Project Scheduling: Lagging, Crashing, and Activity Networks

INSTRUCTOR’S RESOURCE MANUAL

CHAPTER TEN

Project Scheduling: Lagging, Crashing, and Activity Networks

To Accompany

PROJECT MANAGEMENT:

Achieving Competitive Advantage

Jeffrey K. Pinto

CHAPTER 10

PROJECT FOCUS – A Crushing Issue: How to Destroy Brand New Cars

INTRODUCTION

10.1 LAGS IN PRECEDENCE RELATIONSHIPS

Finish to Start

Finish to Finish

Start to Start

Start to Finish

10.2 GANTT CHARTS

Adding Resources to Gantt Charts

Incorporating Lags in Gantt Charts

PROJECT MANAGERS IN PRACTICE – Major Julia Sweet, USAF

10.3 CRASHING PROJECTS

Options for Accelerating Activities

10.4 ACTIVITY ON ARROW NETWORKS

How are the Different?

Dummy Activities

Forward and Backward Passes with AOA Networks

AOA versus AON

10.5 CONTROVERSIES IN THE USE OF NETWORKS

Conclusions

Summary

Key Terms

Solved Problems

Discussion Questions

Problems

Integrated Project: Developing the Project Schedule

Case Study 10.1 – Project Scheduling at Blanque Cheque Construction (A)

Case Study 10.2 – Project Scheduling at Blanque Cheque Construction (B)

MSProject Exercises

PMP Certification Sample Questions

Bibliography

TRANSPARENCIES

10.1NETWORK INCOPORATINGFINISH TO STARTLAG OF 4 DAYS

Lag 4

10.2FINISH TO FINISH NETWORK RELATIONSHIP

10.3START TO STARTNETWORK RELATIONSHIP

3 days

10.4START TO FINISH NETWORK RELATIONSHIP

3 days

10.5BENEFITS OF GANTT CHARTS

1) They are very easy to read and comprehend

2) They identify the project network coupled with its schedule baseline

3) They allow for updating and project control

4) They are useful for identifying resource needs and assigning resources to tasks

5) They are easy to create

10.6 SAMPLE GANTT CHART

Microsoft product screen shot(s) reprinted with permission from Microsoft Corporation.

10.7 SAMPLE TRACKING GANTT CHART WITH CRITICAL PATH A-C-D-F-H

Microsoft product screen shot(s) reprinted with permission from Microsoft Corporation.

10.8 GANTT CHART WITH RESOURCES IDENTIFIED FOR EACH TASK

Microsoft product screen shot(s) reprinted with permission from Microsoft Corporation.

10.9 CRASHING PROJECTS – UNDER WHAT CONDITIONS?

The initial schedule may be too optimistic.

Market needs change and the project is in demand earlier than anticipated.

The project has slipped considerably behind schedule.

The contractual situation provides even more incentive to avoid schedule slippage.

10.10 TIME-COST TRADEOFFS FOR CRASHING ACTIVITIES

10.11 CRASHING ACTIVITIES – AN EXAMPLE

Formula Slope = crash cost – normal cost

normal time – crash time

Example – Calculating the Cost of Crashing

SUPPOSE:

NORMAL ACTIVITY DURATION = 8 WEEKS

NORMAL COST = $14,000

CRASHED ACTIVITY DURATION = 5 WEEKS

CRASHED COST = $23,000

THE ACTIVITY COST SLOPE =

23,000 – 14,000 or, $9,000 = $3,000 per week

8 – 5 3

10.12 SAMPLE AOA NETWORK DIAGRAM

10.13 PARTIAL AOA NETWORK ILLUSTRATING DUMMY ACTIVITIES

DISCUSSION QUESTIONS

Please give examples of circumstances in which a project would employ lag relationships between activities using:
Finish to start
Finish to finish
Start to start
Start to finish

a. Finish to start: In home construction, plaster is applied to walls (activity A) before they are painted (activity B). The plaster has to dry before the walls can be painted. This creates a lag of one day between the finish of activity A and the start of activity B.

b. Finish to finish: A contractor may want the gas line and plumbing to be completed at the same time so that appliances can be installed in a kitchen. In this case, he/she may delay installation of a gas line (activity A) so that it will be completed at the same time as the plumbing (activity B). This creates a lag prior to the start of activity A so that A and B will finish on the same day.

c. Start to start: A contractor may elicit RFQs from subcontractors (activity B) while blueprints are still being fine tuned (activity A). This creates a lag between the start of activity A and the start of activity B.

d. Start to finish: Workers can begin putting up shower molding (activity A), but the work cannot be finished until installation of the shower head and faucet begins (activity B).

2. The advantage of Gantt charts lies in their linkage to the project schedule baseline. Explain this concept.

Because they are tied to the project schedule, Gantt charts allow project teams to track a project’s actual progress with the project’s planned progression. They create an easy reference for project teams that alert members to variance from the schedule baseline and the impact of the variance on the project network. Delays in one activity may create delays in subsequent activities. Here, Gantt charts can be used to update the baseline. Their depiction of variances from the baseline makes Gantt charts a useful project control tool by allowing the PM to identify problems that may jeopardize the team’s ability to meet project milestones.

3. What are the advantages in the use of Gantt charts over PERT diagrams? In what ways might PERT diagrams be advantageous?

Gantt charts display the project baseline. Each activity can then easily be referenced at any point during the project to see if progress is on target. Gantt charts are also more useful because the use of resources can be added to the charts. Finally, Gantt Charts are visually appealing and easily understandable. PERT diagrams offer a means to convey complex network relationships more completely and make the identification of predecessor and successor relationships easy to recognize.

4. Under what circumstances might you wish to crash a project?

Crashing may be desirable if initial time estimates are inaccurate, the project falls behind schedule or the project completion date is moved up. In these cases, the project cannot be completed on time given the original schedule. Crashing would expedite the project/activities to meet new completion dates. Another scenario occurs when late fees or penalties may be incurred. It may be more cost effect to crash activities than to pay the additional fees.

5. In crashing a project, we routinely focus on those activities that lie on the critical path, not activities with slack time. Explain why this is the case.

The critical path is the longest path through the network. Crashing activities on the critical path reduces the overall project duration time. Crashing activities outside of the CP (those with slack time) will increase overall costs, but only reduce the time to complete that single activity, not the overall time of the project. Therefore, it is more efficient, when trying to expedite the entire project, to crash activities that lie on the CP.

6. What are some of the advantages in the use of AOA notation as opposed to AON? Under what circumstances does it seem better to apply AON methodology in network development?

Advantages of the AOA notation include its prevalence in some specialized business fields, its clearer depiction of complex projects and event nodes/milestones in AOA are easier to identify. The AON methodology is more suitable when there are several merge points within the network. Merges make AOA notation convoluted (requiring the use of dummy activities) due to tasks being listed on arrows connecting activities in the diagram. AON is also more applicable when computer scheduling is desired because AON notation is used in most PM computer software packages.

7. Explain the concept of a “dummy variable.” Why are they employed in AOA notation? Why is there no need to use dummy variables in an AON network?

Dummy variables are arrows used in AOA notation to establish precedent relationships between activities. There are no durations or work description assigned to the arrows; they are simply used to indicate relationships. AOA requires the use of dummy variables because arrows cannot be used to connect two predecessors to one successor activity. Meaning if A and B are predecessors to C, there is no way, without dummy variables, to connect the dual predecessors to C. AON does not use dummy variables because arrows are used to indicate relationships between activities. If multiple predecessors exist, then multiple lines will be used to connect A and B (or as many activities as needed) to C.

8. Please identify and discuss some of the problems or dangers in using project networks. Under what circumstances can they be beneficial and when can they be dangerous?

One problem is that complex project may make networks meaningless. Project may be stretched out over several years making a traditional network diagram to complex to use. There is also the danger that information in the network may be incorrect or oversimplified leading to errors in its use downstream. Networks may also be misapplied. Companies may try to employ networks where they are unsuitable (i.e. scheduling problems outside of project management). Caution must be taken when using networks in a situation where multiple sub-contractors are employed. Sub-contractors need to be informed of other scheduling (i.e. other sub-contractors) taking place in the project. Otherwise, independent networks for each sub-contractor will exist and these networks may conflict with one another. Lastly, optimism in time estimates may create faulty network construction. Though there are several potential dangers inherent in project networks, they can be extremely beneficial to project teams. Networks visually depict what needs to be done, when it needs to be started and completed and how one activity affects other activities within the project. This visual map can be very helpful in making sense of complex project plans.

CASE STUDIES

Case Study 10.1 – Project Scheduling at Blanque Cheque Construction (A)

The general nature of the project, developing a strip mall with four stores of roughly equal size, is intended to challenge students to identify a variety of activities necessary to accomplish the project. The first step is to create a simple WBS of the various project activities and deliverables that will be required. Instructors can decide in advance how much detail they want students to go into for this assignment; for example, they may wish to leave all elements at the Deliverable level and not get down to specific Work Packages.

Questions:

Develop a project network consisting of at least 20 steps that should be done to complete the project. As the case suggests, keep the level of detail for these activities general, rather than specific. Be sure to indicate some degree of precedence relationship among the activities.

As with the above explanation, the key here is to have students first identify some of the activities (or Deliverables) for this construction project. The instructor may wish to work with the students, offering some prompts in the cases where people are unsure what actually goes into a mall development. After 20 steps are identified, challenge the students to create a simple activity network with precedence ordering of the steps. This step in the activity works well as a group exercise where students can bounce their ideas off each other and challenge basic assumptions about precedence ordering.

Suppose you now wanted to calculate duration estimates for these activities. How would you make use of the following approaches? Are some more useful than others?

i.Expert opinion

ii. Past history

iii. Mathematical derivation

In answering this question, students can first be assigned to create a duration estimation table using Beta distributions. Brain storming will allow them to identify reasonable worst, most likely, and best case scenarios for each activity duration. Then, they can answer the question regarding the use of expert optinion, past history, or mathematical derivation by showing how each could be applied to duration estimation. Instructors can challenge each of these points, arguing that expert opinion is just that, the experience of experts, not us. Likewise, they can point out that historical estimates may work or intervening issues may have come up that make historical parameters unduly pessimistic or optimistic (e.g., the loss of regional suppliers makes it harder and lengthens the time to identify and contract for project logistics).

Joe was trying to decide which scheduling format to employ for his planning: AON or AOA. What are some of the issues that Joe should first consider prior to choosing between these methods?

The chapter identifies a number of issues that serve to help determine whether to use AON or AOA notation. Specifically:

The benefits of AON are centered primarily in the fact that it has becomes the most popular format for computer software packages, such as MS Project. Hence, as more and more companies use software-based project scheduling software, they are increasingly using the AON method for network diagrams. The other benefits of AON are to place the activity within a node and use arrows merely as connection devices, thereby simplifying the network labeling. This convention makes AON networks very easy to read and comprehend, even for novice project managers. The primary drawback with AON networks occurs when the project is very complex, with numerous paths through the model. The sheer number of arrows and node connections when multiple project activities are merging or bursting can make AON networks difficult to read.

On the other hand,AOA modeling’s greatest benefit lies in its accepted use in certain business fields, such as construction, where AON networks have not yet made significant inroads. Also, in the cases of large, complex projects it is often easier to employ the path process used in AOA. Finally, because the activity and node system is used, for projects that have many significant milestones, such as supplier deliveries, AOA event nodes are very easy to identify and flag. On the other hand, there is no question that some conventions in AOA diagramming are awkward; most particularly, the use of dummy activities. Dummy activities are not a simple concept to master and require more training on the part of novice project managers to be able to use them easily. Finally, AOA networks can be “information intensive” in that both arrows and nodes contain some important project information. Rather than centralizing all data into a node, as in the AON convention, AOA networks use both arrow and nodes to label the network.

Case Study 10.2 – Project Scheduling at Blanque Cheque Construction (B)

This case identifies a situation in which the project manager is facing a late project with serious consequences as a result. He is trying to decide whether or not to crash activities from this point to the end of the project and the focus is intended to make students understand the benefits and drawbacks of crashing. Because it should not be done without serious consideration of the escalating costs, crashing a project typically comes down to a benefits and drawbacks analysis, such as is the case here.

Questions:

What are some of the issues that weigh in favor of and against crashing the project?

Crashing must be considered in light of a number of factors, principally the penalties that the contractor will be forced to absorb should the project be late. In this case, the decision is based on the fact that top management has informed the project manager that he has some discretionary money to spend but the project cannot be late, suggesting that crashing makes good sense.

Suppose you were the site supervisor for this project. How would you advise Joe to proceed? Before deciding whether or not to crash the project, what questions should you consider and how should you evaluate your options?

Among the important questions to ask is the critical one: will crashing thee activities get us back on track? There is no point in crashing non-critical activities, nor should it be done if the net effect is only to spend money but not to complete the project within the necessary time period. Thus, the “dollar-day” choices have to be clear enough to warrant the decision to crash remaining activities. In this project case, most students will recommend crashing the activities as it is a relatively cost-free exercise for the project manager (i.e., he has discretionary money and has calculated that crashing remaining activities will bring them close to the project deadline for completion). Instructors can use this scenario with real data to demonstrate how to prioritize activities for crashing.

PROBLEMS

Please develop the network activity chart and identify the critical path for a project based on the following information. Draw the activity network as a Gantt chart using MSProject. What is the expected duration of the project?

Activity / Expected Duration / Predecessors
A / 5 days / --
B / 10 days / A
C / 8 days / A
D / 1 day / A
E / 5 days / B, C
F / 10 days / D, E
G / 14 days / F
H / 3 days / G
I / 12 days / F
J / 6 days / H, I