Pinto pm2 Ism ch10

1
INSTRUCTORS RESOURCE MANUAL
CHAPTER TEN
Project Scheduling: Lagging, Crashing, and Activity Networks
To Accompany
PROJECT MANAGEMENT:
Achieving Competitive Advantage
By
Jeffrey K. Pinto
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall
CHAPTER 10
PROJECT FOCUS A Crushing Issue: How to Destroy Brand New Cars
INTRODUCTION
10.1 LAGS IN PRECEDENCE RELATIONSHIPS
Finish to Start
Finish to Finish
Start to Start
Start to Finish
10.2 GANTT CHARTS
Adding Resources to Gantt Charts
Incorporating Lags in Gantt Charts
PROJECT MANAGERS IN PRACTICE Major Julia Sweet, USAF
10.3 CRASHING PROJECTS
Options for Accelerating Activities
10.4 ACTIVITY ON ARROW NETWORKS
How are the Different?
Dummy Activities
Forward and Backward Passes with AOA Networks
AOA versus AON
10.5 CONTROVERSIES IN THE USE OF NETWORKS
Conclusions
Summary
Key Terms
Solved Problems
Discussion Questions
Problems
Integrated Project: Developing the Project Schedule
Case Study 10.1 Project Scheduling at Blanque Cheque Construction (A)
Case Study 10.2 Project Scheduling at Blanque Cheque Construction (B)
MSProject Exercises
PMP Certification Sample Questions

Bibliography
TRANSPARENCIES
10.1 NETWORK INCOPORATING FINISH TO START LAG OF 4 DAYS
A
6
Spec Design
6
B
11
Design Check
5
Lag 4
15
C
22
Blueprinting
7
10.2 FINISH TO FINISH NETWORK RELATIONSHIP
30
36
Wiring
31
S
33
Plumbing
2
33
T
3
36
HVAC
36
U
42
Interior Const.
6
10.3 START TO START NETWORK RELATIONSHIP
30
36
Wiring
6
3 days
33
T
3
31
36
HVAC
36
U
42
Interior Const.
6
S
33
Plumbing
2
10.4 START TO FINISH NETWORK RELATIONSHIP
20
26
6
3 days
20
Y
3
18
23
23
Z
6
20
29
10.5 BENEFITS OF GANTT CHARTS
1) They are very easy to read and comprehend
2) They identify the project network coupled with its schedule baseline
3) They allow for updating and project control
4) They are useful for identifying resource needs and assigning

resources to tasks
5) They are easy to create
10.6 SAMPLE GANTT CHART
Microsoft product screen shot(s) reprinted with permission from Microsoft Corporation.
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10.7 SAMPLE TRACKING GANTT CHART WITH CRITICAL PATH A-C-D-F-H
11
10.8 GANTT CHART WITH RESOURCES IDENTIFIED FOR EACH TASK
12
10.9 CRASHING PROJECTS UNDER WHAT

CONDITIONS?
1. The initial schedule may be too optimistic.
2. Market needs change and the project is in demand earlier than

anticipated.
3. The project has slipped considerably behind schedule.
4. The contractual situation provides even more incentive to avoid

schedule slippage.
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10.10 TIME-COST TRADEOFFS FOR CRASHING

ACTIVITIES
Crash
Point
Crashed
Cost
Normal
Point
Normal
Crashed
Normal
Activity Duration
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10.11 CRASHING ACTIVITIES AN EXAMPLE
Formula
Slope =
crash cost normal cost

normal time crash time
Example Calculating the Cost of Crashing

SUPPOSE:
NORMAL ACTIVITY DURATION = 8 WEEKS
NORMAL COST = $14,000
CRASHED ACTIVITY DURATION = 5 WEEKS
CRASHED COST = $23,000
THE ACTIVITY COST SLOPE =
23,000 14,000
85
or,
$9,000
$3,000 per week
15
10.12 SAMPLE AOA NETWORK DIAGRAM
3
B
2
C
16
10.13 PARTIAL AOA NETWORK ILLUSTRATING DUMMY ACTIVITIES
3
B
A
1
2
C
4
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DISCUSSION QUESTIONS
1. Please give examples of circumstances in which a project would employ lag

relationships between activities using:
a. Finish to start
b. Finish to finish
c. Start to start
d. Start to finish
a. Finish to start: In home construction, plaster is applied to walls (activity A) before they
are painted (activity B). The plaster has to dry before the walls can be painted. This
creates a lag of one day between the finish of activity A and the start of activity B.
b. Finish to finish: A contractor may want the gas line and plumbing to be completed at
the same time so that appliances can be installed in a kitchen. In this case, he/she may
delay installation of a gas line (activity A) so that it will be completed at the same time as
the plumbing (activity B). This creates a lag prior to the start of activity A so that A and
B will finish on the same day.
c. Start to start: A contractor may elicit RFQs from subcontractors (activity B) while
blueprints are still being fine tuned (activity A). This creates a lag between the start of
activity A and the start of activity B.
d. Start to finish: Workers can begin putting up shower molding (activity A), but the
work cannot be finished until installation of the shower head and faucet begins (activity
B).
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2. The advantage of Gantt charts lies in their linkage to the project schedule baseline.
Explain this concept.
Because they are tied to the project schedule, Gantt charts allow project teams to track a
projects actual progress with the projects planned progression. They create an easy
reference for project teams that alert members to variance from the schedule baseline and
the impact of the variance on the project network. Delays in one activity may create
delays in subsequent activities. Here, Gantt charts can be used to update the baseline.
Their depiction of variances from the baseline makes Gantt charts a useful project control
tool by allowing the PM to identify problems that may jeopardize the teams ability to
meet project milestones.
3. What are the advantages in the use of Gantt charts over PERT diagrams? In what
ways might PERT diagrams be advantageous?
Gantt charts display the project baseline. Each activity can then easily be referenced at
any point during the project to see if progress is on target. Gantt charts are also more
useful because the use of resources can be added to the charts. Finally, Gantt Charts are
visually appealing and easily understandable. PERT diagrams offer a means to convey
complex network relationships more completely and make the identification of
predecessor and successor relationships easy to recognize.
4. Under what circumstances might you wish to crash a project?

Crashing may be desirable if initial time estimates are inaccurate, the project falls behind
schedule or the project completion date is moved up. In these cases, the project cannot be
completed on time given the original schedule. Crashing would expedite the
project/activities to meet new completion dates. Another scenario occurs when late fees
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or penalties may be incurred. It may be more cost effect to crash activities than to pay the
additional fees.
5. In crashing a project, we routinely focus on those activities that lie on the critical path,
not activities with slack time. Explain why this is the case.
The critical path is the longest path through the network. Crashing activities on the
critical path reduces the overall project duration time. Crashing activities outside of the
CP (those with slack time) will increase overall costs, but only reduce the time to
complete that single activity, not the overall time of the project. Therefore, it is more
efficient, when trying to expedite the entire project, to crash activities that lie on the CP.
6. What are some of the advantages in the use of AOA notation as opposed to AON?
Under what circumstances does it seem better to apply AON methodology in network
development?
Advantages of the AOA notation include its prevalence in some specialized business
fields, its clearer depiction of complex projects and event nodes/milestones in AOA are
easier to identify. The AON methodology is more suitable when there are several merge
points within the network. Merges make AOA notation convoluted (requiring the use of
dummy activities) due to tasks being listed on arrows connecting activities in the
diagram. AON is also more applicable when computer scheduling is desired because
AON notation is used in most PM computer software packages.
7. Explain the concept of a dummy variable. Why are they employed in AOA
notation? Why is there no need to use dummy variables in an AON network?
20
Dummy variables are arrows used in AOA notation to establish precedent relationships
between activities. There are no durations or work description assigned to the arrows;
they are simply used to indicate relationships. AOA requires the use of dummy variables
because arrows cannot be used to connect two predecessors to one successor activity.
Meaning if A and B are predecessors to C, there is no way, without dummy variables, to
connect the dual predecessors to C. AON does not use dummy variables because arrows
are used to indicate relationships between activities. If multiple predecessors exist, then
multiple lines will be used to connect A and B (or as many activities as needed) to C.
8. Please identify and discuss some of the problems or dangers in using project networks.
Under what circumstances can they be beneficial and when can they be dangerous?
One problem is that complex project may make networks meaningless. Project may be
stretched out over several years making a traditional network diagram to complex to use.
There is also the danger that information in the network may be incorrect or
oversimplified leading to errors in its use downstream. Networks may also be
misapplied. Companies may try to employ networks where they are unsuitable (i.e.
scheduling problems outside of project management). Caution must be taken when using
networks in a situation where multiple sub-contractors are employed. Sub-contractors
need to be informed of other scheduling (i.e. other sub-contractors) taking place in the
project. Otherwise, independent networks for each sub-contractor will exist and these
networks may conflict with one another. Lastly, optimism in time estimates may create
faulty network construction. Though there are several potential dangers inherent in
project networks, they can be extremely beneficial to project teams. Networks visually
depict what needs to be done, when it needs to be started and completed and how one
activity affects other activities within the project. This visual map can be very helpful in
making sense of complex project plans.
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CASE STUDIES
Case Study 10.1 Project Scheduling at Blanque Cheque Construction (A)
The general nature of the project, developing a strip mall with four stores of roughly
equal size, is intended to challenge students to identify a variety of activities necessary to
accomplish the project. The first step is to create a simple WBS of the various project
activities and deliverables that will be required. Instructors can decide in advance how
much detail they want students to go into for this assignment; for example, they may wish
to leave all elements at the Deliverable level and not get down to specific Work Packages.
Questions:
a.
Develop a project network consisting of at least 20 steps that should be

done to complete the project. As the case suggests, keep the level of detail for
these activities general, rather than specific. Be sure to indicate some degree of
precedence relationship among the activities.
As with the above explanation, the key here is to have students first identify some of the
activities (or Deliverables) for this construction project. The instructor may wish to work
with the students, offering some prompts in the cases where people are unsure what
actually goes into a mall development. After 20 steps are identified, challenge the
students to create a simple activity network with precedence ordering of the steps. This
step in the activity works well as a group exercise where students can bounce their ideas
off each other and challenge basic assumptions about precedence ordering.
b. Suppose you now wanted to calculate duration estimates for these
activities. How would you make use of the following approaches? Are
some more useful than others?
i. Expert opinion
ii. Past history
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iii. Mathematical derivation

In answering this question, students can first be assigned to create a duration estimation
table using Beta distributions. Brain storming will allow them to identify reasonable
worst, most likely, and best case scenarios for each activity duration. Then, they can
answer the question regarding the use of expert optinion, past history, or mathematical
derivation by showing how each could be applied to duration estimation. Instructors can
challenge each of these points, arguing that expert opinion is just that, the experience of
experts, not us. Likewise, they can point out that historical estimates may work or
intervening issues may have come up that make historical parameters unduly pessimistic
or optimistic (e.g., the loss of regional suppliers makes it harder and lengthens the time to
identify and contract for project logistics).
c. Joe was trying to decide which scheduling format to employ for his
planning: AON or AOA. What are some of the issues that Joe should first
consider prior to choosing between these methods?
The chapter identifies a number of issues that serve to help determine whether to use
AON or AOA notation. Specifically:
The benefits of AON are centered primarily in the fact that it has becomes the most
popular format for computer software packages, such as MS Project. Hence, as more and
more companies use software-based project scheduling software, they are increasingly
using the AON method for network diagrams. The other benefits of AON are to place the
activity within a node and use arrows merely as connection devices, thereby simplifying
the network labeling. This convention makes AON networks very easy to read and
comprehend, even for novice project managers. The primary drawback with AON
networks occurs when the project is very complex, with numerous paths through the
model. The sheer number of arrows and node connections when multiple project
activities are merging or bursting can make AON networks difficult to read.
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On the other hand, AOA modelings greatest benefit lies in its accepted use in certain
business fields, such as construction, where AON networks have not yet made significant
inroads. Also, in the cases of large, complex projects it is often easier to employ the path
process used in AOA. Finally, because the activity and node system is used, for projects
that have many significant milestones, such as supplier deliveries, AOA event nodes are
very easy to identify and flag. On the other hand, there is no question that some
conventions in AOA diagramming are awkward; most particularly, the use of dummy
activities. Dummy activities are not a simple concept to master and require more training
on the part of novice project managers to be able to use them easily. Finally, AOA
networks can be information intensive in that both arrows and nodes contain some
important project information. Rather than centralizing all data into a node, as in the
AON convention, AOA networks use both arrow and nodes to label the network.
Case Study 10.2 Project Scheduling at Blanque Cheque Construction (B)

This case identifies a situation in which the project manager is facing a late project with
serious consequences as a result. He is trying to decide whether or not to crash activities
from this point to the end of the project and the focus is intended to make students
understand the benefits and drawbacks of crashing. Because it should not be done
without serious consideration of the escalating costs, crashing a project typically comes
down to a benefits and drawbacks analysis, such as is the case here.
Questions:
1. What are some of the issues that weigh in favor of and against crashing the
project?
Crashing must be considered in light of a number of factors, principally the penalties that
the contractor will be forced to absorb should the project be late. In this case, the
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decision is based on the fact that top management has informed the project manager that
he has some discretionary money to spend but the project cannot be late, suggesting that
crashing makes good sense.
2. Suppose you were the site supervisor for this project. How would you advise Joe
to proceed? Before deciding whether or not to crash the project, what questions
should you consider and how should you evaluate your options?
Among the important questions to ask is the critical one: will crashing thee activities get
us back on track? There is no point in crashing non-critical activities, nor should it be
done if the net effect is only to spend money but not to complete the project within the
necessary time period. Thus, the dollar-day choices have to be clear enough to warrant
the decision to crash remaining activities. In this project case, most students will
recommend crashing the activities as it is a relatively cost-free exercise for the project
manager (i.e., he has discretionary money and has calculated that crashing remaining
activities will bring them close to the project deadline for completion). Instructors can
use this scenario with real data to demonstrate how to prioritize activities for crashing.
25
PROBLEMS
1.
Please develop the network activity chart and identify the

critical path for a project based on the following information. Draw the activity
network as a Gantt chart using MSProject.
MSProject. What is the expected duration of the
project?
Activity
A
B
C
D
E
F
G
H
I
J
Expected Duration
5 days
10 days
8 days
1 day
5 days
10 days
14 days
3 days
12 days
6 days
Predecessors
-A
A
A
B, C
D, E
F
G
F
H, I
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SOLUTION:
Expected duration of the project can be found by adding the lengths of the linked paths. In this case, it is 53 days.
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2.
Consider a project with the following information.

Construct the project activity network using AOA methodology and label each
node and arrow appropriately. Identify all dummy activities required to complete
the network.
Activity
Duration
Predecessors
--
B, C
E, F, G
Activity
Duration
ES
EF
LS
LF
Slack
--
10
10
10
--
10
13
10
13
--
13
12
17
13
17
13
17
--
10
12
15
17
17
22
17
22
--
28
SOLUTION:
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3. You are considering the decision of whether or not to crash your project. After
asking your operations manager to conduct an analysis, you have determined the
pre-crash and post-crash activity durations and costs, shown in the table
below:
Normal
Crashed
Activity
Duration
Cost
Duration
Cost
4 days
$1,000
3 days
$2,000
5 days
$2,500
3 days
$5,000
3 days
$750
2 days
$1,200
7 days
$3,500
5 days
$5,000
2 days
$500
1 day
$2,000
5 days
$2,000
4 days
$3,000
9 days
$4,500
7 days
$6,300
a. Calculate the per day costs for crashing each activity

b. Which are the most attractive candidates for crashing? Why?
c. Calculate project costs by project duration. At what point does it no longer
make cost sense to continue crashing activities? Why? Show your graph.
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SOLUTION:
a. Applying the formula for crashing, the per day costs for crashing each activity is:
Activity
Per Day Cost
$1,000
$1,250
$450
$750
$1,500
$1,000
$900
b. The most attractive candidates for crashing (assuming we know nothing of critical
activities) are those with the lowest per day cost to crash. In this case, we would crash
the activities in order: C, D, G, A and F, B, E.
c. In solving for this question, it is important to remember that all activities are
considered to be on the critical path. Thus, there is no reason to exclude certain activities
from crashing because they are not critical. We can create a table of activities crashed,
total project length, and total costs as follows:
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Activity Crashed
Duration
Total Costs
Normal (none crashed)
35 days
$14,750
34
15,200
32
16,700
30
18,500
29
19,500
28
20,500
26
23,000
E (All crashed)
25
24,500
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4. When deciding on whether or not to crash project activities, a project manager

was faced with the following information. Activities of the critical path are
highlighted with an asterisk:
Normal
Activity
Crashed
Cost
Duration
Extra Cost
Duration
5,000
4 weeks
4,000
3 weeks
B*
10,000
5 weeks
3,000
4 weeks
3,500
2 weeks
3,500
1 week
D*
4,500
6 weeks
4,000
4 weeks
E*
1,500
3 weeks
2,500
2 weeks
7,500
8 weeks
5,000
7 weeks
G*
3,000
7 weeks
2,500
6 weeks
2,500
6 weeks
3,000
5 weeks
a.
Identify the sequencing of the activities to be crashed in the first

four steps. Which of the critical activities should be crashed first?
Why?
b.
What is the projects critical path? After four iterations involving

crashing project activities, what has the critical path shrunk to?
c.
Suppose project overhead costs accrued at a fixed rate of $500 per

week. Chart the decline in direct costs over the project life relative
to the increase in overhead expenses.
d.
Assume that a project penalty clause kicks in after 19 weeks. The

penalty charged is $5,000 per week after 19 weeks. When the
penalty charges are added, what does the total project cost curve
look like? Develop a table listing the costs accruing on a per week
basis.
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e.
If there were no penalty payments accruing to the project, would it

make sense to crash any project activities? Show your work.
34
SOLUTION:
a) The correct sequence for crashing activities is listed as:

1. Activity E or G (they both cost $2,500 more)
2. Activity E or G
3. Activity B
4. Activity D
Following this order assumes that activities are crashed in order of their cost.
b) The projects critical path is B-D-E-G, or 21 weeks. After four

iterations of crashing project activities, the critical path baseline
has shrunk to 16 weeks.
c) The chart showing the decline in costs relative to the increase in
overhead expenses would resemble the following:
Duration
21 weeks
20 weeks
19 weeks
18 weeks
16 weeks
Direct Costs
37,500
40,000
42,500
45,500
49,500
Penalties
10,000
5,000
-0-0-0-
Overhead
10,500
10,000
9,500
9,000
8,000
Total
58,000
55,000
52,000
54,000
56,500
35
60
50
Total costs
40
Cost
(thousands)
30
Direct costs
20
Overhead
10
Penalty
10
12
14
16
18
20
22
Schedule Baseline (Weeks)
d) Also shown on the figure above.

e) If no penalties kicked in, there would not be a cost basis for
crashing the project. It may still be appropriate given other
project information; however, direct costs decline proportionally
to increase in overhead expenses, suggesting no reason to crash
the project from a cost perspective.
36
MSProject EXERCISES
Problem 10.1
Suppose we have a complete activity predecessor table (shown below) and we wish to
create a Network diagram highlighting the activity sequence for this project. Using
MSProject, enter the activities, their durations, and their predecessors for Activities A
through E. Note that all duration times are in days.
Project - Remodeling an Appliance

Activity
Duration
Predecessors
A.
Conduct competitive analysis
B.
Review field sales reports
C.
Conduct tech capabilities assessment
D.
Develop focus group data
A, B, C
E.
Conduct telephone surveys
F.
Identify relevant specification improvements
G.
Interface with Marketing staff
H.
Develop engineering specifications
I.
Check and debug designs
J.
Develop testing protocol
K.
Identify critical performance levels
L.
Assess and modify product components
I, K
M.
Conduct capabilities assessment
12
N.
Identify selection criteria
O.
Develop RFQ
P.
Develop production master schedule
N, O
Q.
Liaison with Sales staff
R.
Prepare product launch
37
Solution:
Entering the five Activities and their predecessors, the partial Gantt chart should look
like the following:
38
Problem 10.2
Now, continue developing your Gantt chart with the rest of the information contained in
the table above and create a complete activity Network diagram for this project.
Solution:
39
Problem 10.3
Identify the critical path for this project. How can you tell? (Hint: Click on the Tracking
Gantt option.)
Solution:
The tracking Gantt chart automatically highlights (in red) the critical activities within the
network. Thus, following the MSProject output below, we can determine that the critical
path for this project is
40
Problem 10.4
Suppose that we wished to incorporate lag relationships into our activity network.
Consider the table shown below and the lag relationships noted. Develop an MSProject
Gantt chart that demonstrates these lags.
Activity
Duration
Predecessor Relationship
A. Wiring
None
B. Plumbing
None
C. HVAC
Wiring (Finish-to-Start),
Plumbing (Finish-to-Finish)
D. Interior construction
HVAC (Start-to-Start)
Solution:

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1

INSTRUCTORS RESOURCE MANUAL

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

PMP Certification Sample Questions

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

10.1 NETWORK INCOPORATING FINISH TO START LAG OF 4 DAYS

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

10.2 FINISH TO FINISH NETWORK RELATIONSHIP

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

10.3 START TO START NETWORK RELATIONSHIP

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

10.4 START TO FINISH NETWORK RELATIONSHIP

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

10.5 BENEFITS OF GANTT CHARTS

1) They are very easy to read and comprehend

3) They allow for updating and project control

4) They are useful for identifying resource needs and assigning

5) They are easy to create

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

10.6 SAMPLE GANTT CHART

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

10.7 SAMPLE TRACKING GANTT CHART WITH CRITICAL PATH A-C-D-F-H

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

10.8 GANTT CHART WITH RESOURCES IDENTIFIED FOR EACH TASK

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

10.9 CRASHING PROJECTS UNDER WHAT

1. The initial schedule may be too optimistic.

2. Market needs change and the project is in demand earlier than

3. The project has slipped considerably behind schedule.

4. The contractual situation provides even more incentive to avoid

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

10.10 TIME-COST TRADEOFFS FOR CRASHING

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

10.11 CRASHING ACTIVITIES AN EXAMPLE

crash cost normal cost

Example Calculating the Cost of Crashing

THE ACTIVITY COST SLOPE =

$3,000 per week

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

10.12 SAMPLE AOA NETWORK DIAGRAM

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

10.13 PARTIAL AOA NETWORK ILLUSTRATING DUMMY ACTIVITIES

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

1. Please give examples of circumstances in which a project would employ lag

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

4. Under what circumstances might you wish to crash a project?

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

Develop a project network consisting of at least 20 steps that should be

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

iii. Mathematical derivation

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

Case Study 10.2 Project Scheduling at Blanque Cheque Construction (B)

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

Please develop the network activity chart and identify the

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

Consider a project with the following information.

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall