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INSTRUCTORS RESOURCE MANUAL

CHAPTER TEN
Project Scheduling: Lagging, Crashing, and Activity Networks

To Accompany PROJECT MANAGEMENT: Achieving Competitive Advantage By Jeffrey K. Pin o

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CHAPTER !"
P'()"C* +(C,S - A Crushing #ssue: &ow to .estroy /rand New Cars #N*'(.,C*#(N ! $! LA0S #N P'"C"."NC" '"LA*#(NS&#PS +inish to Start +inish to +inish Start to Start Start to +inish ! $2 0AN** C&A'*S Adding 'esources to 0antt Charts #ncorporating Lags in 0antt Charts P'()"C* 1ANA0"'S #N P'AC*#C" - 1ajor )ulia Sweet, ,SA+ ! $2 C'AS&#N0 P'()"C*S (ptions 3or Accelerating Activities ! $4 AC*#5#*6 (N A''(7 N"*7('8S &ow are the .i33erent9 .u::y Activities +orward and /ackward Passes with A(A Networks A(A versus A(N ! $; C(N*'(5"'S#"S #N *&" ,S" (+ N"*7('8S Conclusions Su::ary 8ey *er:s Solved Pro%le:s .iscussion <uestions Pro%le:s #ntegrated Project: .eveloping the Project Schedule Case Study ! $! - Project Scheduling at /lan=ue Che=ue Construction >A? Case Study ! $2 - Project Scheduling at /lan=ue Che=ue Construction >/? 1SProject "@ercises

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P1P Certi3ication Sa:ple <uestions /i%liography

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TRANSPARENCIES

!".! NET#ORK INCOPORATIN$ %INISH TO START LA$ O% & 'A(S

A A Spec .esign A

/ !! .esign Check ;

Lag 4

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C 22 /lueprinting B

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!".) %INISH TO %INISH NET#ORK RELATIONSHIP

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!".* START TO START NET#ORK RELATIONSHIP

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2 days

22

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S 22 Plu:%ing 2

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!".& START TO %INISH NET#ORK RELATIONSHIP

7 A

2A

2 days

6 2

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C A

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!".+ BENE%ITS O% $ANTT CHARTS

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!".8 SAMPLE $ANTT CHART

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!".9 SAMPLE TRACKIN$ $ANTT CHART #ITH CRITICAL PATH A:C:':%:H

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!!

!".; $ANTT CHART #ITH RESOURCES I'ENTI%IE' %OR EACH TASK

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!".< CRASHIN$ PROJECTS = UN'ER #HAT CON'ITIONS>

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!".!" TIME:COST TRA'EO%%S %OR CRASHIN$ ACTI?ITIES

Crash Point
Crashed

Co/ Nor:al Point

Nor:al

Crashed

Nor:al

Ac i.i y '4ra ion

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!".!! CRASHIN$ ACTI?ITIES = AN E@AMPLE

%orm45a

S5ope A

cra/- co/ = norma5 co/ norma5 ime = cra/- ime

EBamp5e = Ca5c45a in7 -e Co/ of Cra/-in7 SUPPOSEC NORMAL ACTI?IT( 'URATION A ; #EEKS NORMAL COST A D!&E""" CRASHE' ACTI?IT( 'URATION A + #EEKS CRASHE' COST A D)*E"""

THE ACTI?IT( COST SLOPE A

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!".!) SAMPLE AOA NET#ORK 'IA$RAM

3
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2
C

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!".!* PARTIAL AOA NET#ORK ILLUSTRATIN$ 'UMM( ACTI?ITIES

2 / A ! 2 C

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'ISCUSSION FUESTIONS

!$ Please give e@a:ples o3 circu:stances in which a project would e:ploy lag relationships %etween activities using: a$ +inish to start %$ +inish to 3inish c$ Start to start d$ Start to 3inish

a$ +inish to start: #n ho:e construction, plaster is applied to walls >activity A? %e3ore they are painted >activity /?$ *he plaster has to dry %e3ore the walls can %e painted$ *his creates a lag o3 one day %etween the 3inish o3 activity A and the start o3 activity /$ %$ +inish to 3inish: A contractor :ay want the gas line and plu:%ing to %e co:pleted at the sa:e ti:e so that appliances can %e installed in a kitchen$ #n this case, heGshe :ay delay installation o3 a gas line >activity A? so that it will %e co:pleted at the sa:e ti:e as the plu:%ing >activity /?$ *his creates a lag prior to the start o3 activity A so that A and / will 3inish on the sa:e day$ c$ Start to start: A contractor :ay elicit '+<s 3ro: su%contractors >activity /? while %lueprints are still %eing 3ine tuned >activity A?$ *his creates a lag %etween the start o3 activity A and the start o3 activity /$ d$ Start to 3inish: 7orkers can %egin putting up shower :olding >activity A?, %ut the work cannot %e 3inished until installation o3 the shower head and 3aucet %egins >activity /?$

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2$ *he advantage o3 0antt charts lies in their linkage to the project schedule %aseline$ "@plain this concept$ /ecause they are tied to the project schedule, 0antt charts allow project tea:s to track a projectHs actual progress with the projectHs planned progression$ *hey create an easy re3erence 3or project tea:s that alert :e:%ers to variance 3ro: the schedule %aseline and the i:pact o3 the variance on the project network$ .elays in one activity :ay create delays in su%se=uent activities$ &ere, 0antt charts can %e used to update the %aseline$ *heir depiction o3 variances 3ro: the %aseline :akes 0antt charts a use3ul project control tool %y allowing the P1 to identi3y pro%le:s that :ay jeopardiIe the tea:Hs a%ility to :eet project :ilestones$

2$ 7hat are the advantages in the use o3 0antt charts over P"'* diagra:s9 #n what ways :ight P"'* diagra:s %e advantageous9 0antt charts display the project %aseline$ "ach activity can then easily %e re3erenced at any point during the project to see i3 progress is on target$ 0antt charts are also :ore use3ul %ecause the use o3 resources can %e added to the charts$ +inally, 0antt Charts are visually appealing and easily understanda%le$ P"'* diagra:s o33er a :eans to convey co:ple@ network relationships :ore co:pletely and :ake the identi3ication o3 predecessor and successor relationships easy to recogniIe$

4$ ,nder what circu:stances :ight you wish to crash a project9 Crashing :ay %e desira%le i3 initial ti:e esti:ates are inaccurate, the project 3alls %ehind schedule or the project co:pletion date is :oved up$ #n these cases, the project cannot %e co:pleted on ti:e given the original schedule$ Crashing would e@pedite the projectGactivities to :eet new co:pletion dates$ Another scenario occurs when late 3ees

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or penalties :ay %e incurred$ #t :ay %e :ore cost e33ect to crash activities than to pay the additional 3ees$

;$ #n crashing a project, we routinely 3ocus on those activities that lie on the critical path, not activities with slack ti:e$ "@plain why this is the case$ *he critical path is the longest path through the network$ Crashing activities on the critical path reduces the overall project duration ti:e$ Crashing activities outside o3 the CP >those with slack ti:e? will increase overall costs, %ut only reduce the ti:e to co:plete that single activity, not the overall ti:e o3 the project$ *here3ore, it is :ore e33icient, when trying to e@pedite the entire project, to crash activities that lie on the CP$

A$ 7hat are so:e o3 the advantages in the use o3 A(A notation as opposed to A(N9 ,nder what circu:stances does it see: %etter to apply A(N :ethodology in network develop:ent9 Advantages o3 the A(A notation include its prevalence in so:e specialiIed %usiness 3ields, its clearer depiction o3 co:ple@ projects and event nodesG:ilestones in A(A are easier to identi3y$ *he A(N :ethodology is :ore suita%le when there are several :erge points within the network$ 1erges :ake A(A notation convoluted >re=uiring the use o3 du::y activities? due to tasks %eing listed on arrows connecting activities in the diagra:$ A(N is also :ore applica%le when co:puter scheduling is desired %ecause A(N notation is used in :ost P1 co:puter so3tware packages$

B$ "@plain the concept o3 a Jdu::y varia%le$K 7hy are they e:ployed in A(A notation9 7hy is there no need to use du::y varia%les in an A(N network9

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.u::y varia%les are arrows used in A(A notation to esta%lish precedent relationships %etween activities$ *here are no durations or work description assigned to the arrowsL they are si:ply used to indicate relationships$ A(A re=uires the use o3 du::y varia%les %ecause arrows cannot %e used to connect two predecessors to one successor activity$ 1eaning i3 A and / are predecessors to C, there is no way, without du::y varia%les, to connect the dual predecessors to C$ A(N does not use du::y varia%les %ecause arrows are used to indicate relationships %etween activities$ #3 :ultiple predecessors e@ist, then :ultiple lines will %e used to connect A and / >or as :any activities as needed? to C$

E$ Please identi3y and discuss so:e o3 the pro%le:s or dangers in using project networks$ ,nder what circu:stances can they %e %ene3icial and when can they %e dangerous9 (ne pro%le: is that co:ple@ project :ay :ake networks :eaningless$ Project :ay %e stretched out over several years :aking a traditional network diagra: to co:ple@ to use$ *here is also the danger that in3or:ation in the network :ay %e incorrect or oversi:pli3ied leading to errors in its use downstrea:$ Networks :ay also %e :isapplied$ Co:panies :ay try to e:ploy networks where they are unsuita%le >i$e$ scheduling pro%le:s outside o3 project :anage:ent?$ Caution :ust %e taken when using networks in a situation where :ultiple su%Mcontractors are e:ployed$ Su%Mcontractors need to %e in3or:ed o3 other scheduling >i$e$ other su%Mcontractors? taking place in the project$ (therwise, independent networks 3or each su%Mcontractor will e@ist and these networks :ay con3lict with one another$ Lastly, opti:is: in ti:e esti:ates :ay create 3aulty network construction$ *hough there are several potential dangers inherent in project networks, they can %e e@tre:ely %ene3icial to project tea:s$ Networks visually depict what needs to %e done, when it needs to %e started and co:pleted and how one activity a33ects other activities within the project$ *his visual :ap can %e very help3ul in :aking sense o3 co:ple@ project plans$

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CASE STU'IES
Ca/e S 40y !".! = Pro1ec Sc-e045in7 a B5anG4e C-eG4e Con/ r4c ion HA, *he general nature o3 the project, developing a strip :all with 3our stores o3 roughly e=ual siIe, is intended to challenge students to identi3y a variety o3 activities necessary to acco:plish the project$ *he 3irst step is to create a si:ple 7/S o3 the various project activities and delivera%les that will %e re=uired$ #nstructors can decide in advance how :uch detail they want students to go into 3or this assign:entL 3or e@a:ple, they :ay wish to leave all ele:ents at the .elivera%le level and not get down to speci3ic 7ork Packages$ F4e/ ion/C a$ .evelop a project network consisting o3 at least 2 steps that should %e done to co:plete the project$ As the case suggests, keep the level o3 detail 3or these activities general, rather than speci3ic$ /e sure to indicate so:e degree o3 precedence relationship a:ong the activities$ As with the a%ove e@planation, the key here is to have students 3irst identi3y so:e o3 the activities >or .elivera%les? 3or this construction project$ *he instructor :ay wish to work with the students, o33ering so:e pro:pts in the cases where people are unsure what actually goes into a :all develop:ent$ A3ter 2 steps are identi3ied, challenge the students to create a si:ple activity network with precedence ordering o3 the steps$ *his step in the activity works well as a group e@ercise where students can %ounce their ideas o33 each other and challenge %asic assu:ptions a%out precedence ordering$ %$ Suppose you now wanted to calculate duration esti:ates 3or these activities$ &ow would you :ake use o3 the 3ollowing approaches9 Are so:e :ore use3ul than others9 i$ "@pert opinion

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ii$ Past history iii$ 1athe:atical derivation #n answering this =uestion, students can 3irst %e assigned to create a duration esti:ation ta%le using /eta distri%utions$ /rain stor:ing will allow the: to identi3y reasona%le worst, :ost likely, and %est case scenarios 3or each activity duration$ *hen, they can answer the =uestion regarding the use o3 e@pert optinion, past history, or :athe:atical derivation %y showing how each could %e applied to duration esti:ation$ #nstructors can challenge each o3 these points, arguing that e@pert opinion is just that, the e@perience o3 e@perts, not us$ Likewise, they can point out that historical esti:ates :ay work or intervening issues :ay have co:e up that :ake historical para:eters unduly pessi:istic or opti:istic >e$g$, the loss o3 regional suppliers :akes it harder and lengthens the ti:e to identi3y and contract 3or project logistics?$ c$ )oe was trying to decide which scheduling 3or:at to e:ploy 3or his planning: A(N or A(A$ 7hat are so:e o3 the issues that )oe should 3irst consider prior to choosing %etween these :ethods9 *he chapter identi3ies a nu:%er o3 issues that serve to help deter:ine whether to use A(N or A(A notation$ Speci3ically: *he %ene3its o3 A(N are centered pri:arily in the 3act that it has %eco:es the :ost popular 3or:at 3or co:puter so3tware packages, such as 1S Project$ &ence, as :ore and :ore co:panies use so3twareM%ased project scheduling so3tware, they are increasingly using the A(N :ethod 3or network diagra:s$ *he other %ene3its o3 A(N are to place the activity within a node and use arrows :erely as connection devices, there%y si:pli3ying the network la%eling$ *his convention :akes A(N networks very easy to read and co:prehend, even 3or novice project :anagers$ *he pri:ary draw%ack with A(N networks occurs when the project is very co:ple@, with nu:erous paths through the :odel$ *he sheer nu:%er o3 arrows and node connections when :ultiple project activities are :erging or %ursting can :ake A(N networks di33icult to read$

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(n the other hand, A(A :odelingHs greatest %ene3it lies in its accepted use in certain %usiness 3ields, such as construction, where A(N networks have not yet :ade signi3icant inroads$ Also, in the cases o3 large, co:ple@ projects it is o3ten easier to e:ploy the path process used in A(A$ +inally, %ecause the activity and node syste: is used, 3or projects that have :any signi3icant :ilestones, such as supplier deliveries, A(A event nodes are very easy to identi3y and 3lag$ (n the other hand, there is no =uestion that so:e conventions in A(A diagra::ing are awkwardL :ost particularly, the use o3 du::y activities$ .u::y activities are not a si:ple concept to :aster and re=uire :ore training on the part o3 novice project :anagers to %e a%le to use the: easily$ +inally, A(A networks can %e Jin3or:ation intensiveK in that %oth arrows and nodes contain so:e i:portant project in3or:ation$ 'ather than centraliIing all data into a node, as in the A(N convention, A(A networks use %oth arrow and nodes to la%el the network$

Ca/e S 40y !".) = Pro1ec Sc-e045in7 a B5anG4e C-eG4e Con/ r4c ion HB, *his case identi3ies a situation in which the project :anager is 3acing a late project with serious conse=uences as a result$ &e is trying to decide whether or not to crash activities 3ro: this point to the end o3 the project and the 3ocus is intended to :ake students understand the %ene3its and draw%acks o3 crashing$ /ecause it should not %e done without serious consideration o3 the escalating costs, crashing a project typically co:es down to a %ene3its and draw%acks analysis, such as is the case here$ F4e/ ion/C !$ 7hat are so:e o3 the issues that weigh in 3avor o3 and against crashing the project9 Crashing :ust %e considered in light o3 a nu:%er o3 3actors, principally the penalties that the contractor will %e 3orced to a%sor% should the project %e late$ #n this case, the

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decision is %ased on the 3act that top :anage:ent has in3or:ed the project :anager that he has so:e discretionary :oney to spend %ut the project cannot %e late, suggesting that crashing :akes good sense$

2$ Suppose you were the site supervisor 3or this project$ &ow would you advise )oe to proceed9 /e3ore deciding whether or not to crash the project, what =uestions should you consider and how should you evaluate your options9 A:ong the i:portant =uestions to ask is the critical one: will crashing thee activities get us %ack on track9 *here is no point in crashing nonMcritical activities, nor should it %e done i3 the net e33ect is only to spend :oney %ut not to co:plete the project within the necessary ti:e period$ *hus, the JdollarMdayK choices have to %e clear enough to warrant the decision to crash re:aining activities$ #n this project case, :ost students will reco::end crashing the activities as it is a relatively costM3ree e@ercise 3or the project :anager >i$e$, he has discretionary :oney and has calculated that crashing re:aining activities will %ring the: close to the project deadline 3or co:pletion?$ #nstructors can use this scenario with real data to de:onstrate how to prioritiIe activities 3or crashing$

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PROBLEMS
!$ Please develop the network activity chart and identi3y the critical path 3or a project %ased on the 3ollowing in3or:ation$ .raw the activity network as a 0antt chart using 1SProject$ 1SProject$ 7hat is the e@pected duration o3 the project9

Activity A / C . " + 0 & # )

"@pected .uration ; days ! days E days ! day ; days ! days !4 days 2 days !2 days A days

Predecessors MM A A A /, C ., " + 0 + &, #

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SOLUTIONC

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"@pected duration o3 the project can %e 3ound %y adding the lengths o3 the linked paths$ #n this case, it is ;2 days$

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2$

Consider a project with the 3ollowing in3or:ation$ Construct the project activity network using A(A :ethodology and la%el each node and arrow appropriately$ #denti3y all du::y activities re=uired to co:plete the network$

Activity A / C . " + 0 &

.uration 2 ; B 2 ; 4 2 ;

Predecessors MM A A /, C / . C ", +, 0

Activity A / C . " + 0 &

.uration 2 ; B 2 ; 4 2 ;

"S 2 2 ! E !2 ! !B

"+ 2 E ! !2 !2 !B !2 22

LS ; 2 ! !2 !2 !; !B

L+ 2 ! ! !2 !B !B !B 22

Slack MM 2 MM MM 4 MM ; MM

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SOLUTIONC

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2$ 6ou are considering the decision o3 whether or not to crash your project$ A3ter asking your operations :anager to conduct an analysis, you have deter:ined the JpreMcrashK and JpostMcrashK activity durations and costs, shown in the ta%le %elow:

Norma5
Activity A / C . " + 0 .uration 4 days ; days 2 days B days 2 days ; days D days Cost N!, N2,; NB; N2,; N; N2, N4,;

Cra/-e0
.uration 2 days 2 days 2 days ; days ! day 4 days B days Cost N2, N;, N!,2 N;, N2, N2, NA,2

a$ Calculate the per day costs 3or crashing each activity %$ 7hich are the :ost attractive candidates 3or crashing9 7hy9 c$ Calculate project costs %y project duration$ At what point does it no longer :ake Jcost senseK to continue crashing activities9 7hy9 Show your graph$

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SOLUTIONC a$ Applying the 3or:ula 3or crashing, the per day costs 3or crashing each activity is: Activity A / C . " + 0 Per .ay Cost N!, N!,2; N4; NB; N!,; N!, ND

%$ *he :ost attractive candidates 3or crashing >assu:ing we know nothing o3 critical activities? are those with the lowest per day cost to crash$ #n this case, we would crash the activities in order: C, ., 0, A and +, /, "$

c$ #n solving 3or this =uestion, it is i:portant to re:e:%er that all activities are considered to %e on the critical path$ *hus, there is no reason to e@clude certain activities 3ro: crashing %ecause they are not critical$ 7e can create a ta%le o3 activities crashed, total project length, and total costs as 3ollows:

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Ac i.i y Cra/-e0 Nor:al >none crashed? C . 0 A + / " >All crashed?

'4ra ion 2; days 24 22 2 2D 2E 2A 2;

To a5 Co/ / N!4,B; !;,2 !A,B !E,; !D,; 2 ,; 22, 24,;

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4$ 7hen deciding on whether or not to crash project activities, a project :anager was 3aced with the 3ollowing in3or:ation$ Activities o3 the critical path are highlighted with an asterisk:

Nor:al Activity A /O C .O "O + 0O & Cost ;, ! , 2,; 4,; !,; B,; 2, 2,; .uration 4 weeks ; weeks 2 weeks A weeks 2 weeks E weeks B weeks A weeks 4, 2,

Crashed "@tra Cost .uration 2 weeks 4 weeks ! week 4 weeks 2 weeks B weeks A weeks ; weeks

2,; 4, 2,; ;, 2,; 2,

a$

#denti3y the se=uencing o3 the activities to %e crashed in the 3irst 3our steps$ 7hich o3 the critical activities should %e crashed 3irst9 7hy9

%$ c$

7hat is the projectHs critical path9 A3ter 3our iterations involving crashing project activities, what has the critical path shrunk to9 Suppose project overhead costs accrued at a 3i@ed rate o3 N; to the increase in overhead e@penses$ per week$ Chart the decline in direct costs over the project li3e relative

d$

Assu:e that a project penalty clause kicks in a3ter !D weeks$ *he penalty charged is N;, per week a3ter !D weeks$ 7hen the penalty charges are added, what does the total project cost curve look like9 .evelop a ta%le listing the costs accruing on a per week %asis$

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e$

#3 there were no penalty pay:ents accruing to the project, would it :ake sense to crash any project activities9 Show your work$

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SOLUTIONC

a? *he correct se=uence 3or crashing activities is listed as: !$ Activity " or 0 >they %oth cost N2,; 2$ Activity " or 0 2$ Activity / 4$ Activity . +ollowing this order assu:es that activities are crashed in order o3 their cost$ :ore?

%? *he projectHs critical path is /M.M"M0, or 2! weeks$ A3ter 3our iterations o3 crashing project activities, the critical path %aseline has shrunk to !A weeks$ c? *he chart showing the decline in costs relative to the increase in overhead e@penses would rese:%le the 3ollowing:

.uration 2! weeks 2 weeks !D weeks !E weeks !A weeks

.irect Costs 2B,; 4 , 42,; 4;,; 4D,;

Penalties ! , ;, M M M M M M

(verhead ! ,; ! , D,; D, E,

*otal ;E, ;;, ;2, ;4, ;A,;

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A ; 4 Cost >thousands? 2 2 (verhead ! ! !2 !4 !A !E 2 22 Penalty *otal costs .irect costs

Schedule /aseline >7eeks?

d? Also shown on the 3igure a%ove$ e? #3 no penalties kicked in, there would not %e a cost %asis 3or crashing the project$ #t :ay still %e appropriate given other project in3or:ationL however, direct costs decline proportionally to increase in overhead e@penses, suggesting no reason to crash the project 3ro: a cost perspective$

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MSPro1ec E@ERCISES
Pro65em !".! Suppose we have a co:plete activity predecessor ta%le >shown %elow? and we wish to create a Network diagra: highlighting the activity se=uence 3or this project$ ,sing 1SProject, enter the activities, their durations, and their predecessors 3or Activities A through "$ Note that all duration ti:es are in days$

Pro1ec : Remo0e5in7 an App5iance

Activity A$ /$ C$ .$ "$ +$ 0$ &$ #$ )$ 8$ L$ 1$ N$ ($ P$ <$ '$ Conduct co:petitive analysis 'eview 3ield sales reports Conduct tech capa%ilities assess:ent .evelop 3ocus group data Conduct telephone surveys #denti3y relevant speci3ication i:prove:ents #nter3ace with 1arketing sta33 .evelop engineering speci3ications Check and de%ug designs .evelop testing protocol #denti3y critical per3or:ance levels Assess and :odi3y product co:ponents Conduct capa%ilities assess:ent #denti3y selection criteria .evelop '+< .evelop production :aster schedule Liaison with Sales sta33 Prepare product launch .uration 2 2 ; 2 2 2 ! ; 4 2 2 A !2 2 4 ; ! 2 Predecessors M M M A, /, C . " + 0 & 0 ) #, 8 L 1 1 N, ( P <

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So54 ionC "ntering the 3ive Activities and their predecessors, the partial 0antt chart should look like the 3ollowing:

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2E

Pro65em !".)

Now, continue developing your 0antt chart with the rest o3 the in3or:ation contained in the ta%le a%ove and create a co:plete activity Network diagra: 3or this project$ So54 ionC

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2D

Pro65em !".* #denti3y the critical path 3or this project$ &ow can you tell9 >&int: Click on the J*racking 0anttK option$? So54 ionC *he tracking 0antt chart auto:atically highlights >in red? the critical activities within the network$ *hus, 3ollowing the 1SProject output %elow, we can deter:ine that the critical path 3or this project is

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Pro65em !".& Suppose that we wished to incorporate lag relationships into our activity network$ Consider the ta%le shown %elow and the lag relationships noted$ .evelop an 1SProject 0antt chart that de:onstrates these lags$ Activity A$ 7iring /$ Plu:%ing C$ &5AC .$ #nterior construction .uration A 2 2 A Predecessor 'elationship None None 7iring >+inishMtoMStart?, Plu:%ing >+inishMtoM+inish? &5AC >StartMtoMStart?

So54 ionC

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