Network Analysis CPM and PERT Network analysis is a technique related to sequencing problems which are concerned with

h minimizing some measures of performance of the system such as the total completion time of a project, the overall cost and so on. Network analysis as a managerial technique is useful for describing the elements in a complex situation for the purpose of designing, planning, coordinating, controlling and making decision. Network analysis is especially suited to projects which are not routine or repetitive and which will be conducted only once or a few times. Two most popular forms of this technique no used in scheduling situations are Critical Path Method (CPM) and the Programme Evaluation and Review Technique (PERT). CPM helps planning and scheduling of activities in a complex sequence. Planning refers to the determination of activities that must be accomplished and the order in which such activities should be performed to achieve the objective of the project. Scheduling refers to the introduction of time into the plan thereby creating a time table for the various activities to be performed. CPM uses two time and two cost estimates for each activity (one time-cost estimate for the normal situation and the other estimate for the crash solution) but does not incorporate any statistical analysis in determining such time estimates. CPM operates on the assumption that there is a precise known time that each activity in the project will take. PERT assists a business manager in planning and controlling a project. It allows a manager to calculate the expected total amount of time the entire project will take to complete, at the stage of formulation and planning a project and at the same time highlighting the critical or bottleneck activities in the project so that a manager may either allocate more resources for them or keep a careful watch on such activities as the project progresses. In PERT we usually assume that the time to perform each activity is uncertain and as such three time estimates (the optimistic, the pessimistic and the most likely) are used. PERT incorporates the statistical analysis in determining time estimates and enables the determination of the probabilities concerning the time by which activity as well as the entire project would be completed. As such it can be taken as advancement over CPM. PERT is equally unique as a control device for it assists the management in controlling a project once it has begun, by calling attention as a result of constant review to such delays in activities which might cause a delay in the projects completion date.

Basic Concepts Network Series of related activities which result in some product (or services) which in turn contributes to the goals of a business or industrial or similar other organizations. Activity Represents some action and as such is a time consuming effort necessary to complete a particular part of the overall project; each and every activity has a particular point of time where it begins and ends Preceding activities These must be accomplished before a given event can occur Succeeding activities These cannot be accomplished until an event has occurred Concurrent activities These can be pursued simultaneously Dummy activities Activities used in the preparation of network diagrams to designate a precedence relationship and graphically shown as broken lines; they are characterized by their use of zero time and zero resources. Their main function is to help in assuring that the activities and events in a network diagram are in proper sequence. Event Represents start or completion of some activity and as such consumes no time; it signifies a mile stone or signal for dependent succeeding activities to begin. Node An event that is an ending event of two or more activities Burst An event that happens to be beginning event of two or more activities Network diagram A pictorial representation of the various events and activities concerning a project; each event is represented by a circle and arrows are used to indicate activities. There must be typically one starting event and one ending event. Path and Critical Path A path is a continuous chain of activities through a network, which connects the first event to the last event. Critical path consists of the sequence of those events and connected activities that require the maximum time in the completion of the project. It is that path which takes the longest time. It is known as critical because it controls the completion date of the project, for the length of this path determines the minimum time in which the project may be completed. Critical or bottleneck activities All activities associated with the critical path; any delay in completion of one or more of these activities will cause delay in the completion date of the project. Hence such activities require special attention of the project in charge. Earliest Start Time For an activity, this represents the earliest possible time it can begin on the assumption that all activities preceding to it are started at the earliest possible times. Earliest Finish Time For an activity, this represents the sum of the earliest start time and the estimated time to perform the concerning activity. 2

Latest Finish Time For an activity, this is the latest possible time an activity can finish without delaying the project beyond its dead line on the assumption that all subsequent activities are performed as planned. Latest Start Time For an activity, this represents the difference between the latest finish time and the estimated time for an activity to be performed. Total Float Duration by which an activity can be delayed without delaying the project and can be worked out as either LST EST or LFT EFT