Project Management

Techniques
|Faculty | Sushant Sharma |
SUSHANT SHARMA
Contents
Introduction-Proj ect Management
Project Scope Management
Work Breakdown Structure
Project Time Management
Gantt Chart
Cri ti cal Path Method &Floats
Precedence Network Analysi s
PERT (Program Evaluati on &Revi ew Technique)
Line of balance techni que
Time Crashing techni ques
Project Resource Management
Monitori ng & Control
- Earned Value Anal ysi s
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Project Management
Defining Project It is the group of inter-related activities executed in a
coordinatedway to achieve the project objectives.
Defining Management It is the efficient use of resources in set of known
processes
Project Management -It is the application of skills, knowledge, tools &techniques
to Project activities through application and integration of Project Management
Process Groups.
Characteristics of a Project
1. It has a definite beginning&definite end.
2. It creates a unique Product
3. Progressive Elaboration- Managing to a greater level of detail as project
evolves. (continuously improving and detailing a plan as more detailed and
specific informationandmore accurateestimates becomes available)
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Project Objective /Project Constraints
What, when and how much?
Aproject objective has Six dimensions:
What is to be achieved (Scope)
When it is to be achieved by (Schedule), and
What achieving it will cost (Budget),
What are the specifications (Quality),
What are the risks involved(Risk),
What are the resources required (Resources)
If any constraint is subjected to change then impact on others shall be
evaluated.
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Project Stakeholders
Whois a Stakeholder?
All individuals, groups and organizations directly involved
in the project or that may be affected by the project
activities and the project outcome
keystakeholder(lmp. Stage) - project manager
keystakeholder(across PLC) - end user
Understanding stakeholder needs critical for project
success
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Project Stakeholders
Astakeholder couldbe:
Passively involved in the project
Actively involved in the project work and
project outcome
Negative about the project and opposedto it
A Stakeholder
can help or hinder the project
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Project Stakeholders
Key Stakeholders are:
Project Manager - is overall responsible to ensure project
meets it's goals and objectives
Project Sponsor - represents top management. Is
responsible to ensure funds available and to provide
overall, high level guidance to project
Team Members - performthe work. At core of success
Customer / Client - individual /group /organization that will
use the deliverables. Can have one or many
Performi ng organizati on - employs the people engaged
inproject work. Internal project or external project
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Project Definition Document and/or
Business Case
Project Plan
Project Schedule
Project Budget
Project Manual
Status Reports
Risk, Issue, and Change Logs
Updated Plans, Schedules, Budgets
Final Acceptance Document
Lessons Learned Document
Project Archives
Four Phase Project Lifecycle
Close Implement Plan Define
Propose a project to senior management
with a brief written document to establish a
shared understanding of the proposal before
writing a Plan, Schedule,
and Budget
Propose a project in more detail, and
outline a clear approach for executing the
project in a Plan, Schedule, and Budget
Do the work described in the Project Plan,
aligned with the Schedule and Budget
Shut down the project in a controlled
manner
Is this the right project?
What results should it achieve?
How will success be measured?
How will the project achieve its
objectives?
When will the project finish?
Who will do what?
What will it cost?
How will risks/issues be managed?
How is project work progressing?
What issues and risks does the project
face, and how should these be
managed?
How much is the project actually
costing?
Is the work of the project complete?
Did the project achieve its
results/outcomes?
What did the teamlearn that could
help other projects?
Where do project staff go next?
Understand stakeholder interests
and expectations
Establish a shared high-level
understanding of the proposed
project and its intended results
Thoroughly plan the project
activities, schedule, and resource
requirements
Provide more detailed information to
senior management for discussion and
approval
Mobilize the team to execute the
Project Plan
Control the execution of the Project
Plan
Communicate with stakeholders
Report project status
Update the Project Plan, Schedule,
Budget, and Business Case as needed
Demonstrate that the project is
complete
Assess the success of the project
Undertake administrative close-out
Transfer knowledge to the permanent
organization
Support departing staff
When your Project Definition Document
and/or Business Case are approved by
senior management, move to the Plan
Phase
When your Project Plan, Schedule, and
Budget are approved by senior management,
move to the Implement Phase
As project deliverables near completion,
move to the Close Phase
When this phase is complete, the project
is finished
Moving to the Next Phase
Key Purpose
Key Questions
Key Deliverables
Key Activities
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Project Management Processes
Initiating
Planning
Execution
Monitoring &Control
Closing
3 Important Project Management Functions:
Planning determine what needs to be done
Scheduling decide when to do activities
Controlling see that its done right
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Knowledge Area
Project Management Process Groups
Initi ati ng Process
Group
Pl anning Process
Group
Executi ng Process
Group
Monitoring &
Controlling Process
Group
Closing Process
Group
1. Project Integration
Management
Develop Project Charter Develop Project
Management Plan
Direct and Manage
Project Execution
Monitor and Control
Project work
Perform Integrated
Change Control
Close Project of
Phase
2. ProjectScope Management Collect Requirements
DefineScope
Create WBS
VerifyScope
Control Scope
3. ProjectTime Management DefineActivities
Sequence Activities
Estimate Activity
Resources
Estimate Activity
Durations
DevelopSchedule
Control Schedule
4. ProjectCost Management EstimateCosts
DetermineBudget
Control Costs
5. Project Quality Management PlanQuantity Perform Quality
Assurance
Perform Quality
Control
6. Project Human Resource
Management
Develop Human
Resource Plan
Acquire Project
Team
Develop Project
Team
Manage Project
Team
7. Project Communications
Management
IdentifyStakeholders PlanCommunications Distribute
information
Manage Stakeholder
Expectations
Report Performance
8. Project Risk Management Plan Risk Management
Identify Risks
Perform Qualitative Risk
Analysis
Perform Quantitative
Risk Analysis
Plan Risk Responses
Monitor and
Control Risks
9. Project Procurement
Management
PlanProcurements Conduct
Procurements
Administer
Procurement
Close Procurements
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PROJECT SCOPE MANAGEMENT
WORK BREAKDOWN
STRUCTURE
(From Huge Project to Manageable Tasks)
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Project Scope Management
Work Breakdown Structure
Tool for simplifyingproject objective
Tool for definingproject work (scope) in termof deliverables.
Decompositionof project components on basis of effort/ cost/ responsibility.
Different fromcontrol A/c.
Processes required ensuring that the project includes work required and only
the work required. It includes:
Collect Requirements
Define Scope
Create W.B.S
Verify W.B.S
Control W.B.S
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Task 1
Work Package 'X '
Activity 1
O peration 'P' O peration 'Q' O peration 'R'
Activity 2 Activity 3
Work Package 'Y '
Task 2 Task 3
Sub Project
A
Task 4 Task 5
Sub Project
B
Task 6 Task 7
Sub Project
C
Project
WBS Tree Structure
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Input Out put Table for WBS
Input Process Output
1. Project Scope Statement
2. O RGANIZARIO N
PRO CESS ASSETS
Policies & Procedures &
Templates for WBS.
1. Decomposition 1. WBS:
2. WBS Dictionary:
o Created by create WBS process
o Descriptions of work package & control accounts including:
a. Code of account identified
b. Description of work
c. Responsible organizations
d. Milestones
e. Associated schedule activities
f. Resources
g. Cost estimate
h. Quality requirement
i. Acceptation creation
j. Technical information
k. Contract information
3. Scope baseline components
o Project Scope Statement
o WBS
o WBS Dictionary
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No
Divide the project work scope in terms of
deliverables
Select a deliverable
Can adequate duration
estimate be determined for the
deliverable & can the work be
assigned to an Engineers/
Supervisors
Identify a constituent element using tangible &
verifiable outcome
Further divide the deliverable into work
packages & further into activity which can be
assigned to a Foreman and can be estimated
realistically
Does deliverables
accounts for 100%
scope & are all internal
external & project
management deliverable
has being included
Are all deliverables
accounted for ?
Draw WBS diagram
Communicate and take consent of stakeholders
No
No
Y es
Y es
Y es
Process of creati ng
a WBS
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Principles of WBS
1. The 100% Rule Proj ect Scope/Work Packages shall capture all the deli verabl es i nternal ,external
,interim in terms of works to be completed including proj ect Management.
2. The deli verabl es should be l ogical l y decomposed to the level that represents how they will be
produced (designed, purchased, subcontracted, and fabricated). The partiti oning of deli verabl es
from higher level with in the WBS to lower levels must be logically related.
3. Deli verabl es should be clearl y defi ned to eliminate dupli cation of effort within WBS elements,
across organizations, or between individuals responsible for completing the work.
4. Deli verabl es shoul d be li mi ted in size and definition for effecti ve control but not so small as to
make cost of control excessi ve and not so l arge as to make the item unmanageable or the ri sk
unacceptable.
5. The PM should structure the project work into WBS elements (work packages) that are:
Tangible - real objects that can be seen felt &sensed and are not imaginary, vague or elusive. Should be
definableandeasilyunderstoodbyproject participants.
Measurable canbe usedto measure progress in quantitativeterms usingstandardmeasurements.
Verifiable the specified measures should be verifiable by any agency at the time of delivery and
acceptance.
Manageable a meaningful unit of work where specific responsibility and authority can be assigned to a
responsibleindividual.
Estimatable duration can be estimated in time required to compete, and cost can be estimated in
resources requiredto complete.
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Independent minimuminterface with or dependence on other ongoing elements (i.e. assignable to a single
control account, andclearlydistinguishable fromother work packages).
Integratable integrates with other project work elements and with higher level cost estimates and schedules to
includethe entireproject.
Adoptable sufficiently flexible so the additions/ elimination of work scope can be readily accommodated in the
WBS.
6. Awork packageis a piecethat:
Canbe realisticallyandconfidentlyestimated
Cannot be logicallysubdividedfurther
Canbe completed quickly
Has a meaningful conclusionandis deliverable
Canbe completed without interruption(without the needfor more information) and
Will be outsourcedor contractedout.
There is a general 5% Rule that states that all and any Work Package should be about 5% of Project
duration.
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PO WER
PLANT
MISCELLANEO US
STRUCTURES
WATER SY STEM
CO NTRO L RO O M
BULDG
RO AD S
DRAINS
SEWERAGE
SY STEM
WATCH TO WER
PIPE CABLE
AND SUPPO RT
GALLERIES
SERVICE
BUILDING
CHIMNEY
TRANSFO RME
R Y ARD
FIRE
PRO TECTIO N
SY STEM
BO O STER PUMP
HO USE
FO AM PUMP
HO USE
STO RAGE TANK
DELGE VALVE
HO USING
HO SE HO USE
FIRE WATER
PUMP HO USE
CO O LING
WATER
SY STEM
CW DUCT
CW
CHANNELS
CW PUMP
HO USE
RAW WATER
PUMP
HO USE
INTAKE
STRUCTURE
ESP AREA
ESP
FO UNDATIO N
CO NTRO L
RO O M
SWITGEAR
RO O M
FUEL O IL UNIT
FO PUMP
HO USE
FO
PRESSURIN
G PUMP
FO TANK
UNLO ADING
TRENCH/PIT
O IL
SEPERATO R
PIT
MAIN
PO WER
HO USE
BUILDING
TURBINE
GENERATO R
BO ILER
FEED PUMP
CO NDENCE
R
DEMINERALIS
ED CO O LING
WATER UNIT
AUX ILARY
CO O LING
WATER
PUMP
HO USE
AIR WASHER
BUILDING
DIESEL
GENERATO R
SET
BUILDING
CPU
SERVICE
VESSEL
MACHINE
RO O M
CHP
MAINTANEN
CE BUILDING
REMO TE I/0
RO O M
BO ILER AREA
FD FAN
PA FANS
MILL
BUNKER
BO ILER
FO UNDATIO
N
BO TTAMASH
HO PPER
MACHINE
RO O M
PERMANENT
STO RE
PERMANENT
STO RE
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Gantt-charts
Gantt-charts/Bar charts can be considered as
tools for portraying a project plan.
Gantt-Chart indicates the general sequence of
work tasks
It is an effective visual device showing the period
of commencement and duration of work in time
units of Days, Weeks or Months of a Y ear.
It indicates the status of progress as per the
schedule.
Left side of the Gantt- chart contains the sheet
viewand the right side the bar graph along a time
scale.
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Gantt Chart
Foundation
Framing
Plumbing
Electrical
Siding
Wall Board
Paint Interior
Paint Exterior
Fixtures
Activity
Start 5 10 15 20 25 30 35 40 45 50
Days After Start
Days After Start
Start 5 10 15 20 25 30 35 40 45 50
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Scheduling
A schedule is a conversion of a project action plan into an
operating timetable. In other words it shows the timing of
work elements and denote when specific events and
milestones take place.
As such it serves as the basis for allocation of resources,
cost estimation and project performance and thus the basis
of monitoring and controllingproject activity. Taken together
with plan and budget, it probably is the major tool for
management of projects.
ActivityBased Scheduling(Critical Path)
LocationBased Scheduling(Line of Balance)
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Schematic display of the logical relationships of
project activities. Also referredto as a PERT chart..
Time
Correct sequence of activities and events.
Graphical portrayal of activities and event
Shows dependency relationships between tasks/activities
ina project
Clearly shows tasks that must precede (precedence) or
follow(succeeding) other tasks in a logical manner
Clear representation of plan a powerful tool for planning
and controllingproject.
NETWORK
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Example of Simple Network
Survey
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Example of Network
More Complex
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DEFINITION OF TERMS IN A NETWORK
Activity : : It represents the actual work planned as process
of doing something. any portions of project (tasks)
which required by project, uses up resource and
consumes time may involve labor, paper work,
contractual negotiations, machinery
operations Activity on Arrow (AO A) showed as
arrow, AO N Activityon Node
Event : beginningor endingpoints of one or more
activities, instantaneous point in time, also called
nodes
Network : Combinationof all project activities andthe events
ACTIVITY
PRECEEDING
SUCCESSOR
EVENT
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Emphasis on Logic in Network Construction
Construction of network should be based on logical or technical
dependencies among activities
Example - before activity Approve Drawing can be started the
activity Prepare Drawing must be completed
Common error build network on the basis of time logic (a feeling for
proper sequence ) see example below
WRONG !!!
CORRECT
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Example 1- A simple network
Consider the list of four activities for making a simple product:
Activity Description Immedi ate
predecessors
A Buy Plastic Body -
B Design Component -
C Make Component B
D Assemble product A,C
Immediate predecessors for a particular activity are the activities
that, when completed, enable the start of the activityin question.
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Sequence of activities
Can start work on activities A and B anytime, since
neither of these activities depends upon the
completionof prior activities.
Activity C cannot be started until activity B has been
completed
Activity D cannot be started until both activities A and
C have beencompleted.
The graphical representation (next slide) is referred to
as the PERT/CPMnetwork
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Network of Four Activities
1 3 4
2
A
B
C
D
Arcs indicate project activities
Nodes correspond to the beginning
and ending of activities
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Example 2
Develop the network for a project with following activities and
immediate predecessors:
Activity Immediate
predecessors
A -
B -
C B
D A, C
E C
F C
G D,E,F
Try to do for the first five (A,B,C,D,E) activities
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Network of first five activities
1 3 4
2
A
B
C
D
5
E
We need to introduce
a dummy activity
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Note how the network correctly identifies D, E, and F as the
immediate predecessors for activity G.
Dummy activities is used to identify precedence relationships
correctly and to eliminate possible confusion of two or more
activities having the same starting and ending nodes
Dummy activities have no resources (time, labor, machinery, etc)
purpose is to PRESERVE LO GIC of the network
Network of Seven Activities
1 3 4
2
A
B
C
D
5
E
7
6
F
G
dummy
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EXAMPLES OF THE USE OF DUMMY ACTIVITY
Dummy
RIGHT
1
1
2
Activity c not
required for e
a
b
c
d
e
a
b
c
d
e
WRONG
!!!
RIGHT

Network concurrent activities

1 2 1
2
3
a
WRONG!!!
a
b
b
WRONG !
RIGHT
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1
1
2
2
3
3
4
a d
b e
c f
a d
b
e
f c
WRO NG!!! RIGHT!!!
a precedes d.
a and b precede e,
b and c precede f (a does not precede f)
Dummy Activity is used to provide a logical link to maintain the correct relationship of activities.
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Scheduling with activity time
Activity Immediate Completion
predecessors Time
(week)
A - 5
B - 6
C A 4
D A 3
E A 1
F E 4
G D,F 14
H B,C 12
I G,H 2
Total 51
This information indicates that the total time required to complete activities
is 51 weeks. However, we can see fromthe network that several of the
activities can be conductedsimultaneously(AandB, for example).
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Earliest start & earliest finish time
We are interested in the longest paththrough the network,
i.e., the critical path.
Starting at the networks origin (node 1) and using a
starting time of 0, we compute an earliest start (ES) and
earliest finish (EF) time for eachactivity in the network.
The expression EF = ES + t can be used to find the
earliest finish time for a given activity.
For example, for activity A, ES =0 and t =5; thus the
earliest finish time for activityAis
EF =0 +5 =5
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Arc with ES & EF time
1
2
Activity
ES =earliest start time
EF =earliest finish time
t =expected activity
time
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Network with ES & EF time
1
3
4
2
5
7
6
D[5,8]
3
Earliest start time rule:
The earliest start time for an activity leaving a particular node is equal to
the largest of the earliest finishtimes for all activities enteringthe node.
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Activity, duration, ES, EF, LS, LF
2
3
Activity
ES =earliest start time
EF =earliest finish time
LF =latest finish time
LS =latest start time
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To find the critical path we need a backward pass calculation.
Starting at the completion point (node 7) and using a latest
finish time (LF) of 26 for activity I, we trace back through the
network computing a latest start (LS) and latest finish time for
each activity
The expression LS = LF t can be used to calculate latest start
time for each activity. For example, for activity I, LF =26 and t =
2, thus the latest start time for activity I is
LS =26 2 =24
Latest start & latest finish time
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Network with LS & LF time
1
3
4
2
5
7
6
D[5,8]
3[7,10]
Latest finishtime rule:
The latest finish time for an activity entering a particular node is equal to
the smallest of the latest start times for all activities leavingthe node.
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Slack or Free Time or Float
Slack is the length of time an activity can be delayed without affecting the
completion date for the entire project.
For example, slack for C =3 weeks, i.eActivity C can be delayed up to 3
weeks
(start anywhere between weeks 5 and 8).
ES
5
LS
8
EF
9
LF-EF =12 9 =3
LS-ES =8 5 =3
LF-ES-t =12-5-4 =3
EF
12
2
3
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Activity schedule for our example
Activity Earliest
start (ES)
Latest
start (LS)
Earliest
finish (EF)
Latest
finish (LF)
Slack
(LS-ES)
Critical
path
A 0 0 5 5 0 Y es
B 0 6 6 12 6
C 5 8 9 12 3
D 5 7 8 10 2
E 5 5 6 6 0 Y es
F 6 6 10 10 0 Y es
G 10 10 24 24 0 Y es
H 9 12 21 24 3
I 24 24 26 26 0 Y es
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IMPORTANT QUESTIONS
What is the total time to complete the project?
26 weeks if the individual activities are completed on schedule.
What are the scheduled start and completion times for each activity?
ES, EF, LS, LF are given for each activity.
What activities are critical and must be completed as scheduled in order
to keep the project on time?
Critical path activities: A, E, F, G, and I.
How long can non-critical activities be delayed before they cause a
delay in the projects completion time
Slack time available for all activities are given.
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Importance of Float (Slack) and
Critical Path
1. Slack or Float shows how much allowance each activity
has, i.e. how long it can be delayed without affecting
completiondate of project
2. Critical path is a sequence of activities fromstart to finish
with zero slack. Critical activities are activities on the
critical path.
3. Critical path identifies the minimum time to complete
project
4. If any activity on the critical path is shortened or extended,
project time will be shortened or extended accordingly
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5. So, a lot of effort should be put in trying to control activities along this
path, so that project can meet due date. If any activity is lengthened,
be aware that project will not meet deadline and some action needs
to be taken.
6. If can spend resources to speed up some activity, do so only for
critical activities.
7. Dont waste resources on non-critical activity, it will not shorten the
project time.
8. If resources can be saved by lengthening some activities, do so for
non-critical activities, up to limit of float.
9. Total Float belongs to the path
Importance of Float (Slack) and Critical
Path (cont)
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Calculation of ES, EF, LF, LS, and Slack
GOING FORWARD
ES =Maximum of EFs for all predecessors
EF =ES +t
GOING BACKWARD
LF =Minimum of LS for all successors
LS =LF t
Slack =LS ES = LF EF
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Precedence Network Analysis
(PNA/PDM/AON)
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Precedence Network Analysis
Elements of PNA Network
A rectangular or a square box represents each activity in
a Precedence Network (PN).
The boxes portray activitiesonnodes, unlike the
CPM/PERT networks, which show activitieson
arrows.
The time duration of the activity is incorporated inside
the nodal box
The logic relationship in a PN is shown by connecting
the activity nodes with lines drawn fromthe preceding
activity
The procedure for drawing a PN is similar to that of
drawing a CPM, but its model presents a different look.
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Network logic/Activity Relationships/Task
Dependencies - Generally, the extreme left vertical side of
the activity box marks the start of the activity and the
extreme right, its completion. The connecting lines show
the relationship among the various activities. Connecting
them with lines indicates the logic between the activities.
The length of these lines has no significance. Generally,
they move fromleft to right. Arrowheads are not necessary.
A PN can represent four types of precedence relationships.
See the figure given below. These are:
FinishtoStart.
StarttoStart.
StarttoFinish.
Finish-to-Finish.
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Types of Precedence
Relationships
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Rel ati onshi ps are always defined from a preceding activity to its
successor activity.
Lag means the delay fromstart or finish of an activity to its successor. It
can be specified in positive or negative time units. Lead implies a
negative lag.
Duration estimation. PNA uses the onetime estimate for activity
duration estimation. The threetime estimate of activities can also be
used in a PN. In such cases, the analysis of the network is carried out by
reducing the threetimes estimate to a single expected time and then
proceeding in a manner similar to the PERT.
Activity numbering The activity numbering methodology is similar to the
CPM. Numbering commences fromthe start activity and finishes with the
last one. It is a standard practice to number the activities after the
network model is finalized.
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Preparation
of
PNA networks
(examples)
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Total Float:
If the start of activates either E or F is delayed by3 days or if the start of activity H is delayed by 9days instead of starting themat their
respective ESTs. It will correspondingly delaythe finish of those activities by equivalent amounts, but these delays will not result in any
delayin project completiontime.
Therefore, activities E, F and H are said to have a Float. Particularly, the allowable delay in starting or finishing of an activity that is
calculatedbythedifferencebetweentheir respectiveEST andLST or EFT andLFT is known as theTotal Float.
Total floatthereforeindicates theamountof flexibilityavailable inperforminganactivitywithout affectingtheproject completiondate.
It is also seen that an activity having float can be started at its EST and can be finished at its LFT without delaying the completion date
for the project. Therefore the difference between LFT and EST for an activity is the total time available for its performance. Since
estimated duration gives the minimumtime required to performthe given activity, the Total Float can also be said to be equal to the
differencebetweentime available andtime requiredto performanactivity. Therefore
Total Float (TF) for Activity = LST EST for an Activity
LFT EFT for an Activity
LFT EST Estimated Duration
It canbe thereforesaid thattheTotal Float for a Critical Activityis Zero.
Free Float:
Although the TF available for activities E and F are equal to 3 days, it can be seen that if starting and therefore finishing of activity E is
delayed by 3 days, activity F can not be started earlier than day 8, which happens to be the LST for activity F,. Hence in such case,
activity F is not left withanyfloat to its own. In fact anyamount of delayinstarting or finishing of E will result inequal reduction of TF for
activity F. in other words, use of flexibility in terms of Total Float by a preceding activity may affect the EST of its succeeding activity
andtheprecedingactivityis not ableto utilize its total floatfreelyfor itself.
However, if activity E finishes by its EFT, activity F can still finish by its LFT of 11 without affecting EST its successor activity G.
therefore activity F is said to have a Free Float of 3 days. Free Float therefore indicates the amount of float available to an activity
without affecting an Early Start of its successor activities. Free Float is always a part of the Total Float and its value can be minimum
zero andmaximumequal to TF.
Free Float (FF) for Activity = EST of Successor Activity EFT of the activity (When only one Successor)
= Earlier of EST for Successor activities EFT of the activity (When more than once
successors)
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1. Total float of an activity: The total activity float is equal to the difference between the earliest and latest allowable
start or finish times for the activity in question. Thus, for an activity (i-j), the total float is given by
TF
;j
=LST - EST or TF
ij
=LFT - EFT
In other words, it is the difference between the maximum time available for the activity the actual time it takes to
complete. Thus, total float indicates the amount of time by which the actual completion of an activity can exceed its
earliest expected completion time without causing any delay in the project duration.
2. Free Float: It is defined as that portion of the total float within which an activity can be manipulated without
affecting the float of the succeeding activities. // can determined subtracting the head event slack from the total float
of an activity.
i.e FF
ij
=TF
jj
- (slack of event j)
The free float indicates the value by which an activity in question can be delayed beyond the earliest starting point
without affecting the earliest start, and therefore, the total float the activities following it.
3. Independent float: It is defined as that portion of the total float within which an activ-ity can be delayed for start
without affecting float of the preceding activities. It is com-puted by subtracting the tail event slack from the free float
of an activity.
IF
ij
=FF
jj
- (slack of event i)
The independent float is always either equal to or less than the free float of an activity. If a negative value is obtained,
the independent float is taken to be zero .
4. Interfering float: Utilization of the float of an activity can affect the float of subse-quent activities in the network.
Thus, interfering float can be defined as that part of the total float which causes a reduction in the float of the
successor activities. In other words, can be defined as the difference between the latest finish time of the activity
under consideration and the earliest start time of the following activity, or zero, whichever is larger. Thus, interfering
float refers to that portion of the activity float which cannot be consumed without affecting adversely the float of the
subsequent activity or activities.
SUSHANT SHARMA
PROGRAM EVALUATION
AND REVIEW TECHNIQUE
- PERT
SUSHANT SHARMA
PERT For Dealing With Uncertainty
So far, times can be estimated with relative certainty, confidence
For many situations this is not possible, e.g Research,
development, newproducts and projects etc.
If the activity times are not known with certainty, PERT/CPM can
be used to calculate the probability that the project will complete
by time t.
For each activity, makethree time estimates:
O ptimistic time: o
Pessimistic time: p
Most-likely time: m
SUSHANT SHARMA
Beta Distribution
Assumpti on: The variability of the time estimates follows the
beta distribution.
Elapsed time
p
0
Beta distribution
m
o
SUSHANT SHARMA
PERT with Uncertain Activity
Durations
Goal: Calculate the probability that the project is
completedby time t.
Procedure:
1. Calculate the expected duration and variance for each
activity.
2. Calculate the expected length of each path. Determine
which path is the mean critical path.
3. Calculate the standard deviation of the mean critical path.
4. Find the probability that the mean critical path completes
bytime t.
SUSHANT SHARMA
Expected Duration and Variance for
Activities (Step #1)
The expected duration of eachactivity can be approximated as follows:
The variance of the duration for each activity can be approximated as
follows:
o
2
=
p o
6
|
\

|
.
|
2
=
o+ 4m+ p
6
SUSHANT SHARMA
Expected Length of Each Path (Step #2)
The expected length of each path is
equal to the sum of the expected
durations of all the activities on each
path.
The mean critical path is the path with
the longest expected length.
SUSHANT SHARMA
Standard Deviation of Mean Critical
Path (Step #3)
The variance of the length of the path is the
sumof the variances of all the activities on the
path.
s
2
path

all activities on path
s
2
The standard deviation of the length of the path
is the square root of the variance.
o
path
= o
path
2
SUSHANT SHARMA
Probability Mean-Critical Path
Completes by t (Step #4)
What is the probability that the mean critical path (with expected length t
path
and
standard deviations
path
) has duration t?
Use Normal Tables
z =
t (t
path
)
o
path
+o +2o +3o
o
2o 3o
Path duration
Probability
Density
Function
t
path
t
SUSHANT SHARMA
Example
START
0
FINISH
0
a
b
c
d
e
2 - 3 - 4
2 - 4 - 5 3 - 4 - 6
1 - 3 - 7 2 - 3 - 8
Question: What is the probability that the project will be finished by day 12?
SUSHANT SHARMA
Expected Duration and Variance of Activities
(Step #1)
Activity o m p
a 2 3 4 3.00
1
/
9
b 2 4 5 3.83
1
/
4
c 1 3 7 3.33 1
d 3 4 6 4.17
1
/
4
e 2 3 8 3.67 1
=
o+ 4m+ p
6
o
2
=
p o
6
|
\

|
.
|
2
SUSHANT SHARMA
Expected Length of Each Path
(Step #2)
Path Expected Length of Path
a - b - d 3.00 +3.83 +4.17 =11
a - c - e 3.00 +3.33 +3.67 =10
The mean-critical path is a - b - d.
SUSHANT SHARMA
Standard Deviation of Mean-Critical
Path (Step #3)
The variance of the length of the path is the sum of
the variances of all the activities on the path.
s
2
path
=
all activities on path
s
2
=
1
/
9
+
1
/
4
+
1
/
4
= 0.61
The standard deviation of the length of the path is
the square root of the variance.
o
path
= o
path
2
= 0.61= 0.78
SUSHANT SHARMA
Probability Mean-Critical Path Completes
by t=12 (Step #4)
The probability that the mean critical path (with expected length
11and standard deviation 0.71) has duration 12?
Then, fromNormal Table: Prob(Project 12) =Prob(z 1.41) =
0.92
z =
t (t
path
)
o
path
=
1211
0.71
=1.41
SUSHANT SHARMA
SUSHANT SHARMA
Reliable Construction Project Network
A
START
G
H
M
F
J
K L
N
Activity Code
A. Excavate
B. Foundation
C. Rough wall
D. Roof
E. Exterior plumbing
F. Interior plumbing
G. Exterior siding
H. Exterior painting
I. Electrical work
J . Wallboard
K. Flooring
L. Interior painting
M. Exterior fixtures
N. Interior fixtures
2
4
10
7
4 6
7
9
5
8
4 5
6
2
0
0
FINISH
D I E
C
B
SUSHANT SHARMA
Reliable Problem: Time Estimates
for Reliable Project
Activity o m p Mean Variance
A 1 2 3 2
1
/
9
B 2 3.5 8 4 1
C 6 9 18 10 4
D 4 5.5 10 6 1
E 1 4.5 5 4
4
/
9
F 4 4 10 5 1
G 5 6.5 11 7 1
H 5 8 17 9 4
I 3 7.5 9 7 1
J 3 9 9 8 1
K 4 4 4 4 0
L 1 5.5 7 5 1
M 1 2 3 2
1
/
9
N 5 5.5 9 6
4
/
9
SUSHANT SHARMA
Pessimistic Path Lengths for Reliable
Project
Path Pessimistic Length (Weeks)
StartAB C DG H MFinish 3 +8 +18 +10 +11 +17 +3 =70
Start AB C E H MFinish 3 +8 +18 +5 +17 +3 =54
Start AB C E F J K N Finish 3 +8 +18 +5 +10 +9 +4 +9 =66
Start AB C E F J L N Finish 3 +8 +18 +5 +10 +9 +7 +9 =69
Start AB C I J K N Finish 3 +8 +18 +9 +9 +4 +9 =60
Start AB C I J L N Finish 3 +8 +18 +9 +9 +7 +9 =63
SUSHANT SHARMA
Three Simplifying Approximations of
PERT/CPM
1. The mean critical path will turn out to be the longest path through the
project network.
2. The durations of the activities on the mean critical path are statistically
independent. Thus, the three estimates of the duration of an activity
would never change after learning the durations of some of the other
activities.
3. The formof the probability distribution of project duration is the normal
distribution. By using simplifying approximations 1 and 2, there is some
statistical theory (one version of the central limit theorem) that justifies
this as being a reasonable approximation if the number of activities on
the meancritical path is not too small.
SUSHANT SHARMA
Calculation of Project Mean and
Variance
Activi ties on Mean Criti cal
Path
Mean Variance
A 2
1
/
9
B 4 1
C 10 4
E 4
4
/
9
F 5 1
J 8 1
L 5 1
N 6
4
/
9
Project duration m
p
=44 s
2
p
=9
SUSHANT SHARMA
Spreadsheet for PERT Three-
Estimate Approach
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
B C D E F G H I J K
Time Estimates O n Mean
Activity o m p Critical Path
o
2
A 1 2 3 * 2 0.1111 Mean Critical
B 2 3.5 8 * 4 1 Path
C 6 9 18 * 10 4 = 44
D 4 5.5 10 6 1
o
2
=
9
E 1 4.5 5 * 4 0.4444
F 4 4 10 * 5 1 P(T<=d) = 0.8413
G 5 6.5 11 7 1 where
H 5 8 17 9 4 d = 47
I 3 7.5 9 7 1
J 3 9 9 * 8 1
K 4 4 4 4 0
L 1 5.5 7 * 5 1
M 1 2 3 2 0.1111
N 5 5.5 9 * 6 0.4444
SUSHANT SHARMA
Example -3 Precedence and Project Activity Times
Immediate O ptimistic Most Likely Pessimistic EX P Var S.Dev
Activity Predecessor Time Time Time TE V o
a - 10 22 22 20 4 2
b - 20 20 20 20 0 0
c - 4 10 16 10 4 2
d a 2 14 32 15 25 5
e b,c 8 8 20 10 4 2
f b,c 8 14 20 14 4 2
g b,c 4 4 4 4 0 0
h c 2 12 16 11 5.4 2.32
I g,h 6 16 38 18 28.4 5.33
j d,e 2 8 14 8 4 2
SUSHANT SHARMA
The complete network
2
6
1 3
7
4
5
a
(20,4)
d
(15,25)
e
(10,4)
f
(14,4)
j
(8,4)
i
(18,28.4)
g
(4,0)
h
(11,5.4)
c
(10,4)
b
(20,0)
SUSHANT SHARMA
Figure 8-13 The complete Network
2
6
1 3
7
4
5
b
(20,0)
d
(15,25)
e
(10,4)
f
(14,4)
j
(8,4)
i
(18,28.4)
g
(4,0)
h
(11,5.4)
c
(10,4)
CRIT. TIME =43
EF=20 35
43
24
10
20
a
(20,4)
SUSHANT SHARMA
Critical Path Analysis (PERT)
Activity LS ES Sl acks Critical ?
a 0 0 0 Yes
b 1 0 1
c 4 0 4
d 20 20 0 Yes
e 25 20 5
f 29 20 9
g 21 20 1
h 14 10 4
i 25 24 1
j 35 35 0 Yes
SUSHANT SHARMA
Assume, PMpromisedto complete the project in the fiftydays.
Whatare the chances of meetingthat deadline?
CalculateZ, where
Z = (D-S) / \V
Example,
D = 50; S(Scheduled date) = 20+15+8 =43; V = (4+25+4)
=33
Z = (50 43) / 5.745
= 1.22standarddeviations.
The probability value of Z = 1.22, is 0.888
1.22
SUSHANT SHARMA
What deadline are you 95% sure of meeting
Z value associated with 0.95 is 1.645
D =S +5.745 (1.645)
=43 +9.45
=52.45 days
Thus, there is a 95 percent chance of finishing the project by
52.45 days.
SUSHANT SHARMA
Comparison Between CPM and PERT
CPM PERT
1 Uses network, calculate float or slack, identify
critical path and activities, guides to monitor and
controlling project
Same as CPM
2 Uses one value of activity time Requires 3 estimates of activity time
Calculates mean and variance of time
3 Used where times can be estimated with
confidence, familiar activities
Used where times cannot be estimated with
confidence.
Unfamiliar or new activities
4 Minimizing cost is more important Meeting time target or estimating percent
completion is more important
5 Example: construction projects, building one off
machines, ships, etc
Example: Involving new activities or products,
research and development etc
SUSHANT SHARMA
Linear Scheduling Method
LINE OF BALANCE TECHNIQUE
SUSHANT SHARMA
Illustration (Line of BALANCE)
Prepare an LINE OF BALANCE for construction of Viaduct (segmental
Construction)of 3.3 kms with 30 m spans of 18 m carriageway width.
Project duration = 18 months
Foundation Bored CIS pi les of 1200mm di a 6 nos for each Pier location
Substructure-Pi le cap
Each span has 12 segments of 2.5 m width
Mini mum 28 days curing period to be considered for Gi rder segments
Launching to be done by Span by span erection using overhead Launching Girder
2 months for Fini shing Works to be provided.
SUSHANT SHARMA
SUSHANT SHARMA
SUSHANT SHARMA
Line of Balance is a Project Management technique in which the production is modeled in terms of time
and location indicating milestones for the project.
The LO B is based on the underlying assumption that the rate of production for an activity is uniform or
the production rate of the activity is linear where time is plotted on one axis , usually horizontal , and units
of stages of the activity on other axis .
The production rate of any activity is the slope of the production line and is expressed in terms of units per
time
It is primarily used for scheduling involving construction of a large number of repetitive works
such as similar
-Buildings and multistoried skyscrapers
-Linear type segmented works like roads
-Viaduct construction
-O il &Gas Pipeline projects
This is a visual scheduling technique that allows the planner to explicitly account for flow of project. It uses
lines in diagrams to represent different types of work performed by various functional. In LO B all critical
activities are presented in the departments that work on specific locations in a project.
Analysis consists of: (Timing of Activities)
Same activity on several locations at the same time
Activities cross and order of completion changes.
Several activities start/ or end at the same time.
Dependencies between tasks are missing or estimated wrong.
Synchronization means that all the activities have similar production rate.
Pacing means that the activities to continue from one location to another without interruptions.
SUSHANT SHARMA
1. Prepare a Work breakdown structure for the job
2. Prepare a macro schedule depicting major structures, start date and finish date based on the
backward planning. Provide suitable lags for hard logics and preliminary works
3.Prepare a logic diagram of a work cycle prepare a line of balance chart with time on X axis
and pier location on Y axis
4.Draw the LO B work schedule. Draw the LO B line for each work package /structure based on
progress rate. Tabulate the scheduling data of a work cycle.
5. Calculate the resource sets requirement and set the location-wise movements.
6. Checking the line of balance schedule
a) Choice of sections and order of completion match contracted plan and client requirements.
b )No free work points.
c )Margin allowed for disturbances.
DTime, inspection and certification.
Tasks paced and synchronized.
Labor availability at peak and in line with target.
Concrete hardening time and contractual constraints taken into consideration
Steps for conducting Line of Bal ance Techni que
Sno Structure Scope Noof months Progress rate Resources
required
1 Piling
Pile cap
Pier
Pier cap
S Segmentcasting
SegmentLaunching
SUSHANT SHARMA
RESOURCE ANALYSIS AND SCHEDULING
Ability to carry out projects depend on the availability
of resources
Analyze resource implication
-How requirements can be met and changes needed
Use resources efficiently
Use network to give information about time, resources
and cost
SUSHANT SHARMA
Activities D, E, F, G andH require fitters.
Construct a bar chart with activities at their EST indicating person required
andtotal float.
0 5 10 15 20
H
G
F
E
D
4 4 4 4 4 4 4 4 4 4 4 4
2 2 2 2
2 2
2 2 2 2 2 2
2 2 2 2 2 2 2 2
Time
A
c
t
i
v
i
t
y
Addupacross all activities to get the total number of men required.
SUSHANT SHARMA
Convert the bar chart to a histogram
Shows: i) Variation from week to week (fitters)
ii) Maximum number of person required (12) during
week 5-6
Examine resource implication.
0 5 10 15 20
1
2
3
4
5
6
7
8
9
10
11
12
13
14
T
o
t
a
l

n
u
m
b
e
r

o
f

m
a
n

r
e
q
u
i
r
e
d
Time
Resource analysis before scheduling
SUSHANT SHARMA
Example
If only 8 fitters are available at any period during the projects:
New bar chart:
0 5 10 15 20
H
G
F
E
D
4 4 4 4 4 4 4 4 4 4 4 4
2 2 2 2
2 2
2 2 2 2 2 2
2 2 2 2 2 2 2 2
Time
A
c
t
i
v
i
t
y
SUSHANT SHARMA
SUSHANT SHARMA
Additional Restriction no fitters available until the end of
week 5.
Revised Schedule:
0 5 10 15 20
H
G
F
E
D
4 4 4 4 4 4 4 4 4 4 4 4
2 2 2 2
2 2
2 2 2 2 2 2
2 2 2 2 2 2 2 2
Time
A
c
t
i
v
i
t
y
Resource constraints relates to:
1. Variations in resource requirements
2. Resource availability
Smaller variations:
1. Easier control of the job
2. Better utilizationof resources
Bigvariations:
1. Frequent moving of manpower
2. Require close control
3. Affect efficiency
SUSHANT SHARMA
0 1
Time
T
o
t
a
l

n
u
m
b
e
r

o
f

m
a
n

r
e
q
u
i
r
e
d
Histogram showing large resource variations
SUSHANT SHARMA
RESOURCE LEVELLING
It is also a network techniquewhich is usedfor reducingthe requirementof a particular resourcedue to its paucity.
The process of resource leveling utilize the large floats avail-able on non-critical activities of the project and thus cuts down
thedemand onthe re-source.
In resource leveling, the maximumdemand of a resource should not exceed the available limit at any point of time. In order
to achieve this, non critical activities are re-scheduled by utilizing their floats. Some times, the use of resource leveling may
lead to prolonging the completion time of the project. In other words, in resource leveling, con-straint is on the limit of the
resourceavailability.
RESOURCE SMOOTHING
It is a network technique used for smoothening peak resource requirement during periods of the project network.
Under this technique the total project duration is maintained at the minimum level. For example, if the duration of a project is
15 days, then the project duration is maintained, but the resources required for completing different activities of a project are
smoothened by utilizing floats available on non critical activities.
These non critical activities having floats are rescheduled or shifted so that a uniform demand on resources is achieved. In
other words, the constraint in the case of resource smoothing operation would be on the project duration time. Resource
smoothing is a useful technique or business managers to estimate the total resource requirements for various project activities.
In resources smoothing, the time-scaled diagram of various activities and their floats (if any), along with resource requirements
are used. The periods of maximum demand for resources are identified and non critical activities during these periods are
staggered by rescheduling them according to their floats for balancing the resource requirements
SUSHANT SHARMA
PROJECT TIME CRASHING
SUSHANT SHARMA
Crashing Example
A
5
B 60
F 45
C 65
D 10
G 100
E
20
170
Critical activities AFGE
SUSHANT SHARMA
Crashing G by 20 days
A
5
B 60
F 45
C 65
D 10
G 80
E
20
150
Critical activities ABFCGE
SUSHANT SHARMA
Crashing E by 13 days
A
5
B 60
F 45
C 65
D 10
G 80
E
7
137
Critical activities ABFCGE
SUSHANT SHARMA
Crashing A by 3 days
A
2
B 60
F 45
C 65
D 10
G 80
E
7
134
Critical activities ABFCGE
SUSHANT SHARMA
Crashing B&G by 15 days
A
2
B 45
F 45
C 65
D 10
G 65
E
7
119
Critical activities ABFCGE
SUSHANT SHARMA
Crashing C&G by 10 days
A
2
B 45
F 45
C 55
D 10
G 55
E
7
109
Critical activities ABFCGE
SUSHANT SHARMA
Crashing C&F by 20 days
A
2
B 45
F 25
C 35
D 10
G 55
E
7
89
Critical activities ABFCGE
SUSHANT SHARMA
Purpose of Time Crashing
To meet the Managements need for the early completion of the
project with acceptable cost to be paid for gaining time.
To avoid delays which may attract heavy penalty or loss of goodwill.
To venture on other project.
To earn early bonus for early completion, if contractual.
To transfer the resources needed elsewhere.
To confirm to the resource availability schedule.
SUSHANT SHARMA
Methods of Compressing the Schedule
1. Increasing the work effort of Driving Resources.
2. By the application of time crashing techniques. wherein the duration is
reduced at the expense of cost by the use of Total floats.
3. Fast tracking a technique in which phases or activities normally
performedin sequence are preformedin parallel
4. Byaltering the Calendar's Workingdays
5. Byincreasing the no of working hrs per day
6. Byincreasing the no of driving resources
7. By altering the Work methodology (applying more mechanized
methods)
SUSHANT SHARMA
Schedule Compression
Shortening critical path activities
Shortening early activities
Shortening longest activities
Shortening easiest activities
Elimination of some parts of the project
Addition of more resources
Substitution of less time-consuming components or activities
SUSHANT SHARMA
Project Crashing
(Time cost trade off technique)
Crashing a project involves paying more money to complete a project more
quickly.
Since the critical path determines the length of a project, it makes sense to
reducethe lengthof activities on the critical path.
CP activities should be reduced until the project is reduced to the desired
lengthor youare payingmore per day thanyou save.
If youhave multiple CPs, they shouldbe shortenedsimultaneously.
Analyze cost &schedule tradeoffs to determine howto obtain the greatest
amount of compressionfor the least incremental cost.
SUSHANT SHARMA
Time Cost Trade off Technique
The difference between the =(normal time and crash time of an
activity indicates its potential to undergo crashing . The slope of the
activity cost function shows the rate of increase of cost , with the
reduction in time for the activity.
Crashing potential /Compression Potential = Normal time-Crash
time
Rate of crashing = (Crash cost-Normal cost )
(Normal Time CrashTime)
Where: slope = cost per day of crashing a project
When slope is negative : indicate the time required for a project is
decreased, the cost is increased
SUSHANT SHARMA
Procedure for performing
Time crashing
Time analyze the network &determine the critical path
Tabulate normal and crash duration and normal &crash cost
for all the activities.
Estimate activity crashingpotential for eachactivity.
Determine the rate of crashing of all activities.
Crash activities beginning with the activity having least rate
of crashing .Each activity is shortened until its crashing
potential is exhausted , or a newcritical path is found.
If a new critical path is formed, reduce the combination of
critical activities having the combined lowest rate of crashing
, and continue till there is no more scope of crashing .
At each crashing incorporates the cost implication in a table.
SUSHANT SHARMA
Which Activities are the Best
Candidates for Crashing?
Any activity that is on the critical path
Activities with relatively long durations
Bottleneck activities (that appear on multiple
critical paths)
Activities with relatively low costs to crash
Activities that are not likely to cause quality
problems if crashed
Critical Activity with least cost slope
Activities that occur relatively early in the schedule
and are labor intensive
SUSHANT SHARMA
Problem
A small project is having seven activities. The relevant data about these activities is given below:
Activity Dependence Normal Crash Normal Crash
Duration duration cost cost
(days) (days) Rs. Rs.
A -- 7 5 500 900
B A 4 2 400 600
C A 5 5 500 500
D A 6 4 800 1,000
E B,C 7 4 700 1,000
F C,D 5 2 800 1,400
G E,F 6 4 800 1,600
(i) Find out the normal duration and the minimum duration.
(ii) What is the percentage increase in cost to complete the project in 21 days?
SUSHANT SHARMA
SUSHANT SHARMA
Step 1: Various paths of the network are given below:
1.With duration =25 days
2.With duration =24 days
3.With duration =23 days
4.With duration =24 days
In order to determine the cost of completing the project in 21 days, let us crash that activity on the critical path, which
has minimum cost slope. It can be seen that the minimum cost slope of Rs.100 corresponds to activity E (4-6) and it
lies on the critical path. Hence, we crash activity E (4 6) by 1 day at an additional cost of Rs. 100.
Step- 2: Various paths now are:
1.With duration =24 days
2.With duration =23 days
3.With duration =23 days
4.With duration =24 days
An examination of the above four paths clearly points out that there are two critical paths namely 1-2-3-4-6-7 and 1-2-5-
6-7, each with duration =24 days. To reduce the project duration by three days more, there are following possible
combination of activities.
Crash activities 4-6 on the path 1-2-3-4-6-7 and 5-6 on the path 1-2-5-6-7 by one day each at an addition cost of Rs. 100
+Rs. 200=Rs. 300.
2. Crash activities 4-6 on path 1-2-3-4-6-7 and 2-5 on path 1-2-5-6-7 by one day each at an additional cost of Rs. 100
+Rs. 100=Rs. 200
3. Crashactivity1-2by one dayat anadditional cost of Rs. 200.
It can be observed that the additional cost of reducing the project duration by one day in combination 2 as well as
combination 3 is Rs. 200. Hence any of these two can be selected for crashing. However, since crashing activity 1-2 by
1 day reduces the duration of all the paths by1 day, we will crash it by I day. The project duration becomes =23 days at
anadditional cost =Rs. 200.
Step 3: Crashactivity1-2by 1 dayfurther, it wouldreducethe project durationto 22days at anadditional cost =Rs. 200.
Step 4: Activity 1-2 can not be crashed further. So, we nowselect the combination 2 stated above for crashing. Crash
activities 4-6and2-5by one dayeachat an additional cost of Rs. 100+Rs. 100=Rs. 200.
Hence, in order to complete the project in 21 days, an additional cost of Rs. 100 +Rs. 200 +Rs. 200 +Rs. 200 =Rs. 700
will be incurred.
The normal cot of completingthe project in 25days =Rs. 4,500.
Hence, the percentageincreaseincost to complete the project in21days = 100=15.5%.
100=15.5%.
500 , 4 .
700 .
Rs
Rs
SUSHANT SHARMA
PERT CPM
PRO GRAMEvaluation&ReviewTechnique Critical Path Method
Event O riented ActivityO riented
Activity on Arrow type diagrams are more suitable for
drawingnetwork
Activity on Node type diagrams are more suitable for
drawingnetwork
Time estimates are based on expert opinion due to lack of
past experienceonidentical tasks
Time estimates are based on past experience, data based
onpast experience, data base or manuals for similar activities
There is no direct relationship established between the
efforts spent onactivityandthe results obtained
Direct relationship is established between the efforts spent
andthe results obtained
Duration= Total Work
O utput per UnitTime x No. of Resources
Probabilistic estimates for activity duration assuming
uncertainty
Deterministic estimates for activity duration assuming
certainty
Uses three time estimates optimistic, most likely and
pessimistic to calculateaverage
Uses a singletime estimate
The Longest path duration in the network based on
average times indicates only 50% possibility of completing
project withinthat duration
Project duration is determined and delivery commitments
can be made on the basis of the longest path known as
Critical path
Activity crashing is not possible by putting additional
efforts, resources or funds
Activities can be crashed by putting additional efforts. Time
cost trade off can be achieved
Focus is on timely completion of various stages and the
project. The cost andbudget is givena secondaryimportance
Focus is completion of project on time and within the
budgetedcosts
progress review can be taken only at occurrence of an
event or completion of certain stage. Activity progress can not
be assessedat any interimstage.
Progress review is done periodically at fixed intervals.
Activity progress can be assessed and measured at any point
of time betweenits start andfinish
Applicable generally for research, product development &
projects of strategic importance to the organization
Applicable generally for engineering and commercial
projects
SUSHANT SHARMA
Project Control Process:
Project control provides the systems and procedures to track and control the projects scope, cost /Resources
,specifications, risk and schedule to support project managements objective of delivering a scope that meets project
requirements, within the budget and on schedule &specifications . Scope, cost/Resources , schedule, specifications ,risk
are interdependent on a project. For example a change that increases the project scope typically is associated with an
increaseto the project cost or scheduleor all .
Project control compares actual performance with plan (baseline), identifies variances and corrects adverse
variances.
Establish a control baseline
Track project performance against the baseline
Continually forecast performance at completion and compare to
the baseline
Identify changes to the project and assess their impact on
performance against the baseline
Take management action to correct adverse forecast and/ or
change variances
SUSHANT SHARMA
Understanding Project Control &
reporti ng Performance through
EARNED VALUE MANAGEMENT
SUSHANT SHARMA
Earned Value Management Exampl e
Task Construction of a building
Project Duration:4 Days
Project Budget: Rs. 4,000(i.e. BAC Budget at completion)
Plan Day1 Day2 Day3 Day4
Rs. 1,000 Rs. 1,000 Rs. 1,000 Rs. 1,000
It is PlannedValue (PV) =BudgetedCost of WorkScheduled(BCWS)
But onDay 1, O nly 75%of progress achieved and actuallymoneyspent to complete 75%
of works =Rs. 900.
It is Actual Cost (AC) =Actual Cost of WorkPerformed(ACWP)
SINCE O N Day 1, only 75%of progress achieved, idlyexpenditures should be Rs. 750.
It is Earned Value (EV) =BudgetedCost of WorkPerformed(BCWP)
SUSHANT SHARMA
Earned Value Management Exampl e
On Schedule
Behind
Schedule
Ahead Schedule
If SV is Zero -ve +ve
If SPI is 1 Less than 1 More than 1
Within Budget Over Budget Under Budget
If CV is Zero -ve +ve
If CPI is 1 Less than 1 More than 1
Performance Report: As on Day 1:
Schedule Variance (SV) = EV PV
= 750 1000 =-250
Schedule Performance Index (SPI) = EV/ PV
= 750/ 1000 =0.75
Cost Variance (CV) = EV AC
= 750 900 =-150
Cost Performance Index (CPI) = EV/ AC
= 750/ 900 =0.83
Cost Schedule Index (CSI) = SPI x CPI
= 0.75 x 0.83 =0.62
SUSHANT SHARMA
Earned Value Management Exampl e
The closer the CSI is to 1, the more likely the projects can be
recovered fromits deviation to the original baseline.
Forecasting Figure (based on current performance)
Estimate at Completion (EAC)
(Howmuchdo I require at completion of the Project?)
EAC =BAC/ CPI =4000/ 0.83 =4819
Estimate to complete (ETC)
(Howmuchdo I need for remaining Project?)
ETC =EAC AC =4819 900 =3919
Variance at Complete (VAC)
VAC =BAC EAC =4000 4819 =-819
SUSHANT SHARMA
What is needed for EVM?
A firm baseline plan
A project budget (BAC Budget at
Completi on)
A project end date
Tasks are identified & scheduled
Each task has a budget or effort (resource
loaded / weighting) (Task refers to cost
account)
Actual tracked
Earned Value Management
SUSHANT SHARMA
EVA Integrates Three
Dimensional
It compares the PLANNED amount of work
with what has actually been CO MPLETED, to
determine if COST , SCHEDULE, and WORK
ACCOMPLISHED are progressing as
planned.
Work is Earned
or credited as
it is completed.
SUSHANT SHARMA
What is Earned Value
Management (EVM)?
A method of integrating scope, schedule, and
resources (cost data) objectives for measuring
project performance.
It compares the amount of work that was
planned with what was actually earned with
what was actually spent to determine if cost and
schedule performance are as planned.
SUSHANT SHARMA
Cost
Variance
Approx. Time Variance
J F M A
Time
R
e
s
o
u
r
c
e
s
400
300
200
100
Time Now
ACWP
(Actual
Cost)
BCWS
(Planned
Value)
BCWP
(Earned
Value)
EVM Trend Analysis: Cumulative
M J J
A
Schedule Slip
Schedule
Variance
Risk
Management Reserve
At
Complete
Variance (
Min if MR is
over
Prog
Budget

SUSHANT SHARMA
J F M A
Time
R
s
.


R
e
s
o
u
r
c
e
s
400
300
200
100
Time Now
BCWS
(Planned
Value)
Unfavorable Schedule Performance
M J J
A
Schedule Slip
Schedule
Variance
Prog
Budget

BCWP
(Earned
Value)
SUSHANT SHARMA
Cost O verruns
Problem indicators
Early, large, unfavorable schedule variance
Time is money
Unfavorable cost variance
Front-loaded baseline
Zero variance
Too good to be true
Excessive resource consumption
Cant get there from here
SUSHANT SHARMA
To perform EVM, three values need
to be determined
Planned Value (PV or BCWS)
Actual Costs (AC or ACWP)
Earned Value (EV or BCWP)
Earned Value Management
SUSHANT SHARMA
Planned Value (PV)
What are the budgeted costs of the work
scheduled? Time phased based on baseline budget
Only changes when baseline is changed
Also referred as BCWS & BAC
How much do you expect to have done at completion ? How much do you expect to have done at completion ?
How much should you have done at point X ? How much should you have done at point X ?
Earned Value Management
SUSHANT SHARMA
Earned Value Management
Actual Costs (AC)
What are the actual costs of the work
performed?
Based on the actual completion of work packages
Actual costs for reported work
Also referred as ACWP
The dollar amount actually spent to date. The dollar amount actually spent to date.
Has no relationship to work accomplished Has no relationship to work accomplished
SUSHANT SHARMA
Earned Value Management
Earned Value (EV)
What are the budgeted costs of the
work performed? Based on the actual
completion of work packages
Baseline value of the reported work
Also referred as BCWP
How much have you actually gotten done as of How much have you actually gotten done as of
Today Today ??
Work accomplished, not money spent. Work accomplished, not money spent.
SUSHANT SHARMA
Calculating Earned Value and
interpreting results
to measure the progress of the project
help identify trends
forecast costs
and identify ways to correct/mitigate
project pitfalls.
Earned Value Management
SUSHANT SHARMA
Cost Variance (CV)
CV = EV - AC
Good News: If CV value is positive, the project is currentl y
under budget (spending less than planned for the work)
Bad News: If CV value is negative, the project is currently over
budget (spending more than planned for the work)
Earned Value Management
SUSHANT SHARMA
Earned Value Management
Cost Performance Index
(CPI)
CPI = EV / AC
Good News: If CPI value is >1 or =1, the project cost trend is
currently under or at planned budget
Bad News: If CPI value <1, the project cost trend is currently
over budget
SUSHANT SHARMA
Earned Value Management
Cost Variance % (CV%)
CV% = CV / EV
Good News: If CV% value is positive, the project is currently
under budget by the CV%
Bad News: If CV% value is negative, the project is currently
over budget by the CV%
SUSHANT SHARMA
Earned Value Management
Schedule Variance (SV)
SV = EV - PV
Good News*: If SV value is positive, the
project is currentl y ahead of schedule
Bad News: If SV value is negative, the
project is currently behind schedule
* - not all positive SVs are good
SUSHANT SHARMA
Earned Value Management
Schedule Performance
Index (SPI)
SPI = EV / PV
Good News: If SPI value is >1 or =1, the project schedule trend
is currently ahead or on planned schedule
Bad News: If SPI value <1, the project schedule trend is
currently behind schedule
SUSHANT SHARMA
Earned Value Management
Schedule Variance % (SV%)
SV% = SV / PV
Good News: If SV value is positive, the
project is currentl y ahead of schedule
Bad News: If SV value is negative, the
project is currently behind schedule
SUSHANT SHARMA
Earned Value Management
Estimate at Completion
(EAC)
#1
Actual costs to date plus a new estimate for all remaining work
(original plan no longer valid)
EAC = AC + ETC
(ETC Estimate to Complete)
SUSHANT SHARMA
Earned Value Management
Actual costs to date plus remaini ng budget
(current variances are viewed as atypical
of future variances)
EAC = AC + BAC - EV
Estimate at Completion
(EAC)
#2
SUSHANT SHARMA
Earned Value Management
Estimate at Completion
(EAC)
#3 & #4
Actual costs to date plus remaining budget modified by a
performance factor (CPI) (current variances are viewed as typical of
future variances).
EAC = AC + [(BAC - EV) / CPI]
EAC = BAC / CPI
SUSHANT SHARMA
(June2012 )Example 1 :Activity details of a Construction Projects are as below
Activity Duration
(weeks)
Budgeted
Cost (Rs in
Lacs)
Preceding
Activity
Scheduled
Start Time
(end of week)
Scheduled
Finish Time
(end of week)
A 4 20 - 0 4
B 5 10 A 4 9
C 8 16 A 4 12
D 5 25 B 9 14
E 4 8 B,C 12 16
F 3 12 B,C 12 15
G 4 12 D 14 18
H 4 6 E 16 20
ACTUAL STATUS BY THE END OF 10
TH
WEEK IS AS UNDER
Activity % complete Actual
Expenditure
(Rs in Lacs)
A 4 22
B 5 9
C 8 12
D 5 10
E 4 0
F 3 0
G 4 0
H 4 0
SUSHANT SHARMA
Determine :
(i) Earned Value
(ii) Cost &Schedule vari ances
(iii) CPI&SPI
(iv) Projected cost overrun and time overrun till project completion
Act
i vi t
y
BAC Planne
d %
compl
ete
Sched
uled
Ti me
of
Compl
etion -
STC
Actual
%
compl
ete
Actual
Expendi
ture (Rs
in Lacs)
BCWS/PV=
Planned %
complete X
BC
EV/BCWP=
Actual %
complete X
BC
Sche
dule
Vari a
nce
SV=
BCW
P-
BCW
S
Cost
Vari an
ce CV=
BCWP-
ACWP
CPI
=
EV/
AC
SPI=
EV/P
V
EAC=
BAC/
CPI
Cost
Overrun =
BAC-EAC
Ti me
Overrun
ETC=STC/S
PI
A 20 100 4 100 22 20 20 0 -2 0.9
1
1 21.97 1.97 4
B 10 100 5 100 9 10 10 0 1 1.1
1
1 9 -1 5
C 16 83.33 8 60 12 13.33 9.6 -3.76 2.4 0.8 0.72 20 4 11.11
D 25 71.4 5 40 10 28.56 10 -
18.56
0 1 0.35 25 0 14.28
E 8 62.5 4 0 0 5 0 -5 - - - 8 0 4
F 12 66.7 3 0 0 8 0 -8 - - - 12 0 3
G 12 55.55 4 0 0 6.66 0 -6.66 - - - 12 0 4
H 6 50 4 0 0 3 0 -3 - - - 6 0 4
Tot
al
49.6 Lacs 44.98
Lacs
1.4
Lacs
113.9
7
4.97Lacs 7 days
SUSHANT SHARMA
Value of Earned Value
Schedule Status Reporting
Cost Status Reporting
Forecast Costs
EV Integrates Cost, Scope &
Schedule objectives when
appropriately implemented
SUSHANT SHARMA
Shortcomings of Earned Value
Quantifying/measuring work progress
can be difficult.
Time required for data measurement,
input, and manipulation can be
considerable.
SUSHANT SHARMA