Rizvi Management Institutes Network Analysis

Network Diagram

Activity Preceding Activity Activity Preceding Activity Activity Duration (Days)

A - A - 1–2 5
B A B A 2–3 3
C A C A 2–4 2
D B D B 2–5 1
E C E B 3–6 4
F D F CE 4–8 6
G E G D 5–7 5
H FG H F 6–8 7
I GH 7–8 2

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Example 1
A project consists of the following activities and time estimates in days. Summarize the CPM calculations
in a tabular form including total, free and independent floats. Hence, find the critical path.
Activity Duration Activity Duration
1-2 6 4-5 2
1-3 8 4-6 8
2-3 2 5-6 11
2-4 4 6-7 9
2-5 1 6-8 4
3-4 5 7-8 6

Example 2
Given the following information, draw the network, determine the different types of floats and find the
critical path.
Activity Predecessor Activities Duration
A - 2
B - 3
C A, B 4
D B 1
E A 5
F C 3
G E, F 2
H D, F 7
I G, H 6
J I 3

Example 3
Preceding Duration Preceding Duration
Job Job
Activities (No. of days) Activities (No. of days)
A - 2 K D, I 1
B - 3 L D, K 1
C - 3 M C, D, J, E 10
D C 1 N E, J, M 8
E D 6 O D, H 15
F B 1 P K, L, N, O 1
G C, D 5 Q G 4
H C, D 8 R F, Q 3
I C, D 5 S R 2
J A 4 T S 1

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Example 4

Details for the Seminar Planning Project has been developed:

Preceding Estimated activity

Activity Details
Activity duration (months)
A Plan Seminar Content - 2
B Obtain acceptance of speakers / participants A 1
C Select seminar venue - 1
D Prepare and mail invitations B, C 2
E Accept reservations D 1
F Keep material ready B 2
G Notify press E, F 1/2

Example 5

Activity Duration EST EFT LST LFT TF FF

0–1 1 0 1 0 1 0 0
1–2 4 1 5 3 7 2 0
1–3 5 1 6 1 6 0 0
2–4 3 5 8 8 11 3 0
2–5 1.5 5 6.5 7 8.5 2 0
3–4 1.5 6 7.5 9.5 11 3.5 0.5
3–6 3.5 6 9.5 6 9.5 0 0
4–7 2.5 8 10.5 11 13.5 3 3
5–6 1 6.5 7.5 8.5 9.5 2 2
6-7 4 9.5 13.5 9.5 13.5 0 0

Example 6

Preceding Estimated activity

Activity
Activity duration (months)
A - 5
B A 4
C A 7
D B 6
E BC 6
F C 5
G DEF 7

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Example 7

Activity Details EST LST EFT LFT TF

1–2 8 0 0 8 8 0
1–3 8 0 9 8 17 9
1–4 10 0 8 10 18 8
2–4 10 8 8 18 18 0
2–6 16 8 28 24 44 20
3–5 18 8 17 26 35 9
3–6 14 8 30 22 44 22
4–5 17 18 18 35 35 0
5–6 9 35 35 44 44 0

Example 8

Activity Details EST LST EFT LFT TF FF Ind. F Int. F

1–2 2 0 0 2 2 0 0 0 0
2–3 8 2 8 10 16 6 0 0 6
2–4 10 2 2 12 12 0 0 0 0
3–5 6 10 16 16 22 6 0 -6 6
3–6 3 10 22 13 25 12 0 -6 12
4–5 3 12 19 15 22 7 1 1 6
4–7 7 12 12 19 19 0 0 0 0
5–8 5 16 22 21 27 6 6 0 0
6–8 2 13 25 15 27 12 12 0 0
7–8 8 19 19 27 27 0 0 0 0

Example 9

Activity Details EST LST EFT LFT TF FF Ind. F Int. F

1–2 8 0 0 8 8 0 0 0 0
1–3 10 0 2 10 12 2 2 2 0
2–3 4 8 8 12 12 0 0 0 0
2–4 0 8 17 8 17 9 9 9 0
3–4 5 12 12 17 17 0 0 0 0
3–5 6 12 15 18 21 3 3 3 0
4–5 4 17 17 21 21 0 0 0 0
4–8 8 17 24 25 32 7 7 7 0
5–6 5 21 21 26 26 0 0 0 0
5–7 7 21 22 28 29 1 1 1 0
6–7 3 26 26 29 29 0 0 0 0
6–8 5 26 27 31 32 1 1 1 0
7–8 3 29 29 32 32 0 0 0 0

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Example 10

Activity NT (weeks) CT (weeks) Normal Cost Crash Cost Incremental Cost (weekly)
1–2 1 1 5000 5000 -
2–3 3 2 5000 12000 7000
2–4 7 4 11000 17000 2000
3–4 5 3 10000 12000 1000
3–5 8 6 8500 12500 2000
4–5 4 2 8500 16500 4000
5-6 1 1 5000 5000 -

Example 11

Normal Crash
Job Description Dur. Cost Dur. Cost
Days Rs. Days Rs.
A Lay foundation and build walls 5 3000 4 4000
B Tile roofing 6 1200 2 2000
C Install electricity 4 1000 3 1800
D Install plumbing 5 1200 3 2000
E Connect services to finish 3 1600 3 1600
a. Draw the network and identify the critical path
b. Crash the network fully to find out minimum duration
c. If indirect costs are Rs. 300 per day, determine time-cost trade-off for the project.

Example 12

Activity a m b NC CT CC
1–2 3 3.5 4.5 180 2.6 200
1–3 4 5 6 250 3 300
1–4 3.5 4.5 6 250 3.6 325
2–5 2 2.2 3.5 140 3.5 160
3–5 3 3.5 4.5 160 4.5 175
4–6 8 9 12.5 550 12.5 700
5–7 7.5 8.5 11.5 450 11.5 600
3–6 6 7.5 12 400 12 500
6–7 7.5 9 12.5 450 12.5 525

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Example 13

Time
Activity Predecessor
O M P
A - 4 6 8
B A 5 7 15
C A 4 8 12
D B 15 20 25
E B 10 18 26
F C 8 9 16
G E 4 8 12
H DF 1 2 3
I GH 6 7 8

1. Construct the arrow diagram, determine critical path and state the expected project completion
time
2. Determine the probability that the project will be completed in 55 days.
3. If the company wants to be 90% sure that the system will be installed by a certain due date, how
many days prior to that should it start the work?
4. Suppose the company agrees to install the computer system in 50 days, failing which it would pay
a penalty of Rs. 500 per day. What is the probability that a penalty, but not exceeding Rs. 2,000,
will be paid?

Example 14

Time
Activity Predecessor
O M P
A - 2 4 6
B - 6 6 6
C - 6 12 24
D A 2 5 8
E A 11 14 23
F BD 8 10 12
G BD 3 6 9
H CF 9 15 27
I E 4 10 16

1. What is the expected project duration and its variance?

2. What is the probability of completing the project one week before the expected time?
3. If the project is required to be completed by December 31 of a given year and the manager wants
to be 95% sure of meeting the deadline, when should he start the project work?
4. A penalty of Rs. 15,000 per week is to be imposed on the contractor if the project is not completed
in 36 weeks. What is the probability that he has to pay a penalty? A penalty of Rs. 45,000?

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Example 15

Patel Machinery Co. has been offered a contract to build and deliver nine extruding presses to the Aayesha
Bottling Co. The contract price is contingent on meeting a specified delivery time, a bonus being given for
early delivery. The marketing department has established the following cost and time information:

Normal Time (Weeks)

Activity Cost (Rs.) Crash Time (weeks) Crash Cost
A B M
1-2 1 5 3 15000 1 19000
2-3 1 7 4 18000 3 24000
2-4 1 5 3 14000 2 16000
2-5 5 11 8 15000 7 16000
3-6 2 6 4 13000 2 15000
4-6 5 7 6 12000 4 13600
5-7 4 6 5 20000 4 24000
6-7 1 5 3 17000 1 20600

The normal delivery time is 16 weeks for a contract price of 1,24,000. Based on the calculated profitability
for each of the following specified delivery time, recommend the delivery schedule that the Patel
Machinery Co. should follow.

Contract delivery time (weeks) Contract amount (Rs.)

15 142500
14 145000
13 150000
12 152500

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Example 16
A construction company is preparing a PERT network for laying the foundation of an art house. Given the
following set of activities, their predecessor requirements and three time estimates of completion time:
Time estimates (week)
Activity Predecessor
Optimistic Pessimistic Most likely
A - 2 4 3
B - 8 8 8
C A 7 11 9
D B 6 6 6
E C 9 11 10
F C 10 18 14
G C, D 11 11 11
H F, G 6 14 10
I E 4 6 5
J I 3 5 4
K H 1 1 1
a) Draw the PERT network
b) Compute the slack for each activity and determine the critical path
c) The contract specifies a Rs. 2,500 per week penalty for each week the completion of the project
extends beyond 37 weeks. What is the probability that this company will have to pay maximum
penalty of Rs 10,000?

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Example 17

Deepu Products Corporation has just started developing a new product for the domestic market. The
marketing department realizes that the first firm to market this new product will benefit greatly during its
introductory phase. In fact, a survey by its marketing staff indicates that high profits will be made during
the first weeks of sale. For this reason, two other firms are currently developing a similar product. Trade
sources reveal that Deepu Products Corporation and these two competitors will introduce the product on
almost the same time, i.e. approximately six months hence.

Further discussion with the marketing staff indicates that additional profits are available to the firm during
the first six weeks if it is able to market the product ahead of its competitors. Specifically, the extra profits
for this period are attributed to a higher selling price and is estimated to be Rs. 45,000. Based on this fact,
the OR section was given the following data:

Activity Time Total Activity Costs

Time estimates (weeks)
(weeks) (Rs.)
Activity Incremental
a M b NT CT NC CC Costs
(weekly)
1–2 2 3 4 3 2 2000 4500 2500
1–3 4 5 12 6 5 2000 5000 3000
4 9000 4000
2–4 5 6 7 6 5 4000 9000 5000
2–5 7 9 17 10 8 9500 12000 1250
7 15000 3000
3–7 6 9 12 9 8 7000 8000 1000
7 10500 2500
3–8 7 10 13 10 8 9500 12000 1250
7 15000 3000
4–6 3 6 9 6 5 3500 400 500
5–9 5 6 7 6 4 2000 4000 1000
3 7000 3000
6 – 11 5 6 13 7 6 3000 4000 1000
5 8000 4000
7 – 10 Dummy
8 – 10 2 5 8 5 4 3500 4000 500
2 8000 2000
9 – 11 Dummy
10 – 12 4 6 8 6 3 6000 10000 1333
11 – 12 4 5 6 5 4 2000 4000 2000
12 – 13 1 2 3 2 1 2500 4000 1500

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Example 18

Normal Crash
Activity
Time Cost Time Cost
1-2 3 300 2 400
2-3 3 30 3 30
2-4 7 420 5 580
2-5 9 720 7 810
3-5 5 250 4 300
4-5 0 0 0 0
5-6 6 320 4 410
6-7 4 400 3 470
6-8 13 780 10 900
7-8 10 1000 9 1200

Crash the relevant activities systematically and determine the optimum project time and cost.

Example 19

The following table gives the various activities, their duration and direct costs. The indirect cost is Rs. 2000
per week. Find the optimum cost schedule using CPM technique.

Normal Crash
Activity
Time Cost Time Cost
1-2 8 3000 4 6000
1-3 5 4000 3 8000
2-4 9 4000 6 5500
3-5 7 2000 5 3200
2-5 5 8000 1 12000
4-6 3 10000 2.5 11200
5-6 6 4000 2 6800
6-7 10 6000 7 8700
5-7 9 4200 5 9000

Does your answer vary, if the objective is to minimize the project duration? In that case what is the cost
and duration?

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Example 20

Sharma International wishes to construct a guest house at its corporate headquarters, Nagpur. The
company awarded the contract to a Chaudhari Builders, who decided to user PERT approach to plan and
control the construction activity. The builder, therefore, divided this construction project into a number
of activities, the details of which are given in the following table. The time estimates calculated are on the
basis of three time estimates.

Activity Description Preceding Time estimates (weeks)

a m b
A Development of Site - 12 16 20
B Foundation with pillars A 9 9.5 13
C Crawl space plumbing B 1 1.5 2
D Furnace and air-conditioning B 1.5 2 2.5
E Water Heater C 1 1 4
F Walls, ceiling and rough roofing D 12 13.5 18
G Rough plumbing EF 5 6 7
H Rough wiring EF 3 3.75 6
I Heating and AC ducts EF 3 5 7
J Doors and windows F 2 3 4
K Exterior siding J 2 3 4
L Interior wall finishing GHI 7 10.5 11
M Finish roofing K 6 10.5 12
N Finish flooring L 5 5.5 9
P Plumbing and drainage GM 1.5 2 2.5
Q Kitchen and bathroom finishing N 2 2.5 6
R Finish carpentry N 4 4.5 8
S Finish painting QR 2 6 10
T Finish electrical and interior decoration S 2 3 4
W Landscaping P 2 4 6
X Handing over TW 0.5 0.5 0.5

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Example 21

Mr. Shravan, a Project Manager of Quick Construction company, is involved in drawing a PERT network
for laying the foundation of a new art museum named Murad Art Museum. The relevant information for
all the activities of this project is given in the table below:

Time estimates Normal cost for Immediate

Activity Crash Cost
A M B expected duration predecessors
A 2 3 4 6000 8000 -
B 4 5 6 12000 13500 A
C 3 5 7 16000 22000 A
D 2 4 6 8000 10000 A
E 1 2 3 6000 7500 C,D
F 1 3 5 14000 20000 B,E

i. Construct a PERT network for the project and determine the critical path and the expected
duration of the project.
ii. The Director of the company is not impressed by your PERT analysis. He draws your attention
that the project must be completed by seven weeks and refers to the penalty clause in the
agreement which provides for payment of penalty at the rate of Rs. 2500 for every week or
part there of exceeding seven weeks. Your Director also strongly believes that the time
duration of various activities of the project can be crashed to their optimistic time estimates
with the crashing costs mentioned in the above table. Determine the optimum duration of
the project if your objective is to minimize the sum of the project execution cost and the
penalty cost.

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Example 22

A list of activities along with their precedence requirement, normal time and cost and crash time and cost
are given in the table below:

Activity Predecessor NT NC CT CC
A - 4 300 2 450
B A 9 600 5 960
C A 6 620 4 780
D B 4 320 3 395
E BD 6 1440 3 1980
F CD 4 350 2 470
G EF 3 270 2 335

I. What are the normal and crash costs and durations of the project? How many days will be
saved and what will be the project cost if all the activities are crashed to the maximum
possible extent? It is expected that earlier completion of the project will result in additional
profit of Rs. 50 per day. The indirect cost is Rs. 80 per day.
II. Analyse the project for the optimum duration cost.

Example 23

Following table gives the activities in a construction project and other relevant information.

Activity Predecessor Normal Time Crash Time Normal Cost Crash Cost
A - 4 3 60 90
B - 6 4 150 250
C - 2 1 38 60
D A 5 3 150 250
E C 2 2 100 100
F A 7 5 115 175
G DBE 4 2 100 240

Indirect costs vary as follows:

Days 15 14 13 12 11 10 9 8 7 6
Cost 600 500 400 250 175 100 75 50 35 25

i. Determine the project duration which will return in minimum total project cost.

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Example 24

Activity (I – j) Time estimates (weeks)

Predecessor event i Successor event j a m b
10 20 6 9 12
10 50 4 7 8
20 30 14 17 20
20 40 7 10 13
20 50 3 5 9
30 70 13 18 25
40 60 10 14 16
40 70 12 15 18
50 60 9 11 12
60 70 17 20 25

Example 25

Time estimates (weeks)

Activity
a m b
1–2 1 1 7
1–3 1 4 7
1–4 2 2 8
2–5 1 1 1
3–5 2 5 14
4–6 2 5 8
5–6 3 6 15

a. Draw the network and identify all the paths through it

b. Determine the expected project length
c. What is the probability that the project will be completed:
a. At least 4 weeks earlier than expected time
b. No more than 4 weeks later than expected time
d. If the project due date is 19 weeks, what is the probability of not meeting the due date?
e. The probability that the project will be completed on schedule if the scheduled completion time
is 20 weeks
f. What should be the scheduled completion time for the probability of completion to be 90%?

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Example 26

A civil engineering firm has to bid for the construction of a dam. The activities and their time estimates
are given below:

Time estimates (weeks)

Activity (I – j)
a m b
1–2 14 17 25
2–3 14 18 21
2–4 13 15 18
2–8 16 19 28
3–4 0 0 0
3–5 15 18 27
4–6 13 17 21
5–7 0 0 0
5–9 14 18 20
6–7 0 0 0
6–8 0 0 0
7–9 16 20 41
8–9 14 16 22

The policy of the firm with respect to submitting bids is to bid the minimum amount that will provide a
95% of probability of at best breaking-even. The fixed costs for the project are eight lakhs and the variable
costs are 9000 every day spent working on the project. The duration is in days and the costs are in rupees.

What amount should the firm bid under this policy?

(You may perform the calculations on duration etc., upto two decimal places).

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Example 27

Duration
Activity
(days)
1–2 4
1–3 7
1–4 10
2–3 3
2–4 8
2–5 11
3–5 10
3–6 16
4–5 9
5–6 6
5–7 11
6–7 8

a. A mother notes that when her teenage son uses the telephone, he takes no less than 10 minutes
for a call and sometimes as much as one hour. Twenty-minute calls are more frequent than calls
of any other duration. If son’s phone call were an activity in a PERT project:
i. What would be the phone call’s expected duration?
ii. What would be its variance and SD?
iii. In scheduling the project, how much time would be allocated for the phone call?
b. For the project:
i. Calculate for each activity its EST, EFT, LST, LFT, TF and FF
ii. Identify the critical path
iii. If the project manager finds that either of the activities 3 – 6 and 4 – 5 can each be
speeded up by two days at the same cost, which of the two activities should be speeded
up? Explain.
c. Assuming that the time estimates in days indicated in the table above represent the expected
duration based on three time estimates and suppose the variance along the critical path is 81
days, what is the probability that the project will be completed within 33 days? Within 44 days?

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Example 28
A publisher is preparing to produce the second edition of a popular textbook. The activities required and
their estimated times are given as follows:

Immediately Time estimates

Activity Description preceding (Months)
activities O M P
A Assess Market - 1 2 3
B Get review from users of first edition A 1 1.5 2
C Revamp old material and add new material B 3 5 9
D Obtain reviews and prepare final draft C 4 6 1
E Revise and expand problems B 2 4 7
F Copyedit final draft D 1 1.5 2.5
G Copyedit problems E 0.5 1 1.5
H Typeset, proof and print book F, G 5 6 9
I Prepare instructor’s manual E 2 3 4
J Produce instructor’s manual I 1 1.5 2
K Completion of book and instructor’s manual H, J 0 0 0

Draw an arrow diagram and identify the critical path. What is the expected length of this project?
What is the probability that the project will be completed within 21 months? 24 months? 27 months?

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Example 29

A firm has 50 workers and one unit of each of machines M1, M2 and M3 available for carrying out a
project. The activities comprising the project, their duration and resource requirements are as follows:
Activity Duration
Node No. of workers Machines
description (No. of days)

A 1-2 5 30 M1

B 1-3 2 20 M2

C 1-4 5 30 M1, M3

D 2-6 6 20 M2

E 2-5 8 20 M1

F 3-5 3 20 M3

G 4-7 4 40 M2, M3

H 5-6 2 20 M2

I 6-7 3 20 M2

Allocate the resources to the various activities and determine the duration of the project.

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Rizvi Management Institutes Network Analysis

Example 30

Following is the network diagram of activities involved in a project, along with their expected completion
time:

a) Calculate for each activity, its early start, early finish, late start, late finish, total float and free
float.
b) Identify the critical path.
c) If the project manager finds that either of the activities 2 - 6 or 4 - 5 can be speeded up by two
days at the same cost, which of the two activities should be speeded up? Explain.
d) Assuming that the time estimates in days indicated in the above network represent the expected
duration based on three time estimates and suppose the variance along the critical path is 81
days, what is the probability that the project will be completed within 33 days? Within 44 days?

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Question Paper May 2018

A company is in assembly production and costs are wages of operation required.

Activity Preceding Activity NT (days) CT (days) Blenders Packers Filter

A - 4 3 3 - -
B - 3 3 1 - 1
C AB 3 2 - 2 1
D A 6 4 1 2 -
E CD 5 4 - 1 2
F AB 10 6 2 1 1
G EF 3 2 - - 2

The operators work for 8 hours / day. The Normal Wage rates for different skills are as below:

Blender : Rs. 250 / hr

Packer : Rs. 50 / hr

Filler : Rs. 200 / hr

The cost of manpower resource is assumed to be equally spread over entire duration for each activities.
The duration of each activity can be reduced by using equal number of operations having better skills.
Better skilled operators are paid at double the normal rate. The reduced duration of each activity is given
as Crash Time (CT). Determine normal Project Duration.

Determine what activities need to be crashed to reduce project duration by 2 days. Determine project
cost.

Mohammed Osaid Koti 20