BBDM2153_OM_T4

NETWORK ANALYSIS

Network Analysis refers to CPM and PERT, which are powerful tools used to schedule and plan complex projects. They act as the basis for schedule planning and resource usage.

CPM formally identifies tasks which must be completed on time in order that the whole project be completed on time. If any task that lies on the critical path is delayed, then the whole project will also be delayed.

PERT is a variation of CPM. It takes a more skeptical view of the time estimates for each activity in the project. To use it, three time estimates are performed - optimistic, most likely, and pessimistic. From the three time estimates, the expected completion time for each activity is then calculated. Whereas CPM assumes time certainty for each activity, PERT is more realistic by considering the uncertainties that is prevalent in actual working environments.

Another useful application of network analysis is that it allows for the pinpointing of activities which can be crashed in order to shorten the project completion time. Activities to be crashed are those activities that lie on the critical path. When crashing occurs, there will be an increase in cost of the activities to be crashed as more resources are used to finish the activity earlier than scheduled. In deciding which activity to crash, the guiding principle is to choose the activity in which the increase in cost is minimum.