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GIET RAJAHMUNDRY
Project
A project is an endeavour involving a connected sequence of
activities and a range of resources, which is designed to achieve
a specific outcome and which operates within a time frame,
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
Typically has its own management structure
Need leadership
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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 Planning
Resource Availability and/or Limits
Due date, late penalties, early completion
incentives
Budget
Activity Information
Identify all required activities
Estimate the resources required (time) to complete
each activity
Immediate predecessor(s) to each activity needed
to create interrelationships
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Gantt Chart
Graph or bar chart with a bar for each project activity that shows
passage of time
Provides visual display of project schedule
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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
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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)
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Project Network
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Design house
and obtain
financing
3
2
Dummy
0
1
Order and
receive
materials
4
Select
paint
Build
house
Finish
work
3
1
Select
carpet
Build house
4
3
2
2
Start
7
1
1
3
Finish work
3
1
5
1
Order and
receive Rao GGSESTC
Dr. Varaprasada
Select paint
materials
6
1
Select carpet
24
A
C
B
A
B
A
D
B
Dummy
C
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Concurrent Activities
3
Lay foundation
Lay
foundation
3
2
Order material
0
1
Order material
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Dummy
26
Network example
Illustration of network analysis of a minor redesign of a product and
its associated packaging.
The key question is: How long will it take to complete this project ?
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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
earliest start time plus activity time
EF= ES + t
Backward Pass
31
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 becomes a critical activity,
i.e., 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
h, 9
g, 17
a, 6
i, 6
b, 8
d, 13
j, 12
c, 5
e, 9
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CPM Example
ES and EF Times
f, 15
h, 9
g, 17
a, 6
0 6
i, 6
b, 8
0 8
d, 13
j, 12
c, 5
0 5
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e, 9
Dr. Varaprasada Rao GGSESTC
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CPM Example
ES and EF Times
f, 15
6 21
h, 9
g, 17
a, 6
0 6
6 23
i, 6
b, 8
0 8
c, 5
0 5
d, 13
j, 12
8 21
e, 9
5 14
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CPM Example
ES and EF Times
f, 15
6 21
g, 17
a, 6
0 6
6 23
i, 6
23 29
h, 9
21 30
b, 8
0 8
c, 5
0 5
d, 13
8 21
e, 9
5 14
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j, 12
21 33
Projects EF = 33
36
CPM Example
LS and LF Times
a, 6
0 6
b, 8
0 8
c, 5
0 5
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f, 15
6 21
g, 17
6 23
d, 13
8 21
i, 6
23 29
27 33
h, 9
21 30
24 33
j, 12
21 33
21 33
e, 9
5 14
Dr. Varaprasada Rao GGSESTC
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CPM Example
LS and LF Times
a, 6
0 6
4 10
b, 8
0 8
0 8
c, 5
0 5
7 12
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f, 15
6 21
9 24
g, 17
6 23
10 27
d, 13
8 21
8 21
e, 9
5 14
Dr. Varaprasada
Rao GGSESTC
12 21
i, 6
23 29
27 33
h, 9
21 30
24 33
j, 12
21 33
21 33
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CPM Example
Float
a, 6
0 6
3
3 9
b, 8
0 8
0
0 8
c, 5
7 0 5
7 12
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f, 15
3 6 21
9 24
g, 17
6 23
4
10 27
h, 9
3 21 30
24 33
i, 6
4 23 29
27 33
d, 13
0 8 21
8 21
e, 9
7 5 14
12
21
Dr. Varaprasada
Rao GGSESTC
j, 12
0 21 33
21 33
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CPM Example
Critical Path
f, 15
h, 9
g, 17
a, 6
i, 6
b, 8
d, 13
j, 12
c, 5
e, 9
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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 + to
6
2
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=2
Variance:
Vt GGSESTC
=
Dr. Varaprasada Rao
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=
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= tp
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Time
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PERT Example
Immed. Optimistic Most Likely Pessimistic
Activity Predec. Time (Hr.) Time (Hr.) Time (Hr.)
A
B
C
D
E
F
G
H
I
J
K
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--A
A
A
B,C
B,C
E,F
E,F
D,H
G,I
4
6
1
4.5
3
3
4
5
0.5
1
3
4
1
1.5
5
6
2
5
2.5
2.75
3
5
Dr. Varaprasada Rao GGSESTC
8
5
3
6
1.5
5
5
7
8
4.5
7
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PERT Example
PERT Network
D
C
B
I
F
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PERT Example
Activity
A
B
C
D
E
F
G
H
I
J
K
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Expected Time
6
4
3
5
1
4
2
6
5
3
5
Dr. Varaprasada Rao GGSESTC
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
Activity ES
A
B
C
D
E
F
G
H
I
J
K
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0
0
6
6
6
9
9
13
13
19
18
EF
LS
LF
6
4
9
11
7
13
11
19
18
22
23
0
5
6
15
12
9
16
14
13
20
18
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
Vpath = VA + VC + VF + VI + VK
= 4/9 + 0 + 1/9 + 1 + 4/9
= 2
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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PROJECT COST
51
Project Crashing
Crashing
reducing project time by expending additional resources
Crash time
an amount of time an activity is reduced
Crash cost
cost of reducing activity time
Goal
reduce project duration at minimum cost
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Activity crashing
Crash
cost
Crashing activity
Slope = crash cost per unit time
Normal Activity
Normal
cost
Normal
time
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Crash
time
Activity time
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Time-Cost Relationship
Time-Cost Tradeoff
Min total cost =
optimal project
time
Direct cost
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time
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2
8
12
7
4
1
12
3
4
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4
6
4
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Normal
cost Rs
3000
2000
4000
50000
500
500
1500
75000
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Crash
time
7
5
3
9
1
1
3
Crash
cost Rs
5000
3500
7000
71000
1100
1100
22000
Allowable
crash time
5
3
1
3
3
3
1
slope
400
500
3000
7000
200
200
7000
110700
56
R7000
R500
Project duration = 36
2
8
R700
12
From..
7
4
1
12
R400
3
4
R3000
6
4
5
4
R200
R200
R7000
R500
2
8
To..
R700
12
7
4
1
Project
duration = 31
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R400
3
4
5
4
R3000Rao GGSESTC
Dr. Varaprasada
R200
6
4
R200
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Benefits of CPM/PERT
Limitations to CPM/PERT
59
Computer Software
for Project Management
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Practice Example
A social project manager is faced with a project with the following
activities:
Activity Description
Duration
5w
12w
5w
14w
15w
4w
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Practice problem
Activity Description
1-2
Social work team to live in village
1-3
Social research team to do survey
Duration
5w
12w
3-4
2-4
5w
14w
3-5
4-5
15w
4w
2
1
5
3
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Re-cap
Please try to understand various systems now
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ACTIVITY ON NODE
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Step 1-Define the Project: Cables By ITD is bringing a new product on line to be
manufactured in their current facility in existing space. The owners have identified 11
activities and their precedence relationships. Develop an AON for the project.
Activity
Description
A
Develop product specifications
B
Design manufacturing process
C
Source & purchase materials
D
Source & purchase tooling & equipment
E
Receive & install tooling & equipment
F
Receive materials
G
Pilot production run
H
Evaluate product design
I
Evaluate process performance
J
Write documentation report
K 5/10/2016
Transition to manufacturing
Dr. Varaprasada Rao GGSESTC
Immediate Duration
Predecessor (weeks)
None
4
A
6
A
3
B
6
D
14
C
5
E&F
2
G
2
G
3
H&I
4
J
65 2
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68
ACTIVITY ON ARROW
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PERT
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Activity
A
B
C
D
E
F
G
H
I
J
K
Description
Most likely
time
4
7
3
7
16
5
2
3
3
4
2
Pessimistic
time
6
10
5
9
20
8
2
4
5
6
74 2
Optimistic
time
2
3
2
4
12
2
2
2
2
2
2
Most likely
Pessimistic
time
time
4
6
7
10
3
5
7
9
16
20
5
8
2
2
3
4
3
5
4
6
Dr. Varaprasada Rao GGSESTC
2
2
Expected
time
4
6.83
3.17
6.83
16
5
2
3
3.17
4
76
2
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Expected duration
44.66
44.83
23.17
23.34
78
PROBABILITY IN PERT
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po
80
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Activity
Optimistic
Most Likely
Pessimistic
Variance
0.44
10
1.36
0.25
0.69
12
16
20
1.78
1.00
0.00
0.11
0.25
0.44
0.00
81
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Path
Number
1
Activities on
Path
A,B,D,E,G,H,J,k
Path Variance
(weeks)
4.82
A,B,D,E,G,I,J,K
4.96
A,C,F,G,H,J,K
2.24
A,C,F,G,I,J,K
2.38
82
z
2
path standard time
P
83
Path
Number
4.82
Probability of
Completion
A,B,D,E,G,H,J,k
4.82
1.5216
0.9357
A,B,D,E,G,I,J,K
4.96
1.4215
0.9222
A,C,F,G,H,J,K
2.24
16.5898
1.000
A,C,F,G,I,J,K
2.38
15.9847
1.000
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Different deadlines
Penalty clauses
Need to put resources on a new project
Promised completion dates
85
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Normal
Time (wk)
Normal
Cost
Crash
Time
Crash
Cost
8,000
11,000
3,000
30,000
35,000
5,000
6,000
6,000
24,000
28,000
2,000
14
60,000
12
72,000
6,000
5,000
6,500
1500
6,000
6,000
4,000
4,000
4,000
5,000
1,000
4,000
6,400
1,200
5,000
87
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5,000
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Scheduling:
Based on the time estimates, the start and finish times for each
activity are worked out by applying forward and backward pass
techniques, critical path is identified, along with the slack and float for
the non-critical paths.
Controlling:
Controlling refers to analyzing and evaluating the actual
progress against the plan. Reallocation of resources, crashing and
review of projects with periodical reports are carried out.
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91
92
Dummy Activity
An imaginary activity which does not consume any resource and
time is called a dummy activity. Dummy activities are simply
used to represent a connection between events in order to
maintain a logic in the network. It is represented by a dotted line
in a network, see Figure 8.5.
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a.
b.
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2. The event numbered 1 is the start event and an event with highest number is
the end event. Before an activity can be undertaken, all activities preceding it
must be completed. That is, the activities must follow a logical sequence (or
interrelationship) between activities.
3. In assigning numbers to events, there should not be any duplication of event
numbers in a network.
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Example 1:
Draw a network for a house construction project. The sequence of
activities with their predecessors are given in Table 8.1, below.
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Further, any delay in completing the critical activities will increase the
project duration.
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The activity, which does not lie on the critical path, is called non-critical
activity.
These non-critical activities may have some slack time.
The slack is the amount of time by which the start of an activity may be
delayed without affecting the overall completion time of the project.
But a critical activity has no slack.
To reduce the overall project time, it would require more resources (at
extra cost) to reduce the time taken by the critical activities to complete.
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100
Procedure :
Step 1: Begin from end event and move towards the start
event. Assume that the direction of arrows is reversed.
Step 2: Latest Time TL for the last event is the earliest
time. TE of the last event.
Step 3: Go to the next event, if there is an incoming activity, subtract
the value of TL of previous event from the activity duration time. The
arrived value is TL for that event. If there are more than one incoming
activities, take the minimum TE value.
101
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Free Float FFij: The time by which the completion of an activity can
be delayed from its earliest finish time without affecting the
earliest start time of the succeeding activity is called free float.
103
Critical Path:
After determining the earliest and the latest scheduled times for various
activities, the minimum time required to complete the project is
calculated. In a network, among various paths, the longest path which
determines the total time duration of the project is called the critical path.
The following conditions must be satisfied in locating the critical path of a
network.
104
(i) From the data given in the problem, the activity network is
constructed as shown in Figure given below
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TL10 = TE10 = 22
TL9 = TE10 t9,10 = 22 7 = 15
TL8 = TE10 t8, 10 = 22 5 = 17
TL7 = TE8 t7, 8 = 17 2 = 15
TL6 = TE8 t6, 8 = 17 1 = 16
TL5 = min (TE6 t5, 6 and TE7 t5, 7)
= min (16 4 and 15 8) = min (12, 7)
= 7 days
TL4 = TL9 t4, 9 = 15 5 =10
TL3 = min (TL4 t3, 4 and TL5 t3, 5 )
= min (10 1 and 7 6) = min (9, 1)
= 1 day
TL2 = TL4 t2, 4 = 10 1 = 9
TL1 = Min (TL2 t1, 2 and TL3 t1, 3)
= Min (9 4 and 1 1) = 0
106
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Taking all these time estimates into consideration, the expected time
of an activity is arrived at.
The average or mean (ta) value of
the activity duration is given by,
The variance of the activity time
is calculated using the formula,
110
Example
An R & D project has a list of tasks to be performed whose time estimates are
given in the Table 8.11, as follows.
111
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112
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The probability of completing the project within 19 days is given by, P (Z< Z0)
To find Z0 ,
we know, P (Z <Z Network Model 0) = 0.5 z (1.3416) (from normal tables, z (1.3416) = 0.4099)
= 0.5 0.4099
= 0.0901
= 9.01%
Thus, the probability of completing the R & D project in 19 days is 9.01%.
Since the probability of completing the project in 19 days is less than 20% As in question, we
find the probability of completing it in 24 days.
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COST ANALYSIS
The two important components of any activity are the cost and time.
Cost is directly proportional to time and vice versa.
For example, in constructing a shopping complex, the expected time of completion can be
calculated using the time estimates of various activities. But if the construction has to be
finished earlier, it requires additional cost to complete the project. We need to arrive at a
time/cost trade-off between total cost of project and total time required to complete it.
Normal time:
Normal time is the time required to complete
the activity at normal conditions and cost.
Crash time:
Crash time is the shortest possible activity
time; crashing more than the normal time
will increase the direct cost.
Cost Slope
Cost slope is the increase in cost per unit of
time saved by crashing. A linear cost curve
is shown in Figure 8.27.
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Example
An activity takes 4 days to complete at a normal cost of Rs. 500.00. If it is
possible to complete the activity in 2 days with an additional cost of Rs.
700.00, what is the incremental cost of the activity?
Incremental Cost or Cost Slope
Project Crashing
Procedure for crashing
Step1: Draw the network diagram and mark the Normal time and Crash time.
Step2: Calculate TE and TL for all the activities.
Step3: Find the critical path and other paths.
Step 4: Find the slope for all activities and rank them in ascending order.
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Example
The following Table
8.13 gives the activities
of
a
construction
project and other data.
If the indirect cost is Rs. 20 per day, crash the activities to find the minimum
duration of the project and the project cost associated.
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Solution
From the data provided in the table, draw the network diagram (Figure 8.28)
and find the critical path.
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The available paths of the network are listed down in Table 8.15
indicating the sequence of crashing (see Figure 8.29).
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Activity
Crashed
Project
Duration
Critical Path
Indirect
Cost in
(Rs.)
Total
Cost in
(Rs.)
14
1-2-5
490
14 x 20 =
280
770
1 2(2)
2 5(2)
2 4(1)
3 4(2)
10
125
1345
1245
490 + (2 x 15) + (2 x
100) + (1 x 10) + (2 x
20) = 770
10 x 20 =
200
970
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Assignment
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