4: Project Production Planning and

Control
Contents
4.1

Introduction

4.2
Project planning
4.2.1 Generally
4.2.2 The planning process
4.3

Critical path method (CPM)

4.4

Project Evaluation Review Technique (PERT)

4.5

Network precedence diagrams

4.6
Project re-planning
4.6.1 Generally
4.7

Crash analysis

4.8

Trade off analysis

4.9

The Bar or Gantt Chart

4.10

Resource Scheduling

4.11

Summary

Heriot-Watt University

Unit 4-1

4.1 Introduction
Learning outcomes from this unit
This unit is intended to introduce you to the main project production planning
approaches used for construction related project management and also to familiarise
you with its main methods for assessing the consequences of crashing a project.
From Unit 4 Project Production Planning and Control you should gain an
understanding of the following:
1. The basic mechanics of project planning, the differences between and
advantages and disadvantages of Critical Path Method (CPM) scheduling and
Program Evaluation and Review Technique (PERT)
2. The basic sequence of works necessary to produce a schedule.
3. Generate and execute crash and trade off scenarios.
Unit 4 will also develop an understanding of and a practical ability to apply learning
in simulated project circumstances related to
4. The use of network precedence diagrams to plan for tasks and parts of projects
and the assessment of the consequences of time and cost changes.
Recommended text for unit 4
The reading from the recommended texts for Unit 4 are:
Winch GM - Managing Construction Projects, An Information Processing Approach
Second Edition. Blackwell Publishing, ISBN 1-4051-8457-1 Ch 11p.284-314
Kerzner, H - A Systems Approach to Planning, Scheduling and Controlling, John
Wiley, ISBN 978-0-470-27870-3, Ch. 11, p. 411 475, Ch.12, p. 493 529,
Ch 16 p.715-739
Burke, R Project Management: Planning and Control Techniques 5th Edn. Burke
Publishing, ISBN 0470851244, Chp. 10, pgs. 142-163.
The readings from the recommended background texts for unit 4 are:
Smith NJ Engineering Project Management, Blackwells Publishing, ISBN 0632
05737- 8, Select relevant sections.
Gray, CF and Larson EW - Project Management: The Managerial Process. 5th Edn.
McGraw Hill, Boston, 2011, Ch6, 7 and 9. Select as appropriate.
Meredith JR and Mantel SJ Project Management: A Managerial Approach. 7th Edn.
J Wiley & Sons, Inc. Ch. 8, p. 333-402.

4.2 Project planning

4.2.1 Generally
Project planning and control are essential project management skills.

Heriot-Watt University

Unit 4-2

Kerzner (p. 412) defines planning as, the function of selecting the enterprise
objectives and establishing the policies, procedures and programs necessary for
achieving them . By establishing a predetermined course of action within a
forecasted environment.
Planning is essential to most enterprises, and is taken for granted in the management
of everything from football teams to construction projects.
Most aspects of an enterprise can be planned, and the planning process can aim at
several different objective criteria. Most projects evaluate success in terms of the
optimisation of time, cost and quality evaluation criteria. As a result, most project
management planning and control tends to centre on these three variables. Other
variables may also be considered, such as safety and reputation, but most of the
immediate and non-statutory success objectives centre around time, cost and quality
optimisation.
Planning as a discipline effectively sets targets. These targets may subsequently be
achieved or not, depending on the success of the project. The project manager
attempts to ensure that these targets are met through project control procedures. These
look at actual performance and track it over a period of time. They then compare
actual performance with theoretical performance in order to isolate variances. These
variances are then used as the basis for management reporting.
Irrespective of whether a project manager is planning for time, cost or quality, the
next stage of the planning process is to work out the sequence in which the works are
to be executed.
4.2.2 The planning process
Irrespective of whether the project manager is developing time, cost or quality plans,
the same basic procedure is adopted up to a point.
The process is essentially as follows:
(a) Evaluate the project through the Statement of Work
The Statement of Work (SOW) is the descriptive document that defined the overall
content and limits of the project. In practice, nearly all projects have a SOW, as they
cannot be efficiently managed or executed unless the managers and administrators can
define the boundaries and limits of the project. The SOW includes all the work that
has to be done in order to complete the project. However, the project cannot be
planned or controlled at this level as it is too big. It is necessary to break the whole
down into individual components that can be individually evaluated and managed.
The next step in the planning process is to break this SOW down into smaller units so
that each can be evaluated separately.

Heriot-Watt University

Unit 4-3

(b) Generate a Work Breakdown Structure (WBS)

A work breakdown structure (WBS) is simply a representation of how large tasks can
be considered in terms of smaller sub-tasks. The idea is to work out the time, cost or
quality objectives of the large task by adding together the sum total of the
corresponding values of each contributing sub-task. You should refer back to section
2 of the module material for examples of how to develop a WBS.
Irrespective of whether the project manager is planning for time, cost or quality, the
next stage of the planning process is to work out the sequence in which the works are
to be executed.
(c) Execute project logic evaluation (PLE)
Project logic evaluation (PLE) is the process of taking the WBS work packages which
have already been identified, and showing the sequence in which they are to be
carried out. This is important for time, cost or quality evaluation.
For time control, the project manager has to know when each WBS activity is
programmed to start and finish. This is a prerequisite for placing orders, committing
to delivery dates etc. It is also needed for resource calculations. PLE is also required
for cost planning calculations. The WBS acts as the basis for the budget plan, but it is
also important to know when expenditure on each activity is going to start and finish.
This is required for any comparison between budgeted and actual rates of expenditure.
PLE is also required for quality control as it defines the activity windows for
individual work packages, which may be subject to testing etc.
PLE simply involves taking the WBS elements and deciding on the most efficient
logical order in which they can be carried out.
NB It should be noted that there is often more than one answer to any planning
problem and the difference in approaches between competing contractors is an issue
that affects contractors tender prices.
For example consider the case of making and drinking a cup of tea. The SOW would
describe the activity in full and the WBS would identify each separate activity. The
WBS would probably identify the individual activities as something like:
1. Put water in kettle.
2. Boil kettle.
3. Put tea in teapot.
4. Put boiling water in teapot and allow to brew.
5. Put milk in cup.
6. Pour tea in cup.
7. Drink.
Some of these WBS elements have to be done before others. For example, activity (2)
must take place after activity (1). However, the logic may not define that activity (3)
has to follow activity (2). In other words you can put the tea in the teapot while the
kettle is boiling.

Heriot-Watt University

Unit 4-4

Activity (2) is therefore said to be dependent upon activity (1) and these activities
have to run consecutively. It can be seen that activity (3) is not dependent upon
activities (1) and (2) and can therefore run concurrently with them. These are
examples of sequential and parallel activity arrangements.
Representing activities as arrows, we can therefore represent the process of making a
cup of tea as follows in Figure 4.1:

Figure 4.1 PLE of the process of making and drinking a cup of tea
A diagram of this type is often known as a precedence diagram, as it shows the
precedence within the project system. This approach can use as the basis of time, cost
and quality planning.
(ii) Time planning (scheduling)
Once the PLE is in place, the next stage in the process is scheduling.
Scheduling is the process of calculating individual activity time in order to allow an
estimate for the completion date to be calculated. The end result of the scheduling
process is the draft master schedule (DMS).
The DMS is a complete programme for the project showing start and finish times
for each activity. By using specific analysis techniques, it is also possible to calculate
start and finish times for groups of activities, sections of the project and for the project
as a whole.
The most obvious uses for a DMS are:
Forecasting resource requirements
Providing basis for bids for resources
Providing dates for placing advance orders/deliveries
Allowing subcontractor planning
Generating progress targets
Allowing progress monitoring
Providing data for resource levelling
Providing data on risk/consequences of delay
Allowing risk control
Generation of What if? scenarios
Identification of errors or impossibilities
Identification of missing information
The basic process involved is to assign durations to each activity in the PLE. By
considering each activity in relation to all the other activities it is possible to identify a
start and finish window for each activity. Most of the activities will have some spare
Heriot-Watt University

Unit 4-5

time in their start and finish window, but some will not. Generally, the items with no
spare or float in their activity windows are critical. Any delay in these activities will
delay the following activities, and some combinations of delays could delay the
overall completion of the project. These items may be on the critical path.
Scheduling therefore involves:
1.
2.
3.
4.
5.
6.
7.

Assigning durations to each activity.

Identifying the start and finish window for each activity.
Identifying those activities with no window (critical path).
Re-planning as necessary.
Rationalising resources.
Forming draft master schedule (DMS).
Refining to form project master schedule (PMS).

In terms of assigning activity durations, there are two primary alternatives. These are
based on (i) the critical path method (CPM) and (ii) the programme evaluation
and review technique (PERT). Both approaches use essentially similar approaches,
but the calculations used and applications of each are quite different.
CPM is used where deterministic calculations can be used. Deterministic values are
applicable where times for activities can be calculated or are known with reasonable
accuracy. For example, the times taken to execute each of the stages of making a cup
of tea.
PERT is used where component activity times cannot be accurately calculated or are
not known, such as making a cup of tea with a faulty kettle that may or may not work
properly.
In both cases, the calculations are used as the basis for evaluating the individual and
overall times applicable to the project. They are not simply used once, to arrive at
overall and individual completion dates. They are also used as the basis for the replanning and change management processes, which are essential features of most
project planning and control.
Re-planning is often necessary, as the draft master schedule produced by the project
manager is just that a draft. It is presented to the client as one possible solution for
the planning and control of the project. It may or may not be acceptable. Typical
reasons why it may not be acceptable would be because it finishes the project too late
and time savings are required, or it is too heavily resourced and has to be reduced in
costs.
The re-planning process is just as important as the initial planning process. As soon as
a schedule has been produced, there will be immediate requirements to change it.
Change notices and variation orders will be issued throughout the project construction
phase.
Client requirements may change or planning regulations may alter etc. Re-planning
tends to be a complex operation, and is one of the main reasons why project planning
software, as opposed to manual methods are used almost exclusively.

Heriot-Watt University

Unit 4-6

4.3 Critical Path Method

The Critical Path Method (CPM) was originally developed in 1960 by DuPont in
order to allow then programming of maintenance work during chemical plant shut
downs.
CPM is a deterministic approach to project planning. It uses estimates of activity
durations that are known (reasonably accurately). CPM is activity oriented, as it is the
durations taken on individual activities that determine the dates through the network.
The basic CPM process is as follows:
(a) Assign durations to each activity
The amount of time to complete each activity is calculated and added to the
precedence diagram. This is usually based on experience, although some
organisations use national or company standards. Output standards are published in
both book and electronic forms.
In some cases, there may be no record or published output standard information from
which to calculate the duration. In these cases, it may be possible to calculate a
deterministic estimate using one of the following techniques.
(i) Modular approach
In this approach, large or complex operations, which cannot be accurately time
estimated, are broken down into smaller and smaller units i.e. (a WBS progression).
In theory, if the unit is small enough, a duration estimate can always be made. The
only determinant is breaking down the process into sufficiently fine detail that
individual activities can be isolated and time values added.
(ii) Benchmark job technique
In this approach, the estimated durations are made on the basis of recorded times for
similar works. Contractors often use this approach when pricing term maintenance
contracts. For example, it may take 3 hours to fix a type 21 transformer so it should
take 4 hours to fix a type 22, assuming it is 33% more complex.
(iii) Parametric technique
This approach would apply where the activity cannot be broken down any further and
where no standards for similar works are available. The process isolates two variables,
the dependent variable and the independent variable. The time taken to dig a trench
depends on the length (assuming all other factors equal). Time is therefore the
dependent variable and length is the independent variable.

Heriot-Watt University

Unit 4-7

(b) Identify the start and finish t for each activity

Two important event times are required:
(i)
The forward pass gives the earliest event time (EET). The forward pass is
simply the total of each individual event times to arrive at a given point. Where there
are two or more event times converging on a point, the latest option is taken (Fig.
4.2).

Figure 4.2 Forward pass

The EET is the earliest date at which a particular activity can start. It is therefore the
longest route through all the activities that precede the activity being considered.
(ii) The backward pass gives the latest event time (LET). The backward pass starts at
the overall project completion time and runs back through each individual activity.
Where there are two or more options, the earliest of the options is taken.
The LET is the latest date at which a particular activity can start in order to avoid
delaying the project as a whole.
(c)

Identify those activities with no float (critical path)

The difference between the EET and LET is the float. The path through the network
which has zero float is the critical path. The critical path is therefore the longest
overall time to complete the project. As a result, any delay on the critical path would
result in an increase in the overall project completion date.
In terms of trade-offs, crashing and any other form of pre-contract or post-contract replanning, it is the critical path items which are considered. It is important to
appreciate that the network may have more than one critical path. Adjustment of the
critical path, resulting in a speeding up of execution, may create other critical paths
elsewhere in the network.

Heriot-Watt University

Unit 4-8

(d)

Re-plan as necessary

The estimated date for completion may be unacceptable, and the client may authorise
an increase in costs in order to allow the project manager to speed up activities.
(e)

Rationalise resources

Resources should be levelled in order to make optimum use of availability. Large

peaks and troughs and concentrations of use of individual resources should be
avoided. Gaps in utilisation should be avoided where possible.
(f)

Form draft master schedule (DMS)

The DMS is the first attempt at scheduling the project. It is usually presented to the
project team in preparation for a subsequent brainstorming session. It is often also
presented to the client for comment. The DMS is not intended to be a final network. It
is a draft for discussion.
It is the first step in the process of producing a project master schedule (PMS).
(g) Refine to form project master schedule (PMS)
The PMS is produced as a refined version of the DMS. It contains firm times and
dates for all activities together with confirmed project logic. The PMS is a project
document and is recognised and used by all members of the project team.
Earliest Start (ES) = Earliest time at which an activity can start for all preceding
activities to be complete. We conventionally set earliest start of the first activity to 0.
Earliest Finish (EF) = Earliest Start + Duration
Where two or more paths lead to the same activity, the longest start time is selected.
This process is repeated until the EF of last activity has been calculated. This
procedure is termed Forward Pass Calculation.
Latest finish (LF) of the last activity needs to be set equal to its earliest finish (EF).
This is so because we do not wish to increase the duration of the activity.
For the last activity, set LF = EF.
Latest Finish (LF) = Last time at which activity can finish without delaying following
activities.
Latest Start (LS) = Latest Finish Duration
ES and LF are calculated in forward and backward passes.
EF and LS are calculated from these.
Float times
Total Float (TF)

Heriot-Watt University

Unit 4-9

Total Float = LF (ES + D)

LF ES represents the total time to complete an activity. Taking the duration from
this leaves total float.
TF therefore represents the leeway that an activity has without affecting the overall
completion of the project.
Independent float (IF)
This is float which cannot be used by any other activity (for example because of limits
on available plant).
IF, therefore, represents independent or unusable float.
There is no point trying to complete the activity early if the next activity cannot start
because of a parallel activity.
Important things to note
Activity Dangles: Where two or more events can start a network, the network should
be started or ended from a unique event by introducing a dummy activity. It is best for
networks not to start or end with activity dangles. This is necessary to make
calculation of forward and backward passes easy.
Hammocks: A sub-network may be represented by a hammock activity. For example,
instead of dividing the construction of basement into several activities, a hammock
may be used.
Forward Pass: After completing the FP calculation, you need to set the EF = LF for
the last activity of event.
Tests: There are two tests needed to confirm that your FP and BP calculations are
fine. The tests are necessary but not sufficient to prove that your calculations are
correct.
Test 1: Closing test The ES and LS of the first activity must be same (0,0 or 1,1)
Test 2: There should be at least one route from the beginning to the end where the
float of all the activities is 0. This is the Critical Path. Every network should have at
least one CP.

4.4 Project evaluation and review technique (PERT)

PERT was originally developed in the early 1960s by departments within the US
Navy, specifically for use on the new fleet of ballistic missile submarines that were
being built at that time.
PERT is a probabilistic approach to project planning It uses estimates of activity
durations that are known (reasonably accurately).
Heriot-Watt University

Unit 4-10

PERT is event oriented, as it works on calculating the probability of events being

completed within a given time.
(a) Assigning durations to each activity
In PERT analysis each activity is assigned three durations. These are the optimistic
duration, the most likely duration and the pessimistic duration. This is necessary
because it is not possible to calculate a deterministic duration for PERT activities.
Examples would include research projects and (to some extent) train timetables.
The optimistic duration is the duration which will apply if everything goes perfectly
well for them. If a traveller is travelling from Town A to Town B, (s)he may have to
make three different connections on the way. Some of these trains may be running
late, which in turn will delay the connecting trains. All the trains may be exactly on
time, but this is unlikely.
(b) Calculate standard deviation for each activity
s = (b-a)/6
It is necessary to consider standard deviation, as the spread of values around the most
likely time may not be symmetrical.
(c) Carry out forward and backward pass to identify CP
Identify the critical path through the network using the average duration times for
each activity.
(d) Calculate project duration
The project duration is the sum of the individual durations on the CP.
(e) Calculate project standard deviation
The variance for a distribution is the square of its standard deviation. The standard
deviation for the distribution of activities represented by the network is the sum of the
individual CP variances.
So the standard deviation for the network is the sum of the variances for each activity
on the critical path.
Project standard deviation = The square root of the sum of the squares of the
individual variances.
Example - Consider project mean and standard deviation in terms of a
normal distribution
Project mean duration
= 30. 50 weeks
Project standard deviation
= 2.13 weeks
Consider target completion time
What is the probability that this project will be finished in 33 weeks?
Standardise project mean and target durations

Heriot-Watt University

Unit 4-11

33.0 weeks 30.5 weeks = 2.50 weeks

The difference between the project mean duration and target duration is converted
from weeks to standard deviations by standardising it.
Divide difference between project mean duration and target duration by project
standard deviation.
2.50 weeks/ 2.13 weeks = 1.17 standard deviations
Summary
Project mean duration
Target project duration
Difference between mean and target
Project standard deviation

= 30.50 weeks
= 33.00 weeks
= 2.50 weeks
= 2.13 weeks

2.50/2.13 = 1.17 standard deviations

Therefore target project duration is 1.17 standard deviations above the mean.
On a normal distribution, 1.17 standard deviation corresponds to 87.9% of the area
under the curve. Therefore the probability of:
1. Finishing within 33 weeks is 88%.
2. Finishing over 33 weeks is 12%.

4.5 Network Precedence Diagrams

A further method of illustrating the PLE involved in a series of tasks or parts or work
packages of projects is to use a graphical method of presentation of projects activities
showing the sequence of work. Network precedence diagrams are developed to do
this and they are also the information panels used by common software packages.
This approach is a further development of the arrow-on-node approach to project
planning.
Network precedence diagrams show the required ACTIVITIES and their LOGICAL
CONSTRAINTS and RELATIONSHIPS.
Activities are tasks, jobs or operations that are needed to complete the work package
or project. Each activity needs a unique coding and description and this can be the
coding established in the WBS in the strategic PMP. This code is shown in a panel in
a box (see example below)
Activities also require resources and have costs that can be scheduled to produce
resource histograms, procurement schedules and cash flow statements.
Individual activities can be shown as relationships that have activities in series or
parallel.

Heriot-Watt University

Unit 4-12

A typical activity box is shown below in Figure 4.3. However, activity boxes can be
drawn in different ways.

Figure 4.3: An Example of Activity Box

The approach to project planning using network precedence diagrams is just as
indicated above and an example is now provided.
Precedence Network Diagram - example
Activity
Duration (weeks)
01
5
02
10
03
12
04
4
05
8
06
10
07
10
08
4
09
5
10
1

Preceding Activity
01
01
02, 03
03
03
04, 05
02
05, 06
08, 07, 09

The precedence diagram can be formed and the information inserted in the relevant
information point as shown by determining the forward pass and then the backward
pass making use of the following
Forward pass

Backward pass

(ES and EF dates)

(LS and LF dates)

EF = ES+duration-1
LS = LF-duration+1

The critical path follows those activities that have no float. These calculations are
shown in Figure 4.4.
This approach is useful for calendar date-based calculation. Most authors do not use
calendar dates in the forward and backward pass calculations. In such cases, the
appropriate calculations are:
Forward Pass
Backward Pass

=
=

Heriot-Watt University

ES + Duration
LF Duration

=
=

Earliest Finish (EF)

Latest Start (LS)

Unit 4-13

The result of the calculation is shown in Figure 4.5. Notice that this uses a different
type of box. The critical path is shown in bold lines/arrows.

Figure 4.4: Network Example (calendar date calculation)

Figure 4.5: Network Example (non calendar dating)


1.
2.
3.
4.

Self assessment questions:

What is the basic process involved in developing a DMS from a SOW
in both CPM and PERT approaches?
How does CPM fundamentally differ from PERT?
Where would CPM and PERT approaches be used?
Develop an activity box and indicate the information required and the
approach needed to determine a critical path for a particular work

Heriot-Watt University

Unit 4-14

package

4.6 Project re- planning

4.6.1. Generally
Project re-planning is an essential project management skill. Once the DMS and PMS
have been established, things immediately begin to change. The design team
introduces new design requirements, the client may change individual preferences,
and the contractor may have to make programme changes and so on. Change is a
significant part of any project, and the planning and control system has to be flexible
enough to allow for and incorporate change accurately.
Project management is about optimising time, cost and quality performance on
projects. These three variables are intrinsically linked. In most cases, it is not possible
to consider any one of them in isolation. If the time required to complete the project is
reduced, the overall cost required to complete is generally increased. If performance is
increased, this usually requires an increase in cost and (perhaps) time. Changes in
requirements of these variables do occur, and the project manager has to be able to replan the project accordingly and provide revised estimates for eventual figures for the
linked variables.
The most common requirement for project managers re-planning calculations is the
function between time and cost. Clients often ask for the project to be speeded up and
need to know how much of an increase in speed is possible and what it will cost. The
analysis and execution of this functionality between time and cost is sometimes
known as crash analysis.

4.7 Crash analysis

In crash analysis, the project manager offers re-planning advice based on the
functional relationship between time and cost. This of course assumes that
performance is fixed, as is the case in most projects which are subject to some kind of
performance standards through a specification.
Crash analysis would be used, for example, where the project manager calculates a
DMS which is not acceptable to the client. The project managers calculations may
indicate that the project will take 43 weeks to complete at a cost of 2.6M. The client
may not be able to accept 43 weeks, as completion may be critical. The client may ask
the project manager to increase the resources on the project and complete in no more
than 38 weeks.
The project manager has to be able to calculate the best combination of resource
increases required to meet this shortened project duration.
The basic process involved is as follows:
1.

Develop a project logic evaluation (PLE).

Heriot-Watt University

Unit 4-15

This involves obtaining the overall SOW which provides full information on the
project. This information is then used to generate the project WBS. The WBS work
packages are then thrown forward using PLE. This produces the overall project
precedence diagram.
Note: In practice, this kind of analysis would be confined to specific parts of the
project. It would be very difficult to analyse the whole project unless it was relatively
small and straightforward.
2.

Add durations.

These would be deterministic durations, generally based on past project records or on

national standards or an estimators judgement.
3.

Establish Project Critical Path.

The forward pass and backward pass would then be performed. In practice, this would
always be done using a suitable computer programme. Programmes generally cannot
assist in PLE calculations and analyses, but they are of obvious use in calculating the
critical path from a network with completed durations. They have limited use in
assigning durations, depending on the CDES software that is available and how well
this can tier in with the project planning software that is being used.
4.

Calculate cost of crashing

The cost of crashing is a function of resources limits and availability. In addition,

resources on an activity can only be increased up to a point. Additional resources may
be immediately available at the same unit costs, available later at the same or
increased unit cost etc.
5.

Calculate cost of crashing per unit time

The cost of crashing for most activities can be calculated relatively easily. For
example, if the crash involves doubling the excavators involved in digging trenches,
the cost of the additional excavator will be more or less the same as the original
excavator. However, crashing one activity may reduce overall project time more than
by crashing another activity. Crash A may cost 10K and save 2 weeks. Crash B may
cost 25K and save 2 weeks. The cost of crashing per week will therefore be 5K per
week for Crash A and 12.5K per week for crash B. It would obviously be preferable
to crash A before B if possible, as the cost increase per unit time is considerably
lower.
6.

Calculate crash sequence

The crash sequence will usually start with the cheapest unit crash cost item and
progress to the most expensive unit crash cost item. This will generally appear as a
negative curve, rising more and more steeply away from the origin (original project
time and cost). The curve should always rise more and more steeply as the unit crash
cost increases for the later items.

Heriot-Watt University

Unit 4-16

The other major consideration is the critical path. There is no point in crashing noncritical items as any time saved on these items will not reduce the overall project or
package completion date. It is therefore essential that the crash sequence contains
only those items that are on the project or package critical path.
7.

Check critical path

As critical path items are crashed the overall length of the critical path will reduce. In
most cases, this means that at some point, the current critical path will no longer be
critical, as it becomes shorter than one or more parallel paths through the network. It
is therefore important that the critical path is checked after each crash to ensure that it
is still critical.
If a parallel path becomes critical before the crash limit has been reached, then the
process has to be repeated so that a new critical path can be identified.
8.

Crash up to crash limit

The crash limit is the point at which no further crashing of activities can take place.
The most common form of limitation is by critical path. All the activities on the
critical path could be crashed and it still remains the critical path. There is no pint in
crashing alternative non-critical activities. In this case, the crash limit is dictated by
the amount of float that is available overall on the critical path.
A typical crash curve would therefore look something like Figure 4.6.

Figure 4.6: A typical crash curve

Worked example

Heriot-Watt University

Unit 4-17

Consider the network in Figure 4.7.

Figure 4.7: A sample network

The activity logic and durations are given in the diagram. The costs of crashing are
given in the Table 4.1.
Table 4.1: Data for crash analysis
Activity
A-B
B-D
A-C
C-E
B-E
D-F
E-F
F-G

Normal
Duration
4
6
4
2
6
2
7
6

Crash
Duration
2
5
3
1
5
1
6
5

Time Saved
2
1
1
1
1
1
1
1

Normal
Cost
1,000
2,000
3,000
3,500
4,000
2,000
3,000
1,000
19,500

Crash Cost
2,000
4,000
7,000
8,500
6,000
3,500
6,000
2,000

Cost of
Crashing
1,000
2,000
4,000
5,000
2,000
1,500
3,000
1,000

Try using this data to generate a crash curve for this project.
The sequence of actions is as follows:
1. Draw project logic
Establish project WBS
Establish strategic development
Produce precedence diagram
2. Add durations
3. Establish project critical path
Execute forward pass and backward pass to calculate float
Critical path is A-B, B-E, E-F, F-G.
4. Calculate cost of crashing
Cost of crashing is a function of resources. Assume resources can be increased
without limitation. The cost of crashing and the cost of crashing per unit time are
calculated in Table 4.2.

Heriot-Watt University

Unit 4-18

Table 4.2: Cost of Crashing and critical path (bold)

Activity
Normal
Crash
Time
Normal
Duration
Duration
Saved
Cost
A-B
4
2
2
1,000
B-D
6
5
1
2,000
A-C
4
3
1
3,000
C-E
2
1
1
3,500
B-E
6
5
1
4,000
D-F
2
1
1
2,000
E-F
7
6
1
3,000
F-G
6
5
1
1,000
19,500

Crash
Cost
2,000
4,000
7,000
8,500
6,000
3,500
6,000
2,000

Cost of
Crashing
1,000
2,000
4,000
5,000
2,000
1,500
3,000
1,000

Crash Cost
per Week
1000
2,000
4,000
5,000
2,000
1,500
3,000
1000

Crash
Cost
2,000
4,000
7,000
8,500
6,000
3,500
6,000
2,000

Cost of
Crashing
1,000
2,000
4,000
5,000
2,000
1,500
3,000
1,000

Crash Cost
per Week
500
2,000
4,000
5,000
2,000
1,500
3,000
1,000

5. Calculate cost of crashing per unit time (Table 4.3)

Table 4.3: Cost of crashing per unit time
Activity
A-B
B-D
A-C
C-E
B-E
D-F
E-F
F-G

Normal
Duration
4
6
4
2
6
2
7
6

Crash
Duration
2
5
3
1
5
1
6
5

Time
Saved
2
1
1
1
1
1
1
1

Normal
Cost
1,000
2,000
3,000
3,500
4,000
2,000
3,000
1,000
19,500

6. Calculate crash sequence

The obvious crash sequence starts at the lowest unit cost of crashing progressing to
the most expensive unit most of crashing. In this example, the cheapest is A-B (500
per week) going up to E-F (3000 per week).
You may crash an activity for one or more units of time at the same time. It is also
possible to crash two or more activities at the same time,
7. Crash A-B
Check the critical path
8. Crash F-G
Check the critical path
9. Crash B-E.
Check the critical path
10. Crash E-F.

Heriot-Watt University

Unit 4-19

Check the critical path

11. The final crash sequence is shown in Table 4.4.
Table 4.4: Final crash sequence
Activity

Normal
Duration

Crash
Duration

A-B
F-G
B-E
E-F

4
6
6
7

2
5
5
6

Normal
Cost
1,000
1,000
4,000
3,000

Crash
Cost

Crash Cost
Week

2,000
2,000
6,000
6,000

500
1,000
2,000
3,000

Project
Duration
23
21
20
19
18

Cost of
Project
19,500
20,500
21,500
23,500
26,500

The crash curve would be as Figure 4.8.

Figure 4.8: Final project crash curve


Question:
What is the objective of project crashing?
What is the basic sequence of activities involved?

4.8 Trade off analysis

Crash analysis is one aspect of trade off analysis. The crash example above
considered the trade-off between time and cost. There can also be trade-offs between
time and performance and cost and performance.
Heriot-Watt University

Unit 4-20

Within overall time, cost and quality constraints, some projects may operate with one
variable fixed, with two fixed, or even with all three fixed. There are therefore several
alternative scenarios as in Table 4.5
Type A-1: Time is fixed
Examples would include emergency repair projects such as re-opening a main line
railway track after collision damage. The only consideration is to get the railway line
open as soon as possible because of compensation claims from train operating
companies. To some extent, cost and performance are irrelevant compared to reopening the line as quickly as possible.
Type A-2: Cost is fixed
Examples would include fixed capital works such as administration budgets. These
have to be spent in full and yet not exceeded. If not spent in full, they may be reduced
for the following year. Government and local authority departments often run on
rigidly fixed project budgets.
Table 4.5: Example - trade-off types
Time

Cost

Performance

Variable
Fixed
Variable

Variable
Variable
Fixed

Fixed
Fixed
Variable

Fixed
Variable
Fixed

Variable
Fixed
Fixed

Fixed
Variable

Fixed
Variable

Fixed
Variable

One fixed
A-1 Fixed
A-2 Variable
A-3 Variable
Two Fixed
B-1
B-2
B-3
Three fixed or variable
C-1
C2

Type A-3: Performance is fixed

Examples would include research projects, or projects where quality is of fundamental
importance. The construction of a reactor containment vessel would be an extreme
example. More everyday examples would include checking parachutes or aircraft
systems. In such cases, the consequences of performance failure are disastrous, and
cost and time become of secondary importance.
Type B-1: Time and cost are fixed
Examples would include professional consultancies. Fees and time input are
negotiated and agreed. The only variable is the level of effort. They may make more
or less of an effort depending on other workloads etc. The only minimum
performance standard is that set by the code of conduct of the appropriate professional
body.

Heriot-Watt University

Unit 4-21

Type B-2: Time and Performance are fixed

Development of a new quality product, such as a luxury car. It must be put into
production as quickly as possible and yet it must be safe and reliable. Development
costs are less important than getting the product on the market. Another example
would be opening a new shopping complex for the Christmas rush. In some areas of
some countries, retail outlets can generate 20% of their income over this period, and it
could be disastrous for the opening to be delayed into January.
Type B-3: Cost and Performance are fixed
Examples would include compliance with statutory requirements such as emission
levels. The levels of performance are stipulated by statute, and these also dictate costs.
The time for implementation could be from one to (say) five years.
Type C-1: Everything is fixed
Simple projects such as one-day bathroom installations, fixed price, fixed time and
specified contracts. No outcome other than total success. There can be no trade-offs.
Type C-2: Nothing is fixed
Disaster relief programmes, emergency repairs after bomb damage, national defence
and security, warfare, military expenditure. No constraints and therefore no trade-offs.
Methodology for trade-off analysis
There is a recognised six-stage methodology for trade-off analysis.
1. Recognising and understanding the basis for project conflicts
2. Reviewing the project objectives
3. Analysing the project environment and status
4. Identifying the alternative courses of action
5. Analysing and selecting the best alternative
6. Revising the project plan
1. Recognising and understanding the basis for project conflicts
A requirement for trade-off occurs because project conflicts arise. This could be
because of changes in project objectives, success and failure criteria,
incompatibilities, errors etc.
The main types of causes for trade-offs are:
Human error and mechanical failure: Including breakdowns, poor change control,
impossibilities in original programming, impossible schedule commitments and
delayed or non-received approvals.

Heriot-Watt University

Unit 4-22

Uncertainty problems: Including change in project team membership, concurrent

projects and sub-contractor control.
Totally unexpected problems: Changes in project environment, changes in company
corporate strategy, new statutes and codes of practice, inaccurate original forecasts
and planning. These problems are generally referred to as force majeure problems in
construction contracts.
The first stage in the trade-off process involves the project manager in identifying the
causes of the conflict and establishing what combination of trade-offs will be
applicable in dealing with the conflict. Different items might be fixed or variables in
different scenarios.
2. Reviewing the project objectives
In addition to the development of project conflict, it is also important for the project
manager to review the original (or current) project success/failure criteria, as these
may have changed since the project was originally launched.
Typical examples could include:
Performance of other projects in the company portfolio
Overall company performance and corporate strategy
Changes in statute (e.g. CDM regulations)
New codes of practice (e.g. BS6079)
Changes in government fiscal policy (E.g. corporation tax/ relief)
Beyond trade-off scenarios
Changes in company policy (e.g. improved health and safety)
Changes in company priorities (e.g. raising the Mary Rose)
Original relative values of time, cost and quality may no longer apply. For example,
the original project objective could have been high prestige and advertising through
high performance. Things may subsequently have gone wrong and the new priority is
to get the job finished and get away as quickly as possible. The trade-off developed
now must match current objectives, not those of the past.
3. Analysing the project status and environment
In order to allow accurate trade-off, it is vital that the status of each work package is
known. Each work package should be assessed for time to complete, cost to complete
and work to complete. Problem areas must be identified and reasons for the problem
determined. Typical reasons include:
Bad planning: Including inaccurate durations or PLE during the planning stage,
inadequate monitoring and control, inadequate communication and management
reporting, inaccurate baseline and poor updating.
Creeping scope: Including inadequate change control, inadequate monitoring of
revised final account total.
Poor team performance: Including high susceptibility of project team to
interdependence, classical multidisciplinary team building problems, short term nature
of the project and the relative complexity of the task on construction projects, high

Heriot-Watt University

Unit 4-23

sub-contract involvement, sentience etc. As a result, a delay by one design team

member can easily delay the whole project.
Environmental: The project has to operate within an environment. Things which
occur in the environment can have a direct effect on the performance of the project.
Examples include factors resulting from dependence on outside resources,
dependence on outside approvals and authorisations, dependence on the weather etc.
4. Identifying the alternative courses of action
Different considerations in terms of time, cost and quality may be available. For
example:
Time: Assuming time has been compromised, what has caused the time compromise?
Can the delay be passed on to the client? Can resources be rescheduled to assist in
making up time? Will there be an associated learning curve benefit?
Cost: Assuming cost has been compromised, what has happened to cause the cost
compromise? Can the company pass it on to the client? If not, can the company
absorb it? How can costs to complete be controlled or reduced?
Performance: Assuming performance has been compromised, what has caused the
performance compromise? Can the original specification still be complied with?
Would the Client accept a reduction in specification? If not, how much will it cost to
achieve the required standard? Will such a change affect company prestige? Will such
a change reduce future chances of winning contracts?
5. Analysing and selecting the best alternative
The best alternative can depend on a wide range of factors. The decision is usually
made (internally) through discussions between the project manager, functional
manager and project sponsor in order to choose the alternative which minimises the
impact on the organisation.
The usual procedure is to:
Prepare a formal project update report: This would include data on current status,
problem diagnosis and prognosis, designation of resources and costs required to
achieve minimum cost overrun, compliance with project objectives minimum
schedule overrun.
Construct decision tree:
Present several alternatives with implications for each: Explore alternative
scenarios with as much justifying information and calculations as possible.
Typical analysis methodologies would include cost benefit analysis, relative
weighting analysis and cause and effect analysis.

Heriot-Watt University

Unit 4-24

Select appropriate strategy and begin implementation

6. Revising the project plan
The project manager would normally analyse the alternative trade-offs and make a
recommendation to senior management. The trade-off would normally necessitate the
generation of new planning tools (WBS, TRM, OBS) and perhaps complete replanning of the exiting schedule.
The revised PMS should then be communicated to all parties concerned so that
everyone is aware of the revised project objectives.
Example trade-off curves
Trade-off curves can be generated for virtually any application. The crash cost curve
generated in the crash analysis section is an example of a trade-off curve. It shows the
relationship between project cost and time with performance fixed.
Other example curves could include:

Figure 4.9: Trade off curve for time-cost

In this example, a reduction in project time gives an increase in cost, as more
resources have to be committed. A typical time cost trade-off curve is a negative
curve, which bottoms out at the lowest cheapest project price and the optimum
resourcing level (Figure 4.10).
Beyond this point, the curve usually starts to rise again, as the project will have some
kind of fixed overheads, such as salaries and insurance. Taking longer and longer over
the project may not result in any further cost savings because of the cumulative effect
of these fixed overheads.

Heriot-Watt University

Unit 4-25

Figure 4.10: Trade-off for performance-cost

The trade-off curve for performance and cost could take a number of different forms.
In some cases, relatively small increases in cost may lead to large immediate increases
in performance. Examples could include sending inefficient staff on a training course.
This may represent only a small investment but it may bring about large increases in
output efficiency. The curve may be characterised by a sudden increase in
performance followed by a gradual levelling out as the effects of the training course
become absorbed in to the system and reach a point where they cause no further
increase in productivity. This will tend to happen as something else begins to limit
output, such as equipment, breakdowns, packaging etc.
There could also be other curves where large investments of money are required in
order to bring about small increases in performance. This type of curve might be
present in high technology development or research programmes. For example,
existing rocket fuels may provide known release of energy rates. It may be possible to
improve efficiency by 1% by increasing development costs by 50%. This kind of
scenario is relatively common in research applications. Obviously, the 1% increase in
efficiency might just be enough to make the product the market leader, or allow it to
break through into a new application area.
Example curves for performance-time are shown in Figure 4.11. Large increases in
time for relatively small increases in performance may be evident in research
programmes where the researcher is trying to edge the performance of the product on
a little. Alternatively, this type of curve could be apparent where perhaps the method
of production is being changed to bring about increased operational efficiency.
Large increases in performance for relatively little increase in time might occur when
objective times or output standards for processes are increased. Allowing a tool
assembler an extra 10% time on an activity could reduce defect rates by 30%. This

Heriot-Watt University

Unit 4-26

type of analysis depends on target output standards in relation to realistic minimum

times.

Figure 4.11: Trade-off curve for performance-time

4.9

Bar Chart

Most project managers know that it is very difficult to communicate with project
staff using network diagrams. A bar chart is a handy solution to the problem.
The Bar or Gantt chart was first introduced by Henry L. Gantt a ship builder. By
now you probable know that few good techniques originated from the
construction industry.
The standard presentation lists activities on the Y-axis and the time for the
activities on the X-axis at the top of the diagram. Activities schedules are then
represented with horizontal bars.
Heriot-Watt University

Unit 4-27

Having undertaken project planning using a network diagram, it is best to finish

by drawing bar charts based on early start or late start schedules. Bar charts are
handy for resources scheduling and earned value analysis (Unit 5).
Students are advised to read the presentation on the bar chart in Chapter 11 of
Rory Burkes book.
Weeks
1

Activities
A

60,000

45,000

45,000

20,000

120,000

Week cost
Cum. Cost

45,000
45,000

75,000
120,000

60,000
180,000

40,000
220,000

40,000
260,000

30,000
290,000

Figure 4.12: Activity Gantt Chart

4.10 Resources Scheduling

What can you do in construction without resources? Nothing! The 4Ms (money,
materials, machines and manpower forgive the gender insensitivity) are
quintessential in our industry. Resource constraints can affect the delivery of
construction projects. Although this is usually part of the contractors work, the
PM needs to understand that resource constraints can impact work on projects.
This needs to be allowed for when negotiating contracts with suppliers.
Since resource scheduling is very important to construction planning, additional
notes will be supplied on VISION soon.
A good presentation of resources scheduling is available in Chapter 8 of Larson
and Grays book.

4.11 Summary
Unit 4 has summarised the main components of project planning and control. It has
summarised the process involved in generating a DMS and PMS from an initial SOW.
It has summarised the steps involved in carrying out PLE on basic project WBS
elements and in using this as the basis for CPM and PERT time based analyses. It has
made clear the basis of applying activity durations and in calculating earliest and
latest event times as the basis for preparing key milestone event charts for projects.

Heriot-Watt University

Unit 4-28

Unit 4 has also summarised the concept of network precedence diagrams, crash and
trade off analysis. It has made clear that crash analysis is an integral part of the replanning process and that it can be used as trade-offs can be generated for different
combinations of time, cost and quality for any project.


Self assessment questions:

1. A particular phase of a project is made up of activities (01-12) as indicated

in the table below,
Activity

Duration (weeks)

Preceding Activity

01
02
03
04
05
06
07
08
09
10
11
12

3
4
3
5
7
7
7
7
8
15
10
4

01
01
01
02
03
03
03
04
05, 06 07, 08
09
10, 11

(1)

(2)
(3)
(4)
(5)

Draw a network precedence diagram that shows early start and finish
dates as well as late start and late finish dates for each activity, and
also indicate the overall duration for this phase of work
Calculate the float time for each activity and indicate the critical path on
the network precedence diagram generated by (a ) above
What is the objective of project crashing?
What is the basic sequence of activities involved in crashing a project?
Draw a Gantt Chart based on Early Start Schedule for all activities.

Heriot-Watt University

Unit 4-29