I Du Pont de Nemours & Co. (1957) for construction of new chemical plant and maintenance shut-down Deterministic task times Activity-on-node network construction Repetitive nature of jobs In contrast of PERT model, CPM model is developed for projects which are relatively risk-free PERT approach is probabilistic while CPM approach is deterministic In CPM network analysis we work with single time estimates. In CPM network basically we analyze variation in activity time as a result of change in recourse assignment. The main thrust of CPM analysis is on time cost relationship.

1.
o o

The cost associated with a project has two components :

Direct cost: It is incurred on direct material and direct labor. Indirect cost: It consist of overhead items like indirect supplies, rent, insurance, managerial services etc.

2.
3.

Activity of the project can be expedited by crashing which involves employing more recourses:
Crashing reduces time but enhances direct costs b/c of factors like overtime payment, extra payment, and wastage. The relationship b/w time and direct activity cost cab be reasonably approximated by a downward straight line.

Crashing: reducing project time by expending additional resources Crash time: an amount of time an activity is reduced Crash cost: cost of reducing activity time Goal reduce project duration at minimum cost

Crash cost Crashing activity

Slope = crash cost per unit time Normal cost Crash time Normal Activity

Normal time Activity duration

4. Indirect costs associated with the project increases linearly with project duration.

Linear relation

project duration

1.

2.

3.

4.

CPM analysis seeks to examine the consequences of crashing on total cost. Indirect cost shows linear relation with project duration thus, the relationship b/w direct cost and project duration is important and obeys following procedure. The procedure used in this respect is generally as follows: Obtained the critical path in network. Determine the project duration and direct cost. Examine the cost-time slope (crash time per minute) of activities on critical path obtained and crash the activity which has the least slope. Construct new critical path after crashing as per previous step. And further determine project duration and cost. Repeat steps 2 and 3 till activities on the critical path are crashed.

The project network depict the activities, duration and direct activity cost. The indirect cost is Rs 2,000 per week.
2

3
4 6

8 5
1

10
6
7

Normal and crash time and cost is listed in the table

Activity Time (week)
Normal Crash

Cost (Rs)
Normal Crash

Cost to expedite per week 6,000 8,000 5,500 3,200 12,000 11,200 6,800 8,700 9,000 70,400 750 2,000 500 600 1,000 2,400 700 900 1,200

1-2 1-3 2-4 3-5 2-5 4-6 5-6 6-7 5-7

8 5 9 7 5 3 6 10 9

4 3 6 5 1 2 1/2 2 7 5

3,000 4,000 4,000 2,000 8,000 10,000 4,000 6,000 4,200 45,200

Find out critical path of the network.

Earliest Occurrence time (EOT)

8 2 17

9
4

20 6

19

8
5
1
5

10
6
7 30 22

9
13 Project duration is 30 week

12

.
8 2 9 17

9
4

20 6

8
0

10
5 6
7 7 30

9
14

21

The critical path of the network is (1-2-4-6-7) The project duration is 30 week The total direct cost is Rs 45,200
0 2 0

9
4

0 6

8
0

10 5 6
7 2 0

9
1

Examine the time-cost slope of activities on the critical path. Time cost slop of activity = (crash cost-normal cost)/ (normal time crash time) Time cost slop of activity 1-2=(6000-3000)/(8-4)=750

Time cost slop of activity 2-4=(5500-4000)/(9-6)=500

Time cost slop of activity 4-6=(11200-1000)/(3-21/2)=2400

Minimum

Time cost slop of activity 6-7=(8700-6000)/(10-7)=900

Activity 2-4 has lowest slop on critical path.

2

8
1

10
5 6 9
7

Hence activity 2-4 is crashed to 6 (as per given table)

Now, the new critical path is 1-2-5-6-7 The project duration is 29 week The total direct cost is Rs 46,700

(45,2004,000+5,500)

Activity 5-6 has the lowest slop on the critical path.

2

3
4 6

8 5
1

10 2
7

Hence , activity 56 is crashed to 2 (as per given data in the table)

Now the new critical path is (1-2-4-6-7) The project duration of this path is 27 week The total direct cost = Rs 49,500

(46,7004,000+6,800)

Activity 1-2 has lowest slop on the new path

Hence , activity 1-2 is crashed to 4 (as per given data in the table)

3
4 6

4
5
1

10
2
7

7 Now the new critical path is (1-2-4-6-7) The project duration of this path is 24 week The total direct cost = Rs 52,500

(49,500 3,000+6,000)

Activity 6-7 has lowest slop on the new path

2

3
4 6

4 5
1

7 2
7

Hence , activity 6-7 is crashed to 7 (as per given data in the table)

Now there are two new critical path (1-3-5-6-7) & (1-3-5-7) The project duration of both path is 21 week (52,500 The total direct cost = Rs 55,200

6,000+8,700)

For both the critical path a common activity 3-5 has lowest slop
2

21/2

4 5
1

10 2
7

5 Now , new critical path (1-2-4-6-7) The project duration of the path is 20 week The total direct cost = Rs 56,400

Hence , activity 3-5 is crashed to 5 (as per given data in the table)

(55,200 2,000+3,200)

For both the critical path a common activity 4-6 has lowest slop
2

21/2

4 5
1

10 2
7

Hence , activity 4-6 is crashed to 21/2 (as per given data in the table)

Now the critical path is again (1-2-4-6-7) The project duration of both path is 19 1/2 week The total direct cost = Rs 57,600

(56,400 10,000+11,200)

With crashing the possible activities direct cost increases and indirect cost decreases.
Project Duration 30 29 27 Direct cost Indirect cost Total cost

Crashed activities

None
(2-4) (2-4) and (5-6)

45,000 46,700 49,500

60,000 58,000 54,000

105,200 104,700 103,500

(1-2), (2-4), and (5-6)

(1-2), (2-4), (5-6) and (6-7) (1-2), (2-4), (3-5),(5-6), and (6-7) (1-2), (2-4), (3-5)(,5-6), (4-6) and (6-7)

24
21 20 191/2

52,500
55,200 56,400 57,600

48,000
42,000 40,000 39,000

100,500
97,200 96,400 96,600 Direct cost + Indirect cost

(Project duration) * (Indirect cost per week=2000)

Crashing costs increase as project duration decreases Indirect costs increase as project duration increases Reduce project length as long as crashing costs are less than indirect costs

Time-Cost Tradeoff
Total project cost Indirect cost

Direct cost

time

Useful at many stages of project management Mathematically simple Give critical path and slack time Provide project documentation Useful in monitoring costs

PERT/CPM can answer the following important questions:

How long will the entire project take to be completed? What are the risks involved? Which are the critical activities or tasks in the project which could delay the entire project if they were not completed on time? Is the project on schedule, behind schedule or ahead of schedule? If the project has to be finished earlier than planned, what is the best way to do this at the least cost?

Clearly defined, independent and stable activities Specified precedence relationships Over emphasis on critical paths Deterministic CPM model Activity time estimates are subjective and depend on judgment PERT assumes a beta distribution for these time estimates, but the actual distribution may be different PERT consistently underestimates the expected project completion time due to alternate paths becoming critical