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Network Analysis

OR

Project Management - CPM/PERT

What exactly is a project?


PM 1 Im in charge of the construction of a retail development in the centre of a large town. There are 26 retail units and a super market in the complex. My main responsibilities are to co-ordinate the work of the various contractors to ensure that the project is completed to specification, within budget and on time.

PM 2 I am directing a team of research scientists. We are running trials on a new analgesic drug on behalf of a pharmaceutical company. It is my responsibility to design the experiments and make sure that proper scientific and legal procedures are followed, so that our results can be subjected to independent statistical analysis.

PM 1 Im in charge of the construction of a retail development in the centre of a large town. There are 26 retail units and a super market in the complex. My main responsibilities are to co-ordinate the work of the various contractors to ensure that the project is completed to specification, within budget and on time.

PM 2 I am directing a team of research scientists. We are running trials on a new analgesic drug on behalf of a pharmaceutical company. It is my responsibility to design the experiments and make sure that proper scientific and legal procedures are followed, so that our results can be subjected to independent statistical analysis.
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Project
A project is a temporary endeavour involving a connected sequence of activities and a range of resources, which is designed to achieve a specific and unique outcome and which operates within time, cost and quality constraints and which is often used to introduce change.

Characteristic of a project
A unique, one-time operational activity or effort Requires the completion of a large number of interrelated activities Established to achieve specific objective Resources, such as time and/or money, are limited

Examples
constructing houses, factories, shopping malls, athletic stadiums or arenas developing military weapons systems, aircrafts, new ships launching satellite systems constructing oil pipelines developing and implementing new computer systems planning concert, football games, or basketball tournaments introducing new products into market
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Project Scheduling and Control Techniques


Gantt Chart Critical Path Method (CPM) Program Evaluation and Review Technique (PERT)

History of CPM/PERT
Critical Path Method (CPM)
E I Du Pont de Nemours & Co. (1957) for construction of new chemical plant and maintenance shut-down Deterministic task times Activity-on-node network construction Repetitive nature of jobs

Project Evaluation and Review Technique (PERT)


U S Navy (1958) for the POLARIS missile program Multiple task time estimates (probabilistic nature) Activity-on-arrow network construction Non-repetitive jobs (R & D work)
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Network analysis is the general name given to certain specific techniques which can be used for the planning, management and control of projects 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. j i where j > i Nodes : A node is represented by a circle - Indicate EVENT, a point in time where one or more activities start and/or finish. Activity - A task or a certain amount of work required in the project Requires time to complete Represented by an arrow Dummy Activity It indicates only precedence relationships Does not require any time of effort

Project Network

Project Network
Event Signals the beginning or ending of an activity Designates a point in time Represented by a circle (node) Network Shows the sequential relationships among activities using nodes and arrows
Activity-on-node (AON) nodes represent activities, and arrows show precedence relationships

Activity-on-arrow (AOA)
arrows represent activities and nodes are events for points in time

AOA Project Network for House


Lay foundation

3
2 0

Dummy Build house 3 Finish work 1

3
Design house and obtain financing

1
Order and receive materials

4
Select paint

6
1
Select carpet

AON Project Network for House


Lay foundations Build house

2 2 Start 1 3 3 1
Order and receive materials

4 3

Finish work

7 1 5 1
Select paint

Design house and obtain financing

6 1
Select carpet
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Situations in network diagram


A

B
A must finish before either B or C can start C

A
C B A B A both A and B must finish before C can start

C
D

both A and C must finish before either of B or D can start

B
Dummy

A must finish before B can start both A and C must finish before D can start
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Concurrent Activities
Lay foundation

3
Lay foundation
Dummy 2 0

3 2

1
Order material

Order material

(a) Incorrect precedence relationship

(b) Correct precedence relationship

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Network example
Immediate Activity Predecessor Time (Hr.) A -6 B -8 C -5 D B 13 E C 9 F A 15 G A 17 H F 9 I G 6 J D, E 12
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CPM Example:
CPM Network F(15) 3 A (6) G(17) 7 1 I(6) 8 2 C (5) E(9) D(13) 5 J(12) 6 H(9)

B (8)

4
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CPM calculation
Path
A connected sequence of activities leading from the starting event to the ending event

Critical Path
The longest path (time); determines the project duration

Critical Activities
All of the activities that make up the critical path

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Forward Pass
Earliest Start Time (ES) - Earliest time an activity can start ES = maximum EF of immediate predecessors Earliest finish time (EF) - Earliest time an activity can finish It is computed by earliest start time plus activity time EF= ES + t Earliest Occurrence time of event i is denoted by Ei. Therefore, Ej = Ei + t

Backward Pass
Latest Start Time (LS) - Latest time an activity can start without delaying critical path time LS = LF t Latest finish time (LF) - Latest time an activity can be completed without delaying critical path time LF = minimum LS of immediate predecessors Latest Occurrence time of event i is denoted by Lj. Therefore, Li = Lj t.

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CPM analysis
Draw the CPM network Analyze the paths through the network Determine the float for each activity Compute the activitys float float = LS - ES = LF - EF Float is the maximum amount of time that this activity can be delay in its completion before it delays completion of the project. Find the critical path is that the sequence of activities and events where there is no slack i.e.. Zero slack Longest path through a network Find the project duration is minimum project completion time
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CPM Example:
CPM Network F(15) 3 A (6) G(17) 7 1 I(6) 8 2 C (5) E(9) D(13) 5 J(12) 6 H(9)

B (8)

4
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CPM Example:
Forward Pass E3=6 3 A (6) E1=0 1 F(15) G(17) 7 E7=23 I(6) E8=33 8 J(12) 5 E5=21
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E6=21 6 H(9)

B (8)

E2=8 2

D(13)

C (5) E(9)

4 E4=5

CPM Example:
Backward Pass L3=9 E3=6 3 A (6) L1=0 E1=0 1 F(15) G(17) 7 E7=23 L7=27 D(13) I(6) L6=24 E6=21 6 H(9) L8=33 E8=33 8

B (8)

L2=8 E2=8 2

J(12) 5 E5=21 L5=21


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C (5) E(9)

4 L =12 4 E4=5

After Forward and Backward Pass


L3=9 E3=6 3 A (6) L1=0 E1=0 1 L6=24 E6=21 6 H(9) I(6) L8=33 E8=33 8
Total Project Completion time = 33 Hrs

F(15) G(17)

B (8)

L2=8 E2=8 2

7 E7=23 L7=27 D(13)

J(12) 5 E5=21 L5=21

Critical Path 1-2-5-8 or B-D-J

C (5) E(9)

4 L =12 4 E4=5

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CPM Example
ES and EF Times
3 A(6) 0 6 1 F(15) G(17) 7 I(6) 8 2 D(13) 5 E(9) J(12) 6

H(9)

B(8)
0 8 C(5) 0 5

4
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CPM Example
ES and EF Times
3 A(6) 0 6 1 F(15) 6 21 G(17) 6 23 7 I(6) 8 2 D(13) 8 21 E(9) 5 J(12) 6

H(9)

B(8)
0 8 C(5) 0 5

5 14
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CPM Example
ES and EF Times
3 A(6) 0 6 1 F(15) 6 21 G(17) 6 23 7 I(6) 23 29 6

H(9) 21 30

B(8)
0 8 C(5) 0 5 2 D(13) 8 21 E(9) 5 J(12) 21 33

5 14

Projects EF = 33
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CPM Example
LS and LF Times
3 A(6) 0 6 1 G(17) 6 23 7 F(15) 6 21 6 H(9) 21 30 24 33

B(8) 0 8
C(5) 0 5

I(6) 23 29 27 33

D(13) 8 21 5 E(9) 5 14

J(12) 21 33 21 33

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CPM Example
LS and LF Times
F(15) 6 21 18 24 3 G(17) 6 23 7 10 27 D(13) 8 21 8 21 E(9) 5 14 12 21 6 H(9) 21 30 24 33

A(6) 0 6 4 10 B(8) 0 8 2 0 8 C(5) 0 5 7 12

I(6) 23 29 27 33

J(12) 5 21 33 21 33

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CPM Example
Float = LS - ES = LF - EF
F(15) 6 6 21 3 H(9) 9 24 3 3 21 30 A(6) G(17) 24 33 6 23 I(6) 7 4 3 0 6 10 27 3 9 23 29 4 27 33 B(8) 1 8 D(13) 0 8 J(12) 2 0 0 8 0 8 21 0 21 33 8 21 21 33 5 C(5) 7 0 5 7 12

E(9) 7 5 14 12 21

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CPM Example
Critical Path F(15) 3 A (6) G(17) 7 1 I(6) 8 2 D(13) 5 E(9) J(12)
Total Project Completion time = 33 Hrs

6 H(9)

B (8)

Critical Path 1-2-5-8 or B-D-J

C (5)

4
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Draw Network Compute Project Completion time and Find Critical path

Immediate Activity Predecessor Time (days) A -8 B A 12 C A 4 D B 2 E B 8 F D 2 G E, F 3 H C, G 2 I E, F 2 J I, H 2


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PERT
PERT is based on the assumption that an activitys duration follows a probability distribution instead of being a single value Three time estimates are required to compute the parameters of an activitys duration distribution: pessimistic time (tp ) - the time the activity would take if things did not go well most likely time (tm ) - the consensus best estimate of the activitys duration optimistic time (to ) - the time the activity would take if things did go well Mean (expected time): te =

tp + 4 tm + t o
6
2

Variance: Vt

=2

tp - to
6
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PERT analysis
Draw the network. Analyze the paths through the network and find the critical path. The length of the critical path is the mean of the project duration probability distribution which is assumed to be normal The standard deviation of the project duration probability distribution is computed by adding the variances of the critical activities (all of the activities that make up the critical path) and taking the square root of that sum Probability computations can now be made using the normal distribution table.

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Probability computation
Determine probability that project is completed within specified time x- Z=

where = tp = project mean time or mean of the project duration


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

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Normal Distribution of Project Time


Probability

Time
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PERT Example
Immed. Optimistic Most Likely Pessimistic Activity Predec. Time (Hr.) Time (Hr.) Time (Hr.) A -4 6 8 B -1 4.5 5 C A 3 3 3 D A 4 5 6 E A 0.5 1 1.5 F B,C 3 4 5 G B,C 1 1.5 5 H E,F 5 6 7 I E,F 2 5 8 J D,H 2.5 2.75 4.5 34 K G,I 3 5 7

PERT Example
Activity
A B C D E F G H I J K

Expected Time
6 4 3 5 1 4 2 6 5 3 5

Variance
4/9 4/9 0 1/9 1/36 1/9 4/9 1/9 1 1/9 4/9
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PERT Example PERT Network


2 A (6) D (5) 5 J (3) H (6) 1 B (4) F (4) 3 G (2) 6
36

E (1)

C (3)

4 I (5)

7 K (5)

PERT Example
Activity ES
A B C D E F G H I J K 0 0 6 6 6 9 9 13 13 19 18

EF
6 4 9 11 7 13 11 19 18 22 23

LS
0 5 6 15 12 9 16 14 13 20 18

LF
6 9 9 20 13 13 18 20 18 23 23

Slack
0 *critical 5 0* 9 6 0* 7 1 0* 1 0*
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PERT Example
What is the probability that the project will complete in 24 days ?

Vcritical path = VA + VC + VF + VI + VK = 4/9 + 0 + 1/9 + 1 + 4/9 = 2 critical path = 1.414 z = (24 - 23)/(24-23)/1.414 = .71 From the Standard Normal Distribution table: P(z < .71) = .5 + .2612 = .7612
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Probability the project will be completed within 24 hrs


P (z < .71) = .5 + .2612 = .7612 P (T< 24) = .7612

f(x)

.5000

.2612

23 24