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Project Management

A project is a well defined task which has a definable beginning and a definable end
and requires one or more resources for its completion.
Project is group of interrelated activities.
Project management is evolved to coordinate and control all project activities in an
efficient and cost effective manner.

The salient features of a project are:

• A project has identifiable beginning and end points.
• Each project can be broken down into a number of identifiable activities which
will consume time and other resources during their completion.
• A project is scheduled to be completed by a target date.
• A project is usually large and complex and has many interrelated activities.
• The execution of the project activities is always subjected to some
uncertainties and risks.

Basic terminology :
Network Diagram :
A network is the graphical representation of the project activities arranged in a logical
sequence and depicting all the interrelationships among them. A network consists of
activities and events.
Rules for drawing network diagram
Rule 1: Each activity is represented by one and only one arrow in the network.

Rule 2: No two activities can be identified by the same end events

Rule 3: Precedence relationships among all activities must always be maintained.

Rule 4: Dummy activities are used to preserve logic in network diagram.

Dummy activities can be used to maintain precedence relationships.
But dummy activities should be used when actually required. Their use should be
minimized in the network diagram
Rule 5: Looping among the activities must be avoided.

Rule 6 : Dangling must be avoided.

Fulkerson's Rule.
Following steps are involved in the numbering of the nodes:
• The initial event, which has all outgoing arrows and no incoming arrow, is
numbered as 1.
• Delete all the arrows coming out from the node just numbered (i.e. 1). This
step will create some more nodes (at least one) into initial events. Number
these events in ascending order (i.e. 2, 3 etc.).
• Continue the process until the final or terminal node which has all arrows
coming in, with no arrow going out, is numbered.
As a recommendation it must be noted that most of the projects are liable for
modifications, and hence there should be a scope of adding more events and
numbering them without causing any inconsistency in the network. This is achieved
by skipping the numbers (i.e. 10, 20, 30).

Construction of Network diagram

Two alternative types of project networks are available .

One type is the activity-on-arc (AOA) project network, where each activity is rep-
resented by an arc. A node is used to separate an activity (an outgoing arc) from each
of its immediate predecessors (an incoming arc). The sequencing of the arcs thereby
shows the precedence relationships between the activities.

The second type is the activity-on-node (AON) project network, where each activ-
ity is represented by a node. The arcs then are used just to show the precedence
relationships between the activities. In particular, the node for each activity with
immediate predecessors has an arc coming in from each of these predecessors.


Calculations in Network Analysis ( Critical Path analysis)

The following calculations are required in network analysis in order to prepare a
schedule of the project.
• Total completion time of the project
• Earliest time when each activity can start (i.e. earlist start time)
• Earliest time when each activity can finish (i.e. earlist finished time)
• Latest time when each activity can be started without delaying the project (i.e.latest
start time)
• Latest time when each activity can be finished without delaying the project
(i.e.latest finish time)
• Float on each activity (i.e. time by which the completion of an activity can be
delayed without delaying the project)
• Critical activity and critical path
• Slack of each event
• Minimum time required to complete the project.
Total Float (TF): Maximum amount by which an activity can be delayed from Early
Start without delaying the project.
TF = LFT - EST - activity duration

Free Float (FF) :Maximum amount by which an activity can be delayed without
delaying the Early Start of any following activity.
Free float is the time by which completion of an activity can be delayed without
delaying immediate successor activities.
FF = TF- Head event slack of activity
Independent Float (IndF) :Amount by which an activity can be delayed Without
delaying the the project;Even if all predecessors start at itsLate Finish time and all
Successors are at Early Start time.
Independent float is amount of time by which an activity can be delayed without
affecting the immediate succeeding as well as immediate preceeding activities.
IndF = FF -Tail event slack of an activity

Float interpretation:
Programme Evaluation and Review Technique ( PERT)
CPM is based on single time estimates where as in PERT activity duration is not certain.

Activity duration follows Beta distribution as shown in the figure below

Probability of completing the project within schedule time :

As the value of Z is known probability can be found out from normal distribution
Time -Cost Trade off procedure
Project cost = Direct cost + Indirect cost

Direct Cost : This is the cost associated with those activities which are directly
involved in the completion of the project. For example cost material , equipment and
labour required to perform the activity.

Cost - time slope represents increase in direct cost when project is crashed by one

Indirect Cost : Cost associated with the activities which are not directly involved in the
completion of the project. it can be subdivided into two parts : Fixed indirect cost and
Variable indirect cost . Fixed indirect cost is due to administrative expenses, license fee,
insurance cost etc and does not depend on progress of project . Variable Indirect cost
depends on time consumed by the project and consists of overhead expenses , interest on
capital and depreciation . it is assumed that indirect cost increases linearly with time.

The sum of direct and indirect cost gives the project total cost ,As direct cost decreases
with time and indirect cost cost increases with time, the project total cost curve will have a
point where the total cost will be minimum.The time corresponding to this point is called
the optimum duration.and the cost the optimum cost.