1

PROJECT MANAGEMENT
Project Management is the act of organizing, planning, scheduling, controlling and
directing a scheme or programme of activities with the purpose of ensuring that all
activities related to the scheme are completed on schedule. The word project can
be defined as a set of activities or progammes which is being undertaken in order
to achieve some predetermine goals. It could be a small set of activities divided
into tasks which take time and resources to get finished. The execution of projects
requires that we know in advance the likely amount of time and resources it will
consume. There are different techniques of managing projects. One of the most
common methods is the PERT; also there is CPM.
Both techniques are aspects of Network Analysis. There are also other techniques
such as Resource Scheduling; PERT/COST, e.t.c
The last two mentioned deal with how to minimize cost, time, space, personnel,
machinery, money and other resources.
Another important technique is called Crashing. In Crashing, especially in PERT
the project analyst is interested in working under pressure to meet the targets. It
should be noted that the PERT analysis is designed to compute the probability of
having completion time of a project being behind schedule.
The project Manager therefore tries to trade off/or strike a balance between cost
saving and meeting set targets by time reduction below a given schedule. The
analyst must ensure that the benefit of crashing far outweighs the attendant cost.
It is important that the organization should have a sound knowledge of techniques
of managing projects and that is what these are designed to achieve.
PERT is an acronym for Project Evaluation and Review Technique while CPM
denotes Critical Path Method. In CPM, project management is deterministically
analyzed. The sister concept, PERT is moored on stochasticity. The latter
statement finds relevance in Murphys Law as follows:
1. It is not as easy as it looks
2. It will cost more than you estimated
2

3. It will take more time than you think
4. If anything will go wrong, it will.
The laws apply to every situation. Much earlier CPM was considered to be
restricted or to be concerned with only cost and time trade-off. Based on the
premise, the technique was grossly involved in float computations, resource
leveling and other collateral issues. By resources we mean the 5Ms - Men,
Material, Money, Method, Machines.
On the other hand the PERT technique is concerned with probabilistic
determination of activity times particularly the earliest start time of a project.
Therefore the decision problem of the project manager would be as follows:
1. To consider carefully the length of time the project will take.
2. The determination of the Earliest Start Time (EST), Latest Start Time
(LST), Earliest Finished Time (EFT), Latest Finished Time (LFT) of
each activity of the scheme of work.
3. To determine the most critical task to be done if the project is to be
completed on schedule.
Drawing from the experience of Murphys Law, the project manager may wish to
have 3 distinct estimates of time for each activity namely:
1. Optimistic time (a)
2. Pessimistic time (b)
3. The most likely time (m)

Today, the dividing line between PERT and CPM has vanished and both of them
are now done concurrently and that is the reason why in some texts it is written as
PERT/CPM. In other words, the two techniques have fused together. One
remarkable comment about PERT is that it is built on the philosophy that the
earliest start time of a project is normally distributed. In point of fact, it is not
exactly a normal distributed function. Rather it is exactly a beta () distribution.
3

But for the purpose of mathematical tractability, analysts often take the beta
distribution as a normal distribution.

CPM
We shall define some basic methods of network analysis. These include:
1. Events: It is a particular undertaking at a point in time. It is represented by
circle.
2. Activity: This denotes an aspect or a component of a job. It is represented by
an arrow.
3. Dummy activity: It is represented by a dotted arrow. It is one that does not
involve cost and time expenditure.

To make the concept clearer, we shall take a hypothetical building project. We will
start by enumerating the activities associated with building a house; determine their
various durations as well as EST, EFT, LST, and LFT. We shall also examine the
predecessors in order to ascertain the precedence diagram.
Table 1: Precedence Data for Building a House
Activity Preceded By
A Building Plan
B Procure Sand and Gravel
C Clear Site
D Process C of O A
E Lay Foundation C
F Erect Building Walls D, B, E
G Make Frames D, B, E
H Fix Frame G
I Roofing F, H
J Plastering I
K Electrical/Plumbing J
L Ceiling J
4

M Inspection K
N Painting M, L
O Commissioning N

Usually a precedence of the events has to be specified so that a Network diagram
can be constructed as follows:

Figure 1: Network diagram for building construction
Fig (1) depicts the network diagram for the data given in table 1. It is a chain of
events and activities linked together.
Notations
5


Figure 2: Events Window
Each event is annotated on a window to explain the EST, LST, EFT, LFT in
window 1 and 2 respectively. The arc or branch specifies the activity duration and
has been accordingly annotated in the network. The first step is to inspect the
precedence diagram and sketch the network. Then we start with the forward pass,
beginning with event 0. Then we go from event to event according to the sequence
of numbering and in the process we start inserting the EST for the first window of
each event. This process is called the forward pass. When we get to event 11, we
will reverse and start filling the LST for the second window of each event. Please
observe that the EST of a head event is equal to the EFT of a tail event; and LFT of
a tail event is equal to LST of a head event. These statements are evident from
figure 2. Observe also that inspection is a dummy activity because it does not
consume resources so to say.
Computation of Network Time Under CPM
At this stage we shall take it that the activity times are known. Accordingly, we
reproduce a modified version of Table 1 which is needful for subsequent
computations.
Table 2: Precedence data incorporating activity times
Activity Preceded By Time (Week)
A Building Plan 3
B Procure Sand and Gravel 1
C Clear Site 1
D Process C of O A 1
E Lay Foundation C 1
6

F Erect Building Walls D, B, E 4
G Make Frames D, B, E 3
H Fix Frame G 1.5
I Roofing F, H 1
J Plastering I 2
K Elect/Plumbing J 2.5
L Ceiling J 2
M Inspection K
N Painting M, L 2
O Commissioning N 1


1
0
0 0
3 3
2
1 1
3
4 4
4
7 7
5
8.5 8.5
6
9.5 9.5
7
11.5
8
14
14
14
11
16
17 17
Commissioning
1 week
(O)
Erect buildg wall
4 wks
Roofing
1 wk
Plastering
2 wks
Make
frames
3 wks
Fix frames
1.5 wks
Building
plan
3 wks
Process C of O
1 wk
Sand/ gravel 1 wk
Clear land
1 wk
Foundation
1 wk
Elect/plumbing
2.5 wks
Ce
2 w
P
2

Figure 3: Network Diagram
7

As can be seen in the Figure, the activity duration is stated on each arc or branch of
the network. The circles, as explained in figure 2, indicate the events.
The first step after sketching the network diagram is the use of the forward pass to
compute the network EST and then fix them in the first side window of event
circles. When this has been completed, a backward pass is used to compute the
network LST and we use it to fill the second side window of the event circles.
Notice that in the case of forward pass for event 0, the EST is zero. For event 2,
under forward pass EST is 3 weeks, i.e. the activity duration. For event 3, using the
forward pass, there are three possibilities:
i. The sum of network activities of building plan and processing of C of O (3 +
1 = 4) could be entered in the first side window of event 3.
ii. Also for the activity C we could enter 1 in the first side window of event 3.
iii. The sum of activity of clear site and lay foundation (1+1 = 2) could be
entered in the first side window of event 3.
The sum of activity of building plan and processing of C of O, i.e 4, is the highest
and accordingly entered into the first side window of event 3. The computations of
the rest EST follow the same procedure.
In the case of backward pass, we normally start at the last event (11) and walk
backward. For instance, the LST of commissioning event is 17 1 = 16
To obtain the LFT for ceiling, we subtract the 2 weeks for painting from 16 and we
have 14. However, for the LFT of plastering, there are two possibilities but we
shall take the right decision by passing through the critical path. In order to
determine the path, (0 + 2.5) which represents the sum of activity times for
inspection and electrical/plumbing, 14 2.5 = 11.5. However, passing through the
path of ceiling activity gives (14 2 = 12). The path with higher value is selected
and the outcome registered in the right side window of event 7.
From what we have done so far on backward pass, it is evident that the optimal
step is to do the subtraction along the critical path. The rest computations are
similarly obtained and the comprehensive network diagram is drawn as depicted in
figure 3 above.
8



Float Calculation for CPM
Having established the network for the building project, we need to compute the
float under critical path method. And to do that, we need the following formulae:
Slacks, S = LST EST
Total Float TF = LFT EST D
Free Float FF = EFT EST D
Independent Float IF = EFT LST D
Where:-
D = Activities Duration
EST = Earliest Start Time
LST = Latest Start Time
EFT = Earliest Finish Time
LST = Latest Start Time
TF = Total Float
FF = Free Float
IF = Independent Float
Table 3:
Activities EST LST EFT LFT AD
(D)
SLACK
(S)
TF FF IF
A 0 0 3 3 3 0 0 0 0
B 0 0 4 4 1 0 3 3 3
C 0 0 1 3 1 0 2 0 0
D 3 3 4 4 1 0 0 0 0
9

E 1 3 4 4 1 2 2 2 0
F 4 4 8.5 8.5 4 0 0.5 0.5 0.5
G 4 4 7 7 3 0 0 0 0
H 7 7 8.5 8.5 1.5 0 0 0 0
I 8.5 8.5 9.5 9.5 1 0 0 0 0
J 9.5 9.5 11.5 11.5 2 0 -4 0 0
K 11.5 11.5 14 14 2.5 0 0 0 0
L 11.5 11.5 14 14 2 0 0.5 0.5 0
M 14 14 14 14 0 0 0 0 0
N 14 14 16 16 2 0 0 0 0
O 16 16 17 17 1 0 0 0 0

The CPM has been used to compute all the floats/slack in the Network. It may be
instructive to ascertain the practical relevance of the floats/slack calculated. In this
regard they represent a kind of buffer for adjustment for delays incurred in some
tardy task or activities. Thus they enable the project Manager to make up for loss
times so that the network critical path is not delayed.
Programme Evaluation Review Technique (PERT)
The CPM approach deals with deterministic way of analyzing project network. The
PERT version is concerned with stochastic (probabilistic) method of estimating the
network Earliest Start Time. With this approach, we are expected to have 3
different probabilistic estimates of time namely:-
1) Optimistic time (a)
2) Pessimistic time (b)
3) Most likely time (m)
The estimate of the expected time is given by:
=
The variance is given by: =
10

=

This network earliest start time (EST) is assumed to be normally distributed. In
other words, if we have a sequence of expected time for all activities in the
network, it is possible to average it in form of class intervals and then obtain the
frequency of the scores found in each interval.
The mid-class mark is plotted against the frequency to obtain a normal distribution
as follows:

Fig.4: Normal Distribution of (Network Earliest Start Time)

In reality, the actual graph is indeed a ballpark or approximation of normal
distribution in the sense that it is actually -distribution; and -distribution is a
class of Wiebull distribution with appropriate values of scale and shape
parameters.
The approximation makes it possible or feasible for us to use a Normal
Distribution table for such computations. This is because the objective of using a
Normal Distribution is to enable us compute the probability of the network time
0
11

being behind a given schedule. Accordingly, in practice, the project manager
works conscentiously to meet deadline given by the clients.
The points sketch above is the basic philosophical foundations of PERT.





Estimation of Probability Distribution
Recall
E(x) =
Wheie population mean
x ianuom vaiiable
Ex expectation of x
meanaveiage of a paiticulai population
The mean of a sample Ex
Wheie Ex is a statistic calleu an estimatoi
Set
If = 0, then is called an unbiased estimator.
However if 0), then is a biased estimator.
Now
E(x) = . f(x)
12

= . p(x)
where f(x) = p(x) = probability density function
Variance of X, = E
= E ( 2x + )
= E( ) 2E(x) + E( )
= E( ) 2. + ( )
= E( ) 2 + ( )
= E( )


Note:
(1) In this application the variance has been given as:
=

(2) The Central Limit Theory (CLT) can be evoked and used in conjunction
with the fact that a and b represent pessimistic and optimistic times
respectively to compute the variance for the various activities of the network
under review or consideration.

Table 4:
Activities Schedule
time ( )
Expected
time ( )
Variance
( )
13

A 4 4.2 0.25
B 1.6 1.8 0.11
C 2 1.8 0.06
D 1.6 1.7 0.11
E 2 1.9 0.11
F 5.1 5 0.25
G 3 3.6 0.08
H 2 2.5 0.17
I 2 1.8 0.11
J 2 2.7 0.11
K 3 3.1 0.06
L 3 2.4 0.03
M 0 0 0
N 3 2.7 0.06
O 2 1.4 0.01

The values of a, b, and m can be estimated for every activity of the network.
The usual way to obtain this data is to gather information pertaining to the
various activity times of similar building projects earlier executed. If the
number of such similar projects is 10 for example, the least time taken for every
activity of the project can be searched from the tabulation and be used as an
estimate of optimistic time, a. correspondingly, the pessimistic time, b will
represent the highest time for the activity in the tabulation. And the most likely
time, m will be the average of the listings in the appropriate row.
For the C of O example, the activity is represented by D. Along row D the least
entry there is 1 and that represents the optimistic time. Also the maximum
number there is 3 and that represents the pessimistic time. Therefore to compute
the most likely time we sum all the entries in row D and divide by 10 and this
gives the value of m. we have used the concept of minimax and maximax as
our decision rule in the foregoing analysis.

Table 5:
Activities

A 3 3.5 5 4 4.5 6 3.8 4 3 3.2
14

B 1 1.5 2 2.5 1 3 1 2 2.5 1
C 2 2 2.5 1 1.5 2.5 1 1.5 2 1.5
D 1 1 1.5 2 1.5 1.5 1.3 2 2.1 3
E 2 1.5 2 1 1.5 3 2.5 1 1.5 2
F 5 6 4 4.5 5 5.5 7 4 4 4
G 3.5 3.5 3 4 3 4.5 4.7 3 3 2
H 2 2 1.5 3 3.5 1.5 3 2 4 1
I 1.5 1.5 2 3 2.5 1 1 1 2 1
J 3 3 2 2 2 2.5 3 2 2.5 4
K 3 3 3 2.5 2.5 2.5 3 4 4 2
L 2 2.5 3 2.5 3 2 2 2.5 2 2
M 0 0 0 0 0 0 0 0 0 0
N 2.5 2.5 3 3.5 3 2 2 2 3 3
O 1.5 2 1.5 1.5 1.5 1 1 1 1.5 1.6

With these data, the values of a, b and m can be computed for each activity of
the project.

The BLUE which means Best Linear Unbiased Estimator could be expressed
as:
=

Table 6: Project Expected Times
Activities A b m =


A 3 6 4.04 4.19 4
B 1 3 1.75 1.83 1.6
C 1 2.5 1.75 1.75 2
D 1 3 1.69 1.79 1.6
E 1 3 1.81 1.87 2
F 4 7 4.9 5.13 5
G 3 4.7 3.47 3.60 3
15

H 1.5 4 2.4 2.52 2
I 1 3 1.7 1.80 2
J 2 4 2.5 2.66 2
K 2.5 4 3.0 3.08 3
L 2 3 2.35 2.40 3
M 0 0 0 0 0
N 2 3.5 2.65 2.68 3
O 1 1.6 1.41 1.37 2





Table 7:
Events Expected
time ( )
Corresponding
variance for
EST = sum of
activities
variances
Standard
deviation
()
Schedule
time ( )
given


Z =

P(z)
0 0 0 0 0 0 0 0
1 3 0.25 0.500 4 1 0.2 0.4207
2 1 0.06 0.245 2 1 4.082 0.00003
3 4 0.36 0.600 6 2 3.33 0.0012
4 7 0.44 0.660 9 2 3.03 0.0012
5 8.5 0.61 0.780 10.5 2 2.56 0.0052
6 9.5 0.72 0.849 9 -0.5 -0.589 0.2810
7 11.5 0.83 0.911 15 3.5 3.842 0.0010
8 14 0.89 0.943 18 4 4.242 0.00003
9 14 0.89 0.943 18.5 4.5 4.772 0.00003
10 16 0.95 0.975 20 4 4.103 0.00003
11 17 0.96 0.980 21 4 4.082 0.00003

Some Notes on Normal Distribution
16

Normal distribution arises when a given data set is arranged into class intervals
of predetermined class width and frequency of each class interval is determined
from the data set.
When the frequency is plotted against the mid-class mark, gives a frequency
distribution of the sort



Fig. 5: Normal Distributions with various scale and shape parameters
Most times the distribution obtained may be biased if it is skewed to the left or
to the right. Notice that in Fig. 5 above, distribution 1 is skewed to the left hand
and distribution 2 is unbiased, distribution 3 has peakedness and therefore
biased.
Distribution 4 is skewed to the right, but all are normal distributions. The only
difference is that there is biasedness in 1, 3, and 4 respectively. Therefore
peakedness and skewness are all attributes of biasedness.
f
Mid Mark
17

The standard deviation, gives a measure of variability from central tendency
which is the mean (expectation). In the analysis under consideration, focus shall be
sharpened by the search for standard normal variable expressed as:
Z =
Ultimately, we seek for p(z > )




Figure 6:
We need to compute the Z variables and then access the normal probability
table and read off the associated probability for being behind .
Observe that under the normal probability table, the vertical column or the left
contain the Z variables while the top columns give the decimal associated with
the Z variable.
E.g. suppose we wish to compute
P(Z > ) = P(Z > 1.550)
1 (Z)
18

Access the table and read off the column 1.5 and get the remaining decimal
figures from the top headings just like it is with normal logarithm table.
Notice that normal distribution values are presented in different ways. Its
presentation structures have to be properly understood i.e.


Figure 7:

OR
0
19



Figure 8:


Figure 9:
To compute the probability for activity A being behind schedule (see Table Y)
P(0 < z < 0.2) = 0.5000 0.0793
Z = 0.4
0
0
20

= 0.4207
Observe further that in some statistical table the probability can be read off
directly without subtraction. Students should therefore be careful in studying
the table to be used so as to know what to do.








Assignment
Question:
(a) Define the followings
(i) Free float
(ii) Independent Float
(iii) Network analysis

(b) Given the precedence data below.

Table 8: House Construction Data
S/ No Activities Must be
preceded by
Optimistic
time (a)
Pessimistic
time (b)
Most likely
time (m)
21

activity
1 Lay foundation 3.0 6.0 4.0
2 Excavate for drain 1.5 2.0 1.7
3 Lay drains 2 1.5 2.1 2.0
4 Brick work 1, 2, 3 13.0 17.0 15.0
5 Plastering 4 4.0 6.0 4.8
6 Carpentry 4 7.2 9.3 8.4
7 Roofing 6 9.0 11.0 10.0


(c) Given the schedule time is as follows:

Table 9: Events Schedule
Events Schedule Time
1 0
2 2
3 5
4 18
5 26
6 37


Required:-
(i) Sketch the network and indicate the critical path.
(ii) Estimate the probability of the network events being behind schedule

Solution:
1(a)
i. Free Float:-
22

This is the amount of time an activity can be delayed without affecting the
commencement of a subsequent activity at its earliest start time, but may
affect float of a previous activity.
ii. Independent Float:-
This is the amount of time an activity can be delayed, when all the preceding
activities are completed as late as possible and all succeeding activities
completed as early as possible. Independent float therefore does not affect
the float of either preceding or subsequent activities.

iii. Network Analysis:-
Network Analysis is a generic term for a family of related techniques
developed to aid management to plan and control projects.





1(b)
23

(i)


(ii) Estimate the probability of the network event being behind schedule
Calculation of expected times are as depicted here under:
, Lay foundation =
=
= 4.17
, Excavation Drains =
=
= 1.72
24

, Lay Drains =
=
= 1.93
Brick work =
=
= 15
, Plastering =
=
= 4.87
, Carpentry =
=
= 8.35
, Roofing =
=
= 10.0

For Variance, the calculations are as shown below:
25

Lay foundation, = = = 0.25
Excavate for drains, = = = 0.007 0.01
Lay drains, = = = 0.01
Brick work, = = = 0.44
Plastering, = = = 0.11
Carpentry, = = = 0.12
Roofing, = = = 0.11

For Standard deviation:
Lay foundation, = = = 0.5
Excavate drains, = = = 0.1
Lay drain, = = = 0.1
Brick work, = = = 0.67
Plastering, = = = 0.33
26

Carpentry, = = = 0.35
Roofing, = = = 0.33

Summarily, the expected times and the variances are computed and depicted in
Table 10.


Table 10: Summary of Computations
S/No Activity Expected
duration ( )
Variance ( ) Standard
deviation ()
1 Lay foundation 4.17 0.25 0.5
2 Excavate drains 1.72 0.01 0.1
3 Lay drains 1.93 0.01 0.1
4 Brick work 15.00 0.44 0.67
5 Plastering 4.97 0.11 0.33
6 Carpentry 8.36 0.12 0.35
7 Roofing 10.00 0.11 0.33

Now add the appropriate expected duration and variance to obtain the table below.
Table 11:
Events Expected Earliest time
from network
Corresponding variance
of earliest time = sum of
activity variance
1 0.00 0.00
2 1.72 0.01
3 4.17 0.25
4 19.17 0.69
5 23.53 0.81
6 37.53 0.92

27

Now using the above table, we can then compute the probability of each event
being behind a given schedule.

= = = 0
= = = 2.80
= = = 1.06
= = = 1.41
= = = 1.70
= = = 0.55
Table 12:
Event Schedule
time (S)
Network
Earliest time
(t)
Normal z-
value (z =
)
Probability of earliest time
being greater than schedule
time for normal table
1 0 0.00 0.0000
2 2 1.72 2.80 0.0026
3 5 4.17 1.66 0.0485
4 18 19.17 -1.41 0.9207
5 26 27.53 -1.69 0.9543
6 37 37.53 -0.54 0.7054

Further Consideration on CPM
Basic Time Analysis
Some definition:
28

We shall use a simple network to define the following terms;
y Earliest Start time (Head event): EST ( = Earliest Finish Time: EFT)
y Latest Start time (Head event): EST ( = Latest Finish Time: LFT)
y Earliest Start time (Tail event): EST ( = Earliest Start Time: EST)
y Latest Start time (Tail event): LST ( = Latest Start Time: LST)




Figure 10 shows the development of a network.

Fig. 10

Critical Path (Figure 11 refers)
29

The critical path of a network gives the shortest time in which the whole project
can be completed. It is the chain of activities with the longest duration times. There
may be more than one critical path in a network and its possible for the critical
path to run through a dummy.

Fig. 11: Critical path
y EST of a Head Event (Figure 12 refers)

Fig. 12: Forward Pass
30


The earliest start time (EST) of a head event is obtained by adding
onto the EST of the tail event, the linking activity duration starting
from event 0, time 0 and working through the network.
Where two or more routes arrive at an event, the longest route time
must taken as, for example, at activity F, D, and E but route B, D
takes the longer route.
The EST in the finish event (event 5) is the project duration

y LST Latest Start Time (Figure 13 refers)

Fig. 13: Backward pass
To compute the above we need to need to work backwards and that is why it has
been termed Backward Pass.
Starting at the finish event No 5, insert the LST (i.e day 9) and work
backwards through the network deducting each activity duration
from the previously calculated LST.
31

Where the tails of activities B and C join event No 1, the LST for C
is day 3 and the LST for B is day 1. The lowest number is taken as
the LST for event No 1 because if event No 1 occurred at day 3 then
activities B and C could not be completed by day 7 as required and
the project would be delayed.


Float computations (Figure 14 refers)

Figure 14(a)

32


Figure 14(b)

(i)
(ii) Total Float = Latest Headtime (LFT) Earliest Tailtime (EST)
Activity Duration(D)
= 50 10 10
= 30 days
(iii) Free Float = Earliest Headtime (LFT) Earliest Tailtime (EST)
Activity Duration
= 40 10 10
= 20 days
(iv) Independent Float:
33

= Earliest Head time (EFT) Latest Tailtime (LST)
Activity Duration
= 40 20 10
= 10 days
Please note further as follows:
(a) The most important type of float is Total Float. This is because it is
involved with the overall project duration. On some occasion the term Float
is used without qualification. In such cases assume that Total Float is
implied.
(b) The total float can be calculated separately for each activity but it is often
useful to find the total float over chains of non-critical activities between
critical events. For example in Figure 11 the only non-critical chain of
activities are C, E for which the following calculations can be made.
Non-critical Time Time Total Float
Chain Required Available over chain
C, E 3 + 1 = 4 days 7 1 = 6 days = 2 days
i.e. =
Total float = 6 4
= 2 days
Worked Example on Float calculations
Consider the activities involved in the building of a boat as sketched out below:

Activity Preceding
Activity
Activity
Description
Activity Duration
A Design Hull 9
B Prepare Boat Shed 3
34

C A Design mast and
mast mount
8
D A Obtain Hull 2
E A Design Sails 3
F A Obtain mast mount 2
G C Obtain mast 6
H C Design Rigging 1
J B, D Prepare Hull 4
K F, J Fit mast mount to
hull
1
L E, H, G, K Step mast 2
M E, H Obtain sails and
rigging
3
N L, M Fit sails and
rigging
4

Solution:
The network is sketched below. The critical path is shown with two transverse
lines (ll): A, C, G, L, N with a duration of 20 days.

35


Activity EST LST EFT LFT D TF FF IF

0 0 9 9 9
B 0 0 11 18 3 15 8 8

9 9 17 17 8
D 9 9 11 18 2 7
E 9 9 18 22 3 10 6 6
F 17 17 19 22 2 3

17 17 23 23 6
H 17 17 18 22 1 4
I
J 11 18 19 22 4 7 4
K 19 22 23 23 1 3 1

23 23 25 25 2
M 18 22 25 25 3 4 4

25 25 29 29

* = Critical Activities
Computation of floats along Non-critical paths
Non-critical chain Time required Time available Total float over
chain
B, J, K 8 23 15
D, J, K 7 14 7
F, K 3 6 3
E, M 6 16 10
H, M 4 8 4
E, DUMMY 3 14 9
H, DUMMY 1 6 5

Slack
This is the difference between the EST and LST for each event. Strictly it does not
apply to activities but on occasion the terms are confused and unless expressly
stated event slack is always implied. Events on the critical path have zero slack.
36


TIME-COST TRADE OFF
Oftentimes in project management we are confronted with the decision problem of
considering the advantage or disadvantage of reducing project duration and pay
extra cost for such reduction. If there appears to be a perceived advantage, then we
make the decision to crash. Crashing is a term applied to the method or technique
of reducing project or activity schedule time by employing more resources as, for
example, deploying more personnel, use of overtime or perhaps contracting aspects
of the work at higher cost in order to meet set target time. Sometimes this decision
becomes quite expedient.
To illustrate the concept sketched-out in the foregoing presentation. Lets consider
the data relating to two-machine maintenance project. It is assumed that the
management of this project has leaned or depended on past experience to give
perhaps what appears to be a dependable estimate of time so that there seems to be
no need to provide three estimates of time as we had done in the past. By three
estimates of the same activity we mean the following:
Optimistic time, (a)
Pessimistic time, (b) and
Most likely time, (m)
The data are presented in what follows:
Table 16: Activity List for a Two-machine Maintenance Project

Activity Description Immediate Predecessors Expected Time (days)
A Overhaul machine 1 7
B Adjust machine 1 A 3
C Overhaul machine 11 6
D Adjust machine 11 C 3
37

E Test system B, D 2
Lets sketch the network









Fig. 17: Network of a two-machine Maintenance Project
Next we compute the critical path for this project. The detailed computation is
laid out below in a table.

Table 17: Activity Schedule for the Maintenance Project
Earliest Latest Earliest Latest Slack Critical
Activity Start Start Finish Finish (LST EST) Path
Time (EST) Time (LST) Time (EFT) Time (LFT) for each activity

A 0 0 7 7 0 yes
B 7 7 10 10 0 yes
C 0 0 6 7 1 No
D 6 7 10 10 1 No
E 10 10 12 12 0 yes

A
7
C
6
B
3
D
3
E
2
1
2
3
4
5
0
0
6 7
10
12
7 7
10
12
38


The penultimate column indicates which path that is critical. Obviously it is the
path that has zero entries i.e. A B E or nodes 1 2 4 5. This suggests that
the project completion time is:
7 + 3 + 2 = 12 days

Crashing Activity Times
Suppose we are confronted by supervening circumstances demanding that we cut
short the project duration to 10 days instead of the normal 12 days. Obviously this
would entail use of either overtime or more manpower with the concomitant
additional cost. To do this, we shall need some information such as those presented
below:
1. Estimated activity cost under the normal or expected activity time
2. Activity completion time under maximum crashing (that is, shortest possible
activity time)
3. Estimated activity cost under maximum crashing
Then define the following:
= normal activity time
= crashed activity time (at maximum crashing)
C
n
= normal activity cost
C
c
= crashed activity cost (at maximum crashing)
Set M = -
Where M = maximum possible activity time reduction due to crashing.
Also set
K =
39

K is called the crashing cost per activity.
Suppose, for example, that activity A scheduled to be finished in 7 days as is seen
in table 2 at a normal cost of N5,000. If the maximum crash activity time of 4 days
is permitted at a cost of N8,000, then we can carry out the following analysis for
activity A.
= 7
= 4
C
c
= 8,000
C
n
= 5,000

M
A
= 7-4 = 3days
at crashing cost of


= N1,000 per day
We can sketch a graph to illustrate the analysis.


Activity Cost (N)





5000
6000
7000
8000
40






Activity time (days)
Fig. 18: Time-cost Relationship for Activity A

The next questions are
- Which activities to crash
- How much should the activities be crashed
In order to meet the 10days project completion deadline at minimum cost?
To answer these questions we need to do the following analysis:

Table 18: Crashing Details
Normal Crash Total normal Total crash Max. Crash Crash cost
Activity time time cost cost days per day N
N N N K

A 7 4 5000 8000 3 1000
B 3 2 2000 3500 1 1500
C 6 4 5000 9000 2 2000
D 3 1 2000 5000 2 1500
E 2 1 3000 5500 1 2500
N 17,000 N31, 000

4 5 6 7
41



Examination of the last column reveals that A has the least crash cost per day. We
can thus reduce activity A by two-days so that we can complete the Job in 10days
at the minimum additional cost of N2, 000.
Exercise
(i) Construct a PERT/CPM network for a project having the following
activities.
Table 19: Activity List

Activity Immediate predecessor
A
B
C A
D A
E C,B
F C,B
G D,E

The project is completed when both activities F and G are complete.
(ii) Suppose the project has the following activity times
Table 20: Activity List
Activity Time (months)
A 4
B 6
C 2
D 6
E 3
F 3
G 5

(a) Find the critical path for the project network
42

(b) The project must be completed in yrs; do you anticipate difficulty in
meeting the deadline? Explain.
(iii) Suppose the following data are available for the above project.

Table 21: Crash data
Activity Normal Time Crash Time Total Normal
Crash (N
x ).
Total Crash Cost
(N x )
A 4 2 50 70
B 6 3 40 55
C 2 1 20 24
D 6 4 100 130
E 3 2 50 60
F 3 3 25 25
G 5 3 60 75

Required
If there is compelling need to complete the project in 12 months,
(a) What activities should be crashed?
(b) What is the crash cost?
(c) What are the critical activities?
A Linear Programming Method for Crashing Decisions
In this approach we first define our decision variables
time of occurrence of event
= 1, 2, 3, 4, 5
Amount of crush time used for activity j
J = A, B, C, D, E
We re-sketch the network for ease of reference
43











Fig. 17 (Repeated): Network diagram
Earlier we had determined the total normal time project cost to be fixed at N17,
000 (see Table 18)
We can minimize the total project cost (normal cost plus crash cost) simply by
minimizing the crash cost. Thus our linear programming objective function
becomes:
Minimize ..............................(1)
i j
j
Z K y ! 7
1000 1500 2000 1500 2500
A B c D E
Z y y y y y ! ). (see Table 18)
Where K
j
is the crash cost for activity j, j = A, B, C, D, E on per-unit time basis.
Note that the x

variables indicating event occurrence do not result in costs; thus

they have zero coefficients in the objectives function
The constraints for the model involves describing the network, limiting the
activity crash times, and meeting the project completion date, the constraints used
to describe the network are perhaps the most difficult. These constraints are based
on the following conditions.
1
0 0
2
7 7
3
6 7
4
10 10
5
12 12
A
7
B
3
C
6
D
3
E
2
44

1. The time of occurrence of event must be greater than or equal to the
activity completion time for all activities leading into the node or event
2. An activity start time is equal to the occurrence time of its preceding node or
event
3. An activity time is equal to its normal time less the length of time it is
crashed.
The general expression for the three constraints stated above is given by:
[ ] +
Time of occurrence event Actual time for activity j Start time for activity j 3 of 9

Starting with Event 2:
x = j = A, i = 1 = 0 (see network)
[ ] + 0
Occurrence time for event 2 Actual time for activity A Start time for activity A ( =
0)
Note that at node 1, event occurrence time is zero (x
1
= 0)
7
Or + 7 constraint 1

Event 3:
+
+ 0
6
Or + 6 constraint 2
45


Event 4
Here observe that two activities namely B and D enter event (node) 4, we
therefore obtain the expression for our constraints as:
Branch B:


Branch D:


Re-arrange equation (3) and (4):
+ + 3
+ + 3 constraint 3 and 4
Event 5


constraint 5
Above constraints namely
(1), (2), (5), and (6), i.e. altogether, five (5) constraints
are necessary but not sufficient
to describe our CPM network.
The maximum allowable crash time constraints are:


46

See Table 18, column 6.



The desired project completion date is 10days as against the normal completion
date of 12 days. This new constraint can be expressed as

Negativity constraints:






Also




22)

Taken together, there are nine variables namely:

47

And eleven constraints namely:






Thus taking the non-negativity constraints into consideration, we can solve the
nine variable, eleven constraints problem to obtain the following solutions:





Recall that the objective function is:
Min. Z = 1000y
A
+ 1500y
B
+ 2000y
C
+ 1500y
D
+ 2500y
E

Substitute for y
j
values, j = A, B, C, D, E.
Then we obtain:
Z = 1000(2) + 1500(0) + 2000(0) + 1500(1) + 2500(0)
= 2000 + 1500
= 3, 500
The solution values of y
A
= 2 and y
D
=1 tell us activity D must be crashed 1day
( 1,500) in order to meet the 10-day project completion deadline. Because of this
crashing, the time for activity A will be reduced to 7 2 = 5 days, while the time
Eleven
constraints.
48

for activity D will be reduced to 3 -1 =2 days. The total project cost (normal cost
plus crashing cost) will be:
1700 + 2,000 = 3,700.
To generate the new activity schedule under crashing, we use the crashed
activity times and repeat the critical path calculations for the network. Doing this
provides the activity schedule shown in the table below. Note that in our final
solution, all activities are critical.
Resolving the linear programming model with alternative project completion
dates, days, will show the project manager the cost associated with
crashing the project to meet alternative dead lines.
Resource Scheduling
So far we had concerned ourselves with allocation of time and cost to projects. We
now want to focus on control of projects with due regard to resource limitations,
for example:
Material shortage
Limited number of skilled craftsmen
To be able to schedule the resource requirements for a project, the following
details are required:
1. The customary activity times, description and sequences as usual;
2. The resource requirements for each activity showing the classification of the
resource and the quantity required.
3. The resource in each classification that is available to the project. If variation
in availability is likely during the project life, those must also be specified.
4. Any management restrictions that need to be considered, e.g. which
activities may or may not be split or any limitations on labour mobility.
Examples
49

1. A simple project has the following time and resource data. For simplicity
only one resource of labour is considered but similar principles would apply
to other types of interchangeable resources.
Project Data







Resource constraint:
2 men only are available.
Required
i. Draw the activity times on a Gantt Chart based on their ESTs
ii. Based on ESTs, sketch the resource aggregation profile.
iii. Prepare the resource aggregation profile if there are only 2 men are
available.
iv. Do (iii) above with a 5-day constraint.
Solution:
Use forward and backward pass to estimate the EST and LST

i.
C
1
Activity Preceding Activity Duration (Days) Labour Requirements
A 1 2 men
B 2 1 man
C A 1 1 man
D 5 1 man
E B 1 1 man
F C 1 1 man

1
1
3
2
2
4
50

A 1 1 F



2 E



Figure 19: Network diagram









For EST
Slack reduces the duration LF slack
Critical path = activity D

i. Gantt chart
D
Activity Resource Duration ES LS EF LF Slack
A 2 1 0 2 1 4 2
B 1 2 0
C 1 1 1 3 2 4 2
D 1 0
E 1 1 2 4 5 5 2
F 1 1 2 4 5 5 2
0
0
0
4
5 5
3
2
4
B
1
D
5
51


A C F

B E



Time
Time Scale (days)
Fig. 20: Gantt Chart














ii.
4
5

A
No of men
Required
1 2 3 4 5
0
52





Resource Availability
Level




Fig. 21: Resource Allocation based on ESTs
iii.





D
A B C E F


Fig. 22: Resource allocation with 2-man constraint
Total Float = LST EST D
A: 3 0 1 = 2

C
0
1
1
2
3
4
5
3
2
4 5
Extra time of
1 day is
likely to
result
Prepared with due regard to
floats in order to smooth out
resource requirements



N
o

o
f

m
e
n

r
e
q
u
i
r
e
d

53

B: 4 0 2 = 2
C: 4 1 1 = 2
D: 5 0 5 = 0
E: 5 2 1 = 2
F: 5 2 1 = 2

3 men are likely to be needed for 2days
i.e. day 2 to day 4

Extra resources





days
Fig. 23: Resource Allocation profile based on 5-day constraint






Example 2:
0 1 2 3 4 5
1
2
3
4
5
D


B

A
C


E F
54

A project has the following activity durations and resource requirements.
Activity Preceding Activity Duration (days) Resource requirements (units)







(a) Assume no restrictions, show the network, critical path and resource
requirements on a day-by-day basis, assuming that starts are made on the
EST of each activity.
(b) Assume that there are only 6 units of resources, what would the plan be?

D

C 2





Fig. 24: Network diagram



A 6 3
B 3 2
C 2 2
D C 2 1
E B 1 2
F D 1 1
0
0 0


2 3
3
4 5
1
3 5
4
6 6
2
F
1
B
3
E
1
A
6
2
A
C
B
E
55






Time (days)
Fig.25: Gantt chart


B
E
C
D F

A


Time (days)
Fig. 26: Resource Allocation based on no Restriction
Floats:
F = LST EST D
A: 6 0 6 = 0
B: 5 0 3 = 2
C: 3 0 2 = 1
D: 5 2 2 = 1
D F
2 3 4 5
6
6
7
5
4
3
2
1
1
2
3 4
5
Resource
(units)
56

E: 6 3 1 = 2
F: 6 4 1 = 1
From the above analysis activities B and E have a float of 2 days. We can therefore
start the chain two days late. Having regard to this, we can now sketch the resource
allocation profile like so:
A : 6 0 6 = 0
B : 5 0 3 = 2
C : 3 0 2 = 1
D : 5 2 2 = 1
E : 6 3 1 = 2
F : 6 4 1 = 1

Resource
B E






Fig. 27:

Activity on Nodes
Points to note:
C
6
5
4
3
2
1
1 2 3 4
5 6
D
F
A
Time (days)
57

1. This type of network, sometimes known as precedence diagram, is an
alternative form of presentation to the conventional type we had been using
since the commencement of this series of lectures.
Activities on node network are characterized by:
y Activities are shown on boxes, not as arrows
y No events appear
y Boxes are linked by lines to indicate their sequence or precedence
y A box appears for the start and another for the finish of a project
y No dummies are necessary
The activity on node approach is best illustrated by comparison with the procedure
for drawing conventional networks.

Example Conventional Network Activity on Node network

X Y

X
Y







B
D
A C
B
D

F
1
1
1 3
C
1
Z
(c). Activity C depends
upon activity A. Activity
D depends upon activity
A and B.
(b). Activity Z depends
upon activity X and Y
(a). Activity X depends
upon activity Y
(d). Activity B can start
immediately activity A
is complete. Durations
are 8 days and 6 days
respectively
Y
X
Y
Z
B D
C A
A
6 days 8 days

6 days
58



A
1


2 B E
1

(i) conventional Network
Note further as follows:
i. Events as such do not appear in activity on node (A/N) networks
ii. The lines shown in A/N network indicate precedence and are not activities.
The activities are represented by the square boxes.
iii. From example (c), it will be seen that dummies are not necessary in A/N
networks.
iv. The time (6 days) shows on the A/N network (see (d) above) as known as
the depending time.







4
2
2
4
59




















Note
(a) The lines joining the boxes are not activities; they are precedence as earlier
explained.
(b) The ESTs/LSTs in the boxes are calculated by the same process as
previously described but note that they are not the same values as shown in
the events of the conventional network.
(c) The EFT and LFT are calculated by adding the activity time on the EST and
LST respectively.
A 1
0 1
2 3
C 1
1 2
3 4
F 1
2 3
4 5
D 5
0 5
0 5
E 1
2 3
4 5
B 2
0 2
2 4
5
Finish
5
0
Start
0
. .
EST EFT
LST LFT
Duration
Activity
Code
60

(d) The critical path is found by the usual method of comparing the EST and the
LST (or EFT and LFT)
Example
(a) Draw an activity or node diagram for the following project.

PP.72 Activity Preceding activity Duration
1 4
2 1 7
3 1 5
4 1 6
5 2 2
6 3 3
7 5 5
8 2,6 11
9 7,8 7
10 3 4
11 3
12 9,10,11 4







(b) Calculate the EST/LST/and LFT values for each box
6 3 3 5 8 11
10 4
9 13
26 30
61


















Example
The following activity-on-node network shows the relationship between the eleven
activities which make up a particular stage of a large construction project. Within
each activity box, the letter denotes the name of the activity, and the number of
its duration in weeks.



START
B6 D12 G2
F6
62













Required:
a)
i. How long will it take to complete this stage of the project?
ii. What is the critical path?
iii. By how much would the duration of activity J have to increase before it
becomes critical?
iv. What would be effect, if any, on both the duration of the project and the
critical path if activity D does not have to be preceded by B?

b) The cash required to complete each activity is as follows:
Activity A B C D E F G H J K L
Cash (N1000) 30 18 12 12 8 12 6 15 16 12 6

63


What is the maximum amount of cash required in any one week and when
will this occur?
You should assume that all activities start at their earliest time and that the
necessary cash is used at a uniform rate throughout the duration of each
activity.

Solution:
The first stage is to calculate the EST/LST values for the network

















A10
0 0
C3
13 15
E4
13 15
H5
17 19
K6
22 24
L2
30 30
B6
10 10
D12
16 16
G2
28 28
F6
16 22

Start
0

END
32 32
J4
17 20
0
64

(a)
(i) Completion time = 32 weeks
(ii) Critical path A, B, D, G, L
(iii) 3 weeks
(iv) The removal of the link from B to D would alter the critical path to A-
C-E-H-K-L, duration 30 weeks.
(b) Tables of EST and cash required per week are as shown below

Activity Duration Start Finish Cash per week (N000)
A 10 0 10 3
B 6 10 16 3
C 3 10 13 4
D 12 16 28 1
E 4 13 17 2
F 6 16 22 2
G 3 28 30 3
H 5 17 22 3
I 4 17 21 4
K 6 22 28 2
L 2 30 32 3

A: = 3 per week
B = = 3 per week
65

C = = 4 per week
From the above table the concurrent activities and cash requirement can be
established



110 A 3
1113 B, C
1416 B, E
17 D, E, F
1821 D, F, H, J
22 D, F, H
2328 D, K
2930 G 3
3132 L 3

Therefore the maximum cash requirement is N10,000 for the period 18 21 weeks
where the activities D, F, H and J are in progress.
Pert/Cost
We have learnt that PERT and CPM are useful tools for project planning and
scheduling with due regards to time. We shall now concentrate on PERT/COST
that focus on scheduling and controlling projects using the criteria of cost
considerations. This type (version) enables project managers to maintain costs
associated with project executions within budget limits.
Generally, PERT/CPM contains detailed activities that may not be convenient for
analyzing associated cost of the project. In this regard, activities that share similar
Weeks
Activities in
progress
Cash
Required
66

cost classification may be grouped and called work packages. With this type of
grouping, control on project by sections, departments or even sub-contractors
undertaking such projects may easily control cost of projects by virtue of such
groupings (work-packages). The steps involved in the use of PERT/COST control
system are as follows:

1. There is need for the specification of network expected times (i.e duration).
This enables us to estimate the associated floats, i.e. total floats.
2. The budget or estimated cost needs to be specified.
3. From (1) and (2) above, the cost gradients (cost rates) can be estimated or
rather calculated.
4. Next, compute the total float based on our network estimation of the
following:
EST
LST
EFT, and
LFT
From the above analysis, the slack and critical paths are estimated
5. Next, we establish budgeted cost for each activity based on the knowledge of
EST earlier calculated in (4) above.
6. Next, we also establish similar budgeted cost for each activity on the basis of
LST.
7. From (5) and (6), the columns for monthly (weekly) costs and the associated
cumulative monthly cost as applicable, need to be computed by column
addition (month by month).
8. Another crucial step is to plot total budgeted cost (cumulative monthly cost)
against time. This will yield a looped graph whose enclose portion depicts
67

the feasible region of budget estimate. All budget planning and control are to
be done within this feasible region.
9. The final step involves the specification of actual cost and percentage
completion. Based on this information, we compute the following for each
activity in the network.


Estimated budget, = ( /100) (1)
Where I = activity number
= percentage completion of activity i
= budget for activity i
Then A = (2)
Where A = the actual budget that needs to given for each activity i
= the deviation or discrepancy between the actual A and estimated
or budget.
When > 0, we call such discrepancy or deviation over-run, if however, < 0,
we refer to such cost as under-run. Obviously, situations of over-run are never
desirable. Total project cost over-run to date is the sum of column over the
specified activity i.
On the other hand,
= ( /100)
And = = percentage cost overrun
Perhaps an example will help to drive the above concepts home.
Consider the following information
68



F 2
11 D 3
B
G 1


Activity
Expected time
(month)
Budgeted or
Estimated cost
Budgeted cost per
month(cost gradient)
A 2 10,000 5,000
B 3 30,000 10,000
C 1 3,000 3,000
D 3 6,000 2,000
E 2 20,000 10,000
F 2 10,000 5,000
G 1 8,000 8,000


Lets calculate the floats by first determining the EST and LST (forward pass and
backward pass) respectively.



2 F
11 3
B
3 G 1

C
A

E
2
1
3
4
5
6
2
3
2
1

0

2

6

3
C
A
E
D
2
1
3
4
5
6
2
3
2
0
5
6
5
7
8 8
1
69


LST =5 for E because it will take 7 days to complete.












Note the following:
The number of months = 8, derived from the critical path duration: B D F = 3 +
3 +2 = 8months.
EFT = sum of activity durations along the relevant path(s) concerned.

LST:
For A, recall that the activity duration is 2 and latest finish time is 5 (see
circle 2), therefore if we start latest in the third day we shall still finish on the fifth
day. For E, the same as in A except that we 2days to do the work and the work
have to be finished in the 7
th
month. Therefore we can start latest the 6
th
month in
order to finish in the 7
th
month.
We now move to step (5)
Activity EST LST EFT LFT LST-EST Slack
LFT-EST
Critical path?
A 0

2 5 3
B 0 0 3 3 0 Yes
C 2 5

6 3
D 3 3 6 6 0 Yes
E 3

5 7 2
F 6 6 8 8 0 yes
G 5 7 6 8 2
70






Budgeted Cost Based on EST Schedule (N x )
Months
Activity 1 2 3 4 5 6 7 8
A
B
C
D
E
F
G
5
10
5
10

10
3



2
10



2
10



2


8





5





5

Monthly
cost

Cumulative
(Total
project
cost)
15



15
15



30
13



43
12



55
12



67
10



77

5



82
5



87



Budgeted Cost Based on LST Schedule (N x )
Months
Activity 1 2 3 4 5 6 7 8
A
B
C
D
E
F
G

10

10

10
5


2
5


2


3
2
10




10
5





5
8
71

Monthly
cost

Cumulative
10


10
10


20
10


30
7


37
7


44
15


59
15


74
13


87


Region of feasible budget
for total project cost
Earliest start time (EST)
cost schedule
Latest start time (LST)
cost schedule
100
90
80
70
60
50
40
30
20
10
1
2 3
4
5
6
7
8
B
u
d
g
e
t
e
d

t
o
t
a
l
p
r
o
j
e
c
t
e
d

c
o
s
t
(
c
u
m
u
l
a
t
i
v
e
)
N(000)

Graph of feasible budgets for total project costs

At this juncture we require to know the activity cost estimate. Suppose we are
given the following:



Activity Budgeted cost Activity Budgeted cost
A
N 10,000
E
N 20,000
B 30,000 F 10,000
C 3000 G 8000
D 6000
72



Finally we use
= A
73


Discrepancy equation to ascertain areas of over run and under run.
To do this, we need the actual cost of the relevant activities and the corresponding
percentage completion. Suppose, for instance, we are given such information as
below.

Activity
Actual cost ( )
percentage completion
A 12,000 100
B 30,000 100
C 1000 50
D 2000 33
E 10,000 25
F 0 0
G 0 0

Obviously,
= x (10,000) = N 10,000
= x (30,000) = 1500
= A
= 12,000 10,000
= 2,000
Also,
= A
= 1000
But = 1,500
= 1000 1500
74

= 500, a cost under run i.e. saving
A cost status report can now be prepared as follows:
Activity Actual Cost (AC) Estimated budgeted Difference
( ) Budget Cost ( ) D
= ( )
A 12,000 10,000 2000
B 30,000 30,000 0
C 1,000 1,500 -500
D 2,000 2,000 0
E 10,000 2,500 7,500
F 0 0 0
G 0 0 0

N 55,000

N 46,000 N 4000

Note:
= x 30,000
= 30,000
= x 6,000
= 1980 -N-2,000
= x 10,000
= 2,500
= x 0
= 0
= x 0
75

= 0
= 4,000
= 46,000
Over run = x 100 9%
Assignment
Given:
Activity Expected time Expected cost Budgeted cost per month
A 6 90 15
B 2 16 8
C 3 3 1
D 5 100 20
E 3 6 2
F 2 2 1
G 3 60 20
H 4 20 5
I 2 4 2
J 2 2 1
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76




Routing

6 5 D 2 Cost Estimate

E 3
2
B

1
2 5
7
3
6
8 4
Product
design
A
Prototype
C 3
F
Testing
G 3
Final Report
J 2
Pricing and
Forecast
2
1
Completion
4
Market
Survey
H
Market
Research
plan
Market
Brochure