IB Business and Management

5.8 Project Management (Critical Path Analysis)

Task – Planning a task

• You are going to do some simple project planning

• For making breakfast…….

Information

• It takes me 3 minutes to make the toast in the toaster• It takes 1 minute to break and whisk the eggs and

then I need to put them in the microwave for a further 3 minutes.

• The grill takes 2 minutes to heat and bacon takes 4 minutes to cook under the grill.

• The breakfast takes me 1 minute to serve and a further 10 minutes to eat.

• Once I have eaten my breakfast I need to wash up which takes a further 2 minutes and then put the plates away which takes 2 minutes.

Questions

What is the quickest time to make and eat breakfast?Can you draw a diagram to explain the process to someone?Which tasks would cause the process to take longer if you didn’t start it on time?

Answer…..

• 1 Put the grill on 2 Put the bread in the toaster3 Whisking the eggs takes 1 minute4 Put the eggs in the microwave – need to be in for 3 minutes4 Once the grill is ready I put the bacon in – total time so far is two minutes5 The toast is ready after 3 minutes and the eggs are ready after a total of 4 minutes6 The bacon finishes after 6 minutes – 6 minutes so far7 The breakfast takes 1 minute to serve – 7 minutes so far10 – It takes 10 minutes to eat – 17 minutes so far11 – Washing up and putting away takes 4 minutes – 21 minutes

What is Critical Path Analysis?

• Critical Path Analysis (CPA) is a project management tool that:

• Identifies all the individual activities that make up a larger project.

• Determines how long each task will take• Identifies which tasks require other tasks to be

completed first• Identifies which tasks can take place concurrently• Identifies the earliest start time and latest finish

time of each task• Identifying the critical tasks that will cause delays

to the whole project if not completed on time

Important parts of the CPA Diagram

Key Rules of Critical Path Analysis

• Nodes are numbered to identify each one and show the Earliest Start Time (EST) of the activities that immediately follow the node, and the Latest Finish Time (LFT) of the immediately preceding activities

• The CPA must begin and end on one ‘node’ • Each activity is labelled with its name eg ‘print

brochure’, or it may be given a label, such as ‘D’• The activities on the critical path are usually

marked with a ‘//’

A

B

C

D

E

F

G

H

2 days

8 days

4 days

6 days

9 days

5 days

6 days

2 days

1

2

3

4

5

60

2 11

17

8 13

17

112

0

1510

A network diagram is made up of lines and nodes, showing The sequence in which tasks must be completed

Firstly, the activities are labeled…… this is usually doneusing letters in order to keep the diagram neater

The time taken for each activity is added along the lineNow, using the information given, we add the

EARLIEST START TIME (EST) on the diagram working fromleft to right

The nodes are now numberedNow working from right to left the LATEST FINISH TIME (LFT)

Is added to each node

The CRITICAL PATH is the path through the nodes where the EST and the LFT are the same. It is the longest path

through these nodesThese are labeled on the diagram using double lines

The critical activities are A, E and G…… management shouldConcentrate supervision on these activities

Example…. Baking a loaf of Bread

Activity Preceded by Elapsed time (minutes)

A weigh ingredients - 1

B mix ingredients A 3

C dough rising time B 60

D prepare tins - 1

E pre-heat oven - 10

F knock back dough and place in tins C&D 2

G 2nd dough rising time F 15

H cooking time E & G 40

Task

• Can you draw a critical path diagram for making breakfast?

What does the Diagram Show?

• If there is any delay on any of the activities on the Critical Path then the whole project will be delayed

• The total time along this critical path is also the minimum time in which the whole project can be completed.

• Some branches on the CPA may have FLOAT, which means that there is some spare time available for these activities.

A

B

C

D

E

F

G

H

2 days

8 days

4 days

6 days

9 days

5 days

6 days

2 days

1

2

3

4

5

60

2 11

17

8 13

17

112

0

1510

Calculating the Total Float(the amount of time an activity can be delayed without delaying the whole

project)

To calculate the total float for an activity you must use the formula:

Float = Latest Finish Time - Earliest Start Time - Activity Time

E.g. For Activity F 15 – 8 – 5 = 2 days

Work out the total float times for the other activities

A

B

C

D

E

F

G

H

2 days

8 days

4 days

6 days

9 days

5 days

6 days

2 days

1

2

3

4

5

60

2 11

17

8 13

17

112

0

1510

Calculating the Free Float (the amount of time an activity can be delayed without delaying the next

activity)

To calculate the free float for an activity you must use the formula:

Float = Earliest start time of next activity - Earliest Start Time of this activity - Activity Time

E.g. For Activity F 13 – 8 – 5 = 0 days

Work out the free float times for the other activities

DUMMY ACTIVITIES

Task

• Create and complete a network diagram to represent the

• following project:• Activities A (4 days) and B (5 days) can start

simultaneously  • Activity C (4 days) can begin once activities A and

B are complete• Activity D (3 days) can begin once activity B is

complete• Activity E (1 day) ends the project and can begin

once activities C and D are complete

• It is not possible… ….unless a DUMMY ACTIVITY is used

Dummy activities

• A dummy activity is one that is created purely to illustrate dependency

• They are not labelled and take up no time• They are represented by a dotted arrow• So our previous diagram would be completed as

follows:

What can a business do if a project is delayed?

• Firstly, the CPA is helpful because it shows the likely impact on the whole project if no action were taken.

• Secondly, if there is float elsewhere, it might be possible to switch staff from another activity to help catch up on the delayed activity.

• As a rule, most projects can be brought back on track by using extra labour – either by hiring additional people or overtime. Note, there will be usually be an extra cost. Alternative suppliers can usually be found – but again, it might cost more to get urgent help.

Critical Path Advantages• Gives a visual representation of the problem which can be easier to

understand than a list of times, dates and activities.• Can reduce lead times by identifying simultaneous activities. This could

give the firm a competitive advantage• By identifying the critical path and float activities, resources can be

allocated more efficiently. • Helps to reduce time lost between tasks allowing the project to run more

smoothly.• Encourages forward planning and the consideration of all tasks that make

up a project. Contingency plans can be formulated based on different scenarios.

• Concentrates resources (labour and capital) on the most important areas (those lying on the critical path), instead of on the least important (those that have float time).

• Enables careful planning of cash flow. Supplies can be ordered and paid for when they are needed instead of well ahead of time when they are not.

• Encourages monitoring of the project. Actual timings can be compared to expected timings.

Limitations of Critical Path

• Simply drawing a network does not ensure smooth running of a project.

• Some projects are too large and complex. Computer programs may offer better planning tools.

• Network diagrams are only useful if the data used to produce them is accurate. Errors could lead to the identification of a false critical path.

• Does not ensure that managers keep control of the project. Some activities may over-run.