BUSINESS DECISION ANALYSIS

Constructing a Network Diagram

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Are there any pre-requisites for this topic?

NO.

You may have come across terms like critical path but no knowledge is pre-supposed.

Project management is also referred to as:

network analysis

critical path analysis

PERT - program evaluation & review technique

OK, so whats a project?

Well any managerial activity can be represented as a project.

For example:

developing a new product or service marketing a new product or service breaking into a new market building a new plant installing a new computer system planning a training programme re-locating head office.

What do your example projects have in common?

Each can be decomposed into its constituent parts, called ACTIVITIES. We can then define a project as a collection of related activities.

Three things are important: each activity takes time each activity uses up resources activities are structured.

What gives activities structure?

Precedence: some activities have to be completed before others can be started.

But thats too vague. A roof cannot be erected unless the foundations have been dug. Obviously true! So digging foundations must precede erecting the roof! But what about the walls?

So we refer to the immediately preceding activities.

The first step for any project is to:

list the constituent activities arrange them into a Precedence Table.
Activity Description Preceding Activity A,B C C D,E E F,G Time (weeks) 6 8 12 4 6 15 12 8

A B C D E F G H

Survey site Develop initial proposal Obtain approval of governors Choose architect Work out budget Finalise design Agree financing Hire contractor

The project is to build an extension to the Recreation Centre. The table lists the activities and their immediate predecessors up to the point of starting construction.

And heres another project . purchase of a new car.

Activity A B C D E F G H I J K L M N O Description Decide feasibility of purchase Find buyer for existing car Decide on possible models Investigate models decided upon Discuss with knowledgeable friends Get information from dealers Put all information together Narrow down to three options Test drive all three Get warranty & finance information Choose one car Compare dealers & choose one Decide upon colour etc Test drive chosen model Buy new car Preceding Activity A A C C C D,E,F G H H 1,J K L L B,M,N Duration (days) 3 14 1 3 1 2 1 1 3 2 2 2 4 1 3

Is activity B a pre-condition for starting activity I?

Activity A B C D E F G H I J K L M N O Description Decide feasibility of purchase Find buyer for existing car Decide on possible models Investigate models decided upon Discuss with knowledgeable friends Get information from dealers Put all information together Narrow down to three options Test drive all three Get warranty & finance information Choose one car Compare dealers & choose one Decide upon colour etc Test drive chosen model Buy new car Preceding Activity A A C C C D,E,F G H H 1,J K L L B,M,N Duration (days) 3 14 1 3 1 2 1 1 3 2 2 2 4 1 3

NO

Is activity A a pre-condition for starting activity K?

Activity A B C D E F G H I J K L M N O Description Decide feasibility of purchase Find buyer for existing car Decide on possible models Investigate models decided upon Discuss with knowledgeable friends Get information from dealers Put all information together Narrow down to three options Test drive all three Get warranty & finance information Choose one car Compare dealers & choose one Decide upon colour etc Test drive chosen model Buy new car Preceding Activity A A C C C D,E,F G H H 1,J K L L B,M,N Duration (days) 3 14 1 3 1 2 1 1 3 2 2 2 4 1 3

YES

Can activities E and F take place at the same time?

Activity A B C D E F G H I J K L M N O Description Decide feasibility of purchase Find buyer for existing car Decide on possible models Investigate models decided upon Discuss with knowledgeable friends Get information from dealers Put all information together Narrow down to three options Test drive all three Get warranty & finance information Choose one car Compare dealers & choose one Decide upon colour etc Test drive chosen model Buy new car Preceding Activity A A C C C D,E,F G H H 1,J K L L B,M,N Duration (days) 3 14 1 3 1 2 1 1 3 2 2 2 4 1 3

YES

Precedence tables arent that easy to use. Is there some other way of representing a project?

Y E S

A useful visual representation of a project is obtained by drawing a network diagram.

This is how we represent an activity.

event of starting an activity

activity

event of ending an activity

So somewhere in the project Get to University Monday Morning will be:

get out of bed

Err .. but well need to link activities together, wont we. Thats correct. Sometimes we might want to show:
Activity A B C Preceding Activity A B

Err .. but well need to link activities together, wont we. Thats correct. Sometimes we might want to show:
Activity M Preceding Activity K,L

K
M L

Err .. but well need to link activities together, wont we. Thats correct. Sometimes we might want to show:
Activity B C Preceding Activity A A

A
C

Are there any rules to follow when drawing network diagrams?

YES

1. Must be drawn from left to right.

2. Must have a single starting point. 3. Also a single ending point. 4. One arrow (only) per activity. 5. Must correctly reflect the precedence table.

There is one complication that we need to allow for.

Sometimes we have to use Dummy activities.

OK, tell me the worst!!

We use a dashed arrow to record these. A dummy activity may be needed: to prevent 2 or more activities sharing the same starting and ending events. to maintain network logic i.e. to ensure that the network abides by the precedence table.

DETAILS

OK. Lets have a go at drawing a network.

Well draw the one for the extension to the recreation centre.

DETAILS

Well, a network must have a single starting point a circle or node.

Where do I start?

Once the project has started which activities can be begun?

A Survey site
B Develop initial proposal

DETAILS
So we draw arrows for activities A & B running from the starting event.

Make sure that you label the activities as you include them in the network.

What comes next? Preceding Activity A,B

Activity C

RULES
Well is this correct. Does it abide by the rules for drawing network diagrams?

DETAILS

NO

Two or more activities may not share the same starting and ending event.

C
B

Thats no problem. Just do this.

Activity C

Preceding Activity A,B

RULES

DETAILS

Use a dummy activity. Heres one way in which it can be done. It prevents A & B from sharing the same starting and ending event.

So how do I remedy this error?

C

RULES

DETAILS

Activities D & E can start when C is finished.

A

E C D

So well add these to the network.

RULES

DETAILS

The table says that F can start when D & E are completed.
A

E
C D

So can we do this?

RULES

DETAILS

No. Weve broken the rules again.

A

E
C D

So another dummy activity is needed.

RULES

DETAILS

This will work.

A

B
F E C D

RULES
Now we can add activity G.

DETAILS

B F E C D

G can be started once E is completed.

RULES
That leaves activity H.

DETAILS

B F E C D

The start of H requires the completion of F and G.

RULES
So we bring the arrows for F & G into the starting event for activity H.
H A G

DETAILS

B
F E C D

And this is the finished network.

RULES

DETAILS

Always check the network against the precedence table before continuing.
A G

B
F E C D

RULES

DETAILS

Right, now well draw the network for the project of buying a new car.

For this project theres only one starting activity, namely A

RULES
A B

DETAILS

Activities B & C can be started once A is completed.

RULES
A B

DETAILS

C
D E

And D, E & F can be started when C is completed.

RULES
A B

DETAILS

C
D E

Activity G requires completion of D, E & F.

So two dummy activities are needed to prevent D, E & F having the same starting and ending events.

RULES
A B

DETAILS

C
D E

Activity H can now be added to the network.

G H

RULES
A B

DETAILS

C
D E

I&J can now start.

G H

RULES
A B

DETAILS

C
D E

Since the start of K needs completion of I & J we need another dummy activity.

K G H I

RULES
A B

DETAILS

C
D E

Now we add activity L

K G H I

RULES
A B

DETAILS

C
D E M

Activities M & N can now be started.

I H

RULES
A B

DETAILS

C
D E M

That F leaves activity O.

K G H I

It can be started when activities B, M & N are completed.

RULES
A B

DETAILS

C
D E M

That F leaves activity O.

K G H I

A dummy activity will be needed to separate activities M and N.

RULES
A B

DETAILS
O

C
D E M

The F network is now completed.

K G H I

But remember to check it against the precedence table.

What should I now be able to do?

Given the precedence table for a project, you should be able to draw its network diagram.

Thats the end of this lecture. You should now explore the problems, on drawing networks, that are available within Blackboard.