Critical Path Method - Coursework Example

PART A According to Roy (2007), critical path method is a project management technique that is used to plan and control logical tasks of a project. Critical path method is a deterministic model that shows workflow of tasks systematically (Neeraj 2011; Gupta 1992). The method is used to identify tasks that are on the critical path. If tasks on the critical path are delayed, the whole project is also delayed in equal measure. The steps of developing the CPM include First, according to Sharma (2006), list all the tasks that need to be performed in the project. Secondly, number all tasks accordingly. Thirdly, breakdown and arrange all tasks sequentially (Khanna, 2007). Make sure no task is missing. Fourth, create a start node ( ) and draw arrows ( ) from the start node to the first task. Fifth, compute earliest start and finish time as well as late start and finish time. Sixth, construct a table indicating earliest, latest and normal time (Carmichael, 2006; Lock, 2007). Table 1: Normal time, latest start time and floats Preceding activity Activity Normal Duration Earliest Start Latest Start Float A - Excavate Sit 10 days 0 0 0 B A Install Ground Drainage 5 days 10 15 5 C A Install Piled Foundations 10 days 10 10 0 D C Erect Steel Frame 10 days 20 20 0 E D Pour Insitu Concrete Floors 9 days 30 30 0 F E Install Electricity, Lighting & IT Cabling 10 days 39 39 0 G F Electrical and Lighting fit out 8 days 49 51 2 H F Fix IT hardware and Screens 10 days 49 49 0 I F Tarmac a dam to access ramps & parking 4 days 49 55 6 J F Fix Automated Entrance Barriers 3 days 49 56 7 K H Commission Services and IT equipment 10 days 59 59 0 L I Landscaping 10 days 53 59 6 Seventh, compute total float for each task. This is done by finding the differences between earliest and late times. Eighth, identify critical activities. This is by identifying all tasks whose float is zero (Harris et al. 2006; Lawson et al. 1999). The critical activities follow a critical path. Ninth, link up all critical activities using distinguishing arrows and compute the total duration of the project (Lester, 2006). Figure 1:- Critical Part network of the project. The critical path of the project is indicated by dotted lines. The total duration of the project under normal circumstances is 69 days. PART B Table 2:- The total cost of the project using the ‘normal’ durations and costs Project duration Direct costs Sum of costs of all tasks Overhead costs Total 69 days (£50000 + £7500 + £70000 + £50000 + £54000 + £35000 + £28000 + £35000 + £20000 + £10500 + £35000 + £25000) = £420000 (69×£3000)= £207000 £627000 The project will cost £627000 if it began and get completed in time. The total expected period for the project is 69 days. PART C The linked bar chart show links between one activity and the preceding activities that must be completed before any other activity can begin. Figure 2: linked chart showing critical tasks and floats The spare time in a task is called a float (Tulsian, 2002; Mustafi, 2007). Floats assist in planning and relocating resources. Activities that do not have floats are critical. Therefore, project managers concentrate their energies and resources on critical tasks to avoid delaying the entire project. In the above diagram floats are indicated by the black shapes while red rectangular shapes indicate critical tasks. PART D Crashing the project Assuming that all tasks from task A to D were completed as planned. The changes that occur on the project schedule begin at task E. Task E (pouring the insitu concrete floors) has caused some 5 day delay, which will extend completion period by five days. This is because task E is on the critical path. Therefore, if nothing is done, the completion period of the project will be increase from 69 days to (69 + 5) 74 days. Table 3:- Total cost of the project as a result of delay in task E. Project duration Direct costs Penalties Overhead costs Total Cost 74 days (£50000 + £7500 + £70000 + £50000 + £54000 + £35000 + £28000 + £35000 + £20000 + £10500 + £35000 + £25000) = £420000 (£7500 × 5) = £37500 (74 × £3000) = £222000 = £679500 The total cost of the project will increase even if direct cost of the project will not increase as shown above. The total cost of the project will increase from £627000 to £679500 due to 5-day delay of the critical task E. The way to reach economic solution in the above project is by reducing the number of days it takes to complete the project (Haugan, 2002). Crashing a project is one of the ways of reducing the number of days it takes to complete a particular project. In so doing, it is possible to make time-cost trade offs and arrive at an economic solution to the project (Parker and Craig, 2008; Flouris and Lock, 2008). Therefore, project manager has an opportunity to crash the above project and reduce total overhead costs as well as avoid penalties associated with late completion. The following is a procedure to determine the most economic solution. The first step is to identify all the activities that lie on the critical path (Venkataraman and Pinto, 2008). From the above critical path analysis, it has been established that the following tasks lie on the critical path. Table 4- Tasks on the critical path Activity Normal Duration Earliest Start Latest Start Float A Excavate Sit 10 days 0 0 0 C Install Piled Foundations 10 days 10 10 0 D Erect Steel Frame 10 days 20 20 0 E Pour Insitu Concrete Floors 9 days 30 30 0 F Install Electricity, Lighting & IT Cabling 10 days 39 39 0 H Fix IT hardware and Screens 10 days 49 49 0 K Commission Services and IT equipment 10 days 59 59 0 The second step is to identify tasks on the critical path that can be done in fewer days without affecting quality of the project (Baker and Trietsch, 2009). From the instruction, the following tasks that lie on the critical path could be crashed. Table 5- Tasks on the critical path that can be crashed   Normal Duration Crash Duration Normal Cost for task Crash cost Additional Costs for crashing to minimum duration (CC-NC) Maximum reduction time(ND-CD) Cost to crash per period (CC-NC) / (ND-CD) A 10 days 7 days £50000 £58000 £8000 3 £2667 C 10 days 6 days £70000 £80000 £10000 4 £2500 D 10 days 7 days £50000 £57500 £7500 3 £2500 F 10 days 7 days £35000 £39500 £4500 3 £1500 H 10 days 7 days £35000 £39500 £4500 3 £1500 Thirdly, identify all tasks that have not been completed after 39th day. The tasks E and F from the above table can be crashed to reduce the total duration of the project. Table 6- Tasks on the critical path that will be crashed   Normal Duration Crash Duration Normal Cost for task Crash cost Additional Costs for crashing to minimum duration (CC-NC) Maximum reduction time(ND-CD) Cost to crash per period (CC-NC) / (ND-CD) F 10 days 7 days £35000 £39500 £4500 3 £1500 H 10 days 7 days £35000 £39500 £4500 3 £1500 The additional cost for crashing the above two tasks is £1500. This figure is lower than £3000 overhead cost that is incurred every day in the project. Fourth, compute the cost of reducing time for the identified tasks (Sivarethinamohan, 2008). This is done by computing Maximum reduction time, additional costs for the minimum duration and the cost to crash per period ration (slope). Maximum reduction time = Normal duration time subtract crash duration time. Additional costs for the minimum duration= Crash Cost subtract Normal Costs. The cost to crash per period ratio = (Additional costs for the minimum duration) ÷ (Maximum reduction time). The results of above computation are in 6th, 7th and 8th column in the above table. Fifth, select the least cost alternative from the identified tasks that are eligible for crashing. Neale and Neale (1989) assert that the cost effective alternative is dictated by the cost to crash per period ratio. Choose tasks with the lowest cost to crash per period ratio. Cost to crash per period ratios are equal in the above two tasks and both tasks will be crashed. Table 7- Total cost of the project to be undertaken in 63 days. Project duration Direct costs Overhead costs Total Cost 63 days (£50000 + £7500 + £70000 + £50000 + £54000 + £39500 + £28000 + £39500 + £20000 + £10500 + £35000 + £25000) = £429000 (63 × £3000) = £189000 = £618000 The total cost of 63 days project is £618000. Figure 3:-Critical Path after crashing the project. PART E Figure 4- Linked Barchart indicating revised project programme In the above diagram floats are indicated by the black shapes while red rectangular shapes indicate critical tasks. When task H and K was crushed, the number of days to complete the remaining part of the project became 63 days. This will reduce the total cost of the project from £679500 to £618000. References Baker, R.K. and Trietsch, D. (2009) Principles of sequencing and scheduling. New Jersey: John Wiley and Sons. Carmichael, D. G. (2006) Project planning, and control. New York: Taylor & Francis. Flouris, G.T. and Lock, D. (2008) Aviation project management. Burlington: Ashgate Publishing, Ltd. Gupta, B.C. (1992) Contemporary Management. New Delhi: APH Publishing. Gupta. M.P. (2009) Quantitative Techniques for Decision Making. 3rd edn., New Delhi:PHI Learning Pvt. Ltd. Harris, F., McCaffer, R. and Edum-Fotwe, F. (2006) Modern construction management. 5th ed., Oxford: Wiley-Blackwell. Haugan, T.G. 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(2002) Project management: designing effective organisational structures in construction. Oxford: Wiley-Blackwell. Mustafi, K.C. (2007) Operations Research Methods and Practice. 3rd ed., New Age International, New Delhi: Neale, R. H. and Neale, E. D. (1989) Construction planning. London: Thomas Telford. Parker, D. and Craig, A.M. (2008) Managing Projects, Managing People. South Yarra: Palgrave Macmillan Australia. Roy, N.M. (2007) A Modern Approach To Operations Management. New Delhi: New Age International. Seteroff, S.S. (2010) Dynamic Strategies for Small Businesses. New York: Momentum Press. Sharma, C.S. (2006) Operation Research: Pert, Cpm & Cost Analysis. New Delhi: Discovery Publishing House. Sivarethinamohan, R. (2008) Operations Research. New Delhi: Tata McGraw-Hill Education. Tulsian (2002) Quantitative Techniques: Theory & Problems. New Delhi: Pearson Education India. Venkataraman, R.R. and Pinto, J.K. (2008), Cost and value management in projects. 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