A project is a series of activities directed to the accomplishment of a desired objective.

Project management can be defined as the coordination of activities with the potential use of many organizations, both internal and external to the business, in order to conduct a large scale project from beginning to end. There are two management science techniques that are used for project management: Program and Evaluation Review Technique (PERT) Critical Path Method (CPM) PERT - Program Evaluation and Review Technique -Developed by U.S. Navy for Polaris missile project -Developed to handle uncertain activity times CPM -Critical Path Method -Developed by Du Pont & Remington Rand -Developed for industrial projects for which activity times generally were known Todays project management software packages have combined the best features of both approaches. Characteristics of PERT/CPM 1. The project consists of a well-defined collection of jobs, or activities when all the activities completed marks the end of the project. 2. The activities may be started or stopped independently of each other, within a given sequence (thus eliminating continuous flow processes). 3. The activities are ordered; that is, they must be performed in technological sequence. 4. Activities may be depended on the completion of another activity CPM -Critical Path Method A tool to determine duration based on the identification of the Critical Path through the activity network. Times are known with some high degree of certainty. Management can determine the duration of a project and concentrate efforts on Critical Path activities. Definition: In CPM activities are shown as a network of precedence relationships using activity-on-node network construction Single estimate of activity time Deterministic activity times USED IN : Production management - for the jobs of repetitive in nature where the activity time estimates can be predicted with considerable certainty due to the existence of past experience. PERT Program Evaluation and Review Technique Time are NOT known well (uncertainty) Statistics used to estimate probability of finishing within a given time. Definition: In PERT activities are shown as a network of precedence relationships using activity-on-arrow network construction Multiple time estimates

Probabilistic activity times

USED IN : Project management - for non-repetitive jobs (research and development work), where the time and cost estimates tend to be quite uncertain. This technique uses probabilistic time estimates. The Six Steps Common to PERT & CPM 1. Define the project and identify each activity 2. Develop relationships among the activities. (Decide which activities must precede and which must follow others.) 3. Draw the network connecting all of the activities 4. Assign time and/or cost estimates to each activity 5. Compute the longest time path through the network. This is called the critical path 6. Use the network to help plan, schedule, monitor, and control the project Use of nodes and arrows Arrows An arrow leads from tail to head directionally Indicate ACTIVITY, a time consuming effort that is required to perform a part of the work. Nodes A node is represented by a circle Indicate EVENT, a point in time where one or more activities start and/or finish.

Review of PERT/CPM A project network can be constructed to model the precedence / order of the activities and the relationship between activities. The Lines of the network represent the activities. The Circles of the network show events. A critical path for the network is a path consisting of activities with zero slack. Time Estimation The person most familiar with the operation and requirements of each activity should submit the three time estimates. These should meet the following criteria: 1) Optimistic Time -- the minimum time period in which the activity can be accomplished, i.e., the time it would take to complete it if everything proceeded better than expected. (labeled a.) 2) Most Likely Time -- the best estimate of the time period in which the activity can be accomplished, i.e., the estimate submitted if one (only) had been requested. (labeled m.) 3) Pessimistic Time -- the maximum time period it would take to accomplish the activity, i.e., the time required if everything went wrong, excluding major catastrophes. (labeled b.) Each event has two important times associated with it : - Earliest time , Te , which is a calendar time when an event can occur when all the predecessor events completed at the earliest possible times - Latest time , TL , which is the latest time the event can occur with out delaying the subsequent events and completion of project. Difference between the latest time and the earliest time of an event is the slack time for that event Positive slack : Slack is the amount of time an event can be delayed without delaying the project completion

Advantages of PERT/CPM Especially useful when scheduling and controlling large projects. Straightforward concept and not mathematically complex. Graphical networks aid perception of relationships among project activities. Critical path & slack time analyses help pinpoint activities that need to be closely watched. Project documentation and graphics point out who is responsible for various activities. Applicable to a wide variety of projects. Useful in monitoring schedules and costs. Benefits Useful at many stages of project management Mathematically simple Give critical path and slack time Provide project documentation Useful in monitoring costs Consistent framework for planning, scheduling, monitoring, and controlling project. Shows interdependence of all tasks, work packages, and work units. Helps proper communications between departments and functions. Determines expected project completion date. Identifies so-called critical activities, which can delay the project completion time. Identified activities with slacks that can be delayed for specified periods without penalty, or from which resources may be temporarily borrowed Determines the dates on which tasks may be started or must be started if the project is to stay in schedule. Shows which tasks must be coordinated to avoid resource or timing conflicts. Shows which tasks may run in parallel to meet project completion date LIMITATIONS 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

Difference between PERT &CPM PERT- It assumes a probability distribution for the duration of each activities. Event oriented Technique used . One time project involve activities. It helps indentifying critical area in projects. cpm The technique was developed in connection with a construction and maintenance projects. It is suitable for establishing a trade-off. It is used for completion of projects. Involving activities of a repetitive nature.

4 5

CPM PERT Uses network, calculate float or slack, identify critical path and Same as CPM activities, guides to monitor and controlling project Uses one value of activity time Requires 3 estimates of activity time Calculates mean and variance of time Used where times can be Used where times cannot be estimated with confidence, estimated with confidence. familiar activities Unfamiliar or new activities Minimizing cost is more Meeting time target or estimating important percent completion is more important Example: construction projects, Example: Involving new activities building one off machines, ships, or products, research and etc development etc

GAME THEORY Game theory may be defined as a body of knowledge that deals with making decisions when two or more intelligent and rational opponents are involved under conditions of conflict and competition. GAME: Every game must have a character of competition and two or more players involved in it with some predetermined rules. The game results either in victory of one or the other or sometimes a draw. Therefore, game represents a conflict between two parties or countries or persons. The study of rational behavior among interdependent agents Agents have a common interest to make the pie as large as possible, but Agents have competing interests to maximize their own share of the pie. An agents rational decisions require anticipating rivals responses. These expectations are not perfect, so uncertainty is a necessary feature of games. Game theory is a mathematical theory that deals with the general features of competitive situations. It places particular emphasis on the decision-making processes of the adversaries. Game theory deals with decisions and situations in which intelligent opponents have conflicting objectives. Game theory is a decision theory in which ones choice of action is determined after taking into account all possible alternatives available to an opponent playing the same game, rather than just by the possibilities of several outcomes.

 Game is defined as an activity between two or more persons involving activities by each person according to a set of rules, at the end of which each person receives some benefit or satisfaction or suffers loss. Strategy: list of all possible actions available to each player. Pure Strategy: a player knows exactly what the other player is going to do, Deterministic situation, Objective is to maximize the gain or to minimize the loss Decision rule to select a particular strategy irrespective of the strategy others may choose Mixed Strategy: all players are guessing as to which strategy is to be selected on a particular occasion with some fixed probability, Probabilistic situation, Objective is to maximize the expected gain or to minimize the expected loss Decision rule to select the combination of strategies with fixed probabilities Pure Strategy is a particular case of Mixed Strategy: probability of the selected strategy = 1 and probability of other strategies = 0 The outcome resulting from a selection of a particular strategy is also known to the players in advance and is expressed in terms of numerical values. Optimal Strategy: the particular strategy by which a player optimizes his gains or losses without knowing the competitors strategies. Value of the Game: the expected outcome per play when players follow their optimal strategy. Payoff : outcome associated with each pair of strategies that one player receives from other players, or a quantative measure of satisfaction a player gets at the end of each play Let vi be the payoff to the player Pi; 1 i n, in n person game. Zero Sum Game: one player wins whatever the other one loses, so that the sum of their net winnings is zero. If vi = 0, then the game is said to be a zero sum game. Two person zero sum game: (Rectangular Game): two player game and the gain of one player is equal to the loss of the other player. ASUMPTIONS: Basic assumptions of the Game: 1. Each Player has finite no. of strategies. The list may not be same for each player. 2. Player A attempts to maximize gains and player B attempts to minimize losses. 3. The decisions of both players are made individually, prior to play with no communication between them. 4. The decisions are made simultaneously and also announced simultaneously so that neither player has an advantage resulting from direct knowledge of other players decision. 5. Both the players know not only the possible payoffs to themselves but also of each other. TWO PERSON ZERO SUM GAME: OPTIMAL SOLUTION:

 The solution of the game is based on the principle of securing the best of the worst for each player. Each player will act so as to maximum his minimum gain or minimum his maximum loss. Known as minimax criterion Developed by J. Von Neuman (father of Game theory Rule: 1.Select the min. element of each row. 2. Select the max element of each column. 3. Select the max element from the column of the min. 4. Select the min element from the row of the max. Gain of one player is the loss of other player Sum of gains to both the players is bound to be zero Depicted by Rectangular Pay-off Matrix PAY OFF MATRIX: A strategy is a course of action taken by one of the participants in a game and the pay-off is the result or outcome of the strategy. An Example:

10,10 -20, 30

100, -30 140, 35

MAXIMIN PRINCIPLE: Players adopts pessimistic attitude and plays safe. Players decides to play that strategy which corresponds to the maximum of the minimum gains for his different courses of action. MINIMAX PRINCIPLE: Similarly, player B wants to play safe. Then he selects that strategy which corresponds to the minimum of the maximum losses. OPTIMAL STRATEGY: Course of action or strategy which puts the player in the most preferred position, irrespective of the strategy of his competitors. Any deviation from this strategy results in a decreased pay-off for the player. VALUE OF GAME:

 Expected pay-off of the play when all the players of the game follow their optimal strategies. Fair if the value of the game is zero. Unfair- if the value of the game is non-zero.

(Saddle Point Exists)

PURE STRATEGY GAME: Chateristics: It is an Two person Zero sum game. It uses pay-off Matrix. It involves Maximin principle and Minimax principle. Its objective is to bring out Optimal strategies for both players. To derive Value of the Game. WHAT IS A SADDLE POIN? The maximizing player arrives at his optimal strategy on the basis of the maximin criterion, while the minimizing player strategy is based on minimax value. The game is solved when the maximin value equals minimax value. And when they both equalize that particular point is called as saddle point. ANALYSIS OF SADDLE POINT: Develop the payoff- matrix. Identify row minimums and select the largest of these as player ones maximin strategy. Identify column maximums and select the smallest of these as the opponents minimax strategy. If the maximin value equals minimax value, the game is a pure strategy game and that value is saddle point. The value of the game of player one is the maximin value and to player two , the value is the nagative of minimax value. PRINCIPLE OF DOMINANCE:

 According to the principle the size of the games pay-off matrix can be reduced by eliminating a course of action that is so inferior to another that it can never be used. Such a course of action is said to be dominated by others. A dominant strategy is the one that is optimal no matter what the opponent does.

QUEUING THEORY The study of waiting lines is called queuing theory. In general a queue is formed when either units requiring service commonly referred to as customers , wait for the service facility, stand idle & wait for the customer. Some customers wait when the total number of customers requiring service exceeds the number of service facilities. Some service facilities stand idle when the total number of service facilities exceeds the number of customers requiring service.

Input source: The input source is the source from which customer comes & joins the queue. The input source of the customer to the queuing system can be finite or infinite. Arrival characteristics: Size of the arrival population Pattern of arrival at the queuing system Behavior of arrivals. Size of arrival population: Population sizes are considered to be either unlimited i.e infinite or limited i.e finite. It is considered to be infinite if the rate at which source generates the customers is not affected by the number of customers in the service system. Alternatively source is considered finite if the rate is affected by the number of customers in the system. PATTERN Customers arrive at service facility according to some known schedule or else they arrive randomly. In queuing theory the number of arrivals per unit of time can be estimated by probability distribution known as Poisson distribution. The major feature of this distribution is that number of people arriving at a given time is not at all influenced by the number of previous arrivals. Arrival rate is given by symbol lamda BEHAVIOR OF ARRIVAL A customer joining the service , does not get the immediate service , the customer may : 1. stay in the system until served 2. move from one waiting line to another 3. estimate the waiting time & decide whenever to leave.

The first type of customer who stay in the system are called as patient customers. The other two are classified as impatient or reneging customer. QUE LENGTH: The length of a line can be either limited or unlimited. In a sales department where the customers orders are received , there is no restriction on the number of orders that can come in so that a queue of any size can form. When there is o limit on its size the permissible queue is said to be infinite. When there is a limit on size of queue it is said to be finite. SERVICE MECHANISM: Once the customer has entered the system for service , the service system has following characteristic: time taken for service service facility service discipline of the system SERVICE TIME: Service time may be either constant or random. If service time is constant , it takes the same amount of time to service each customer The symbol describing the service rate is and the units are in service per unit time. SERVICE FACILITY: Number of channels : A single channel phase case is where the arrivals pass through only one station in order to complete the required service. E.g. toll booth , theatre ticket window A multiphase channel involves the situations where the units to be served pass through a series of station in a sequence. SINGLE CHANNEL SINGLE PHASE: Que------------- service facility SINGLE CHANNEL MULTIPLE PHASE: Que-------- service facility------------service facility Multiple channel single phase:

Que

Multi channel multi phase:

SERVICE FACILITY: Queue discipline refers to the rule by which customers in the line are to receive service. Most systems use queue discipline known as the first in , first out rule (FIFO). Most queues operate on the principle of first come first served . Other ways of dealing with view can be last in , first out ( LIFO) Random service Alphabetically organized. Application of Queuing system:--------------- Commercial service system Business industrial system Social service system Transportation service system Operating characteristics of queuing system:----------\ Utilization factor for the system Average number of customer in the system Average number of customer in queue Average time each customer spends in the queue Probability that service will be idle. Probability of specific number of customers in the system NOTATIONS:-----------Notation that has been used for summarizing the main characteristics of parallel queue has universal standardized format: (a/b/c ) : (d/e/f) A : arrival distribution B : service time distribution C = number of parallel servers D = service discipline ( FCFS , LIFO , SIRO) E = maximum number of customers allowed in system F = size of calling source