GE404 All Lectures

‫ﺑﺴﻢ ﷲ الرحمن الرحيﻢ‬
ENGINEERING MANAGEMENT
(GE 404)
GE 404 (Engineering Management) 20 January, 2021

About the Instructor
2
Abdulrahman A. Bin Mahmoud, PhD

Construction Engineering and Management
Civil Engineering Department
 Office: 2A50
 Office hours:
Tuesday & Thursday 9-11pm, or by appointment

 E-mail: abinmahmoud@ksu.edu.sa

Let’s Get to Know Each Other!
3
 Name and Major?
 What do you think of distance/ online education?

(GE 404)
LECTURE # 1
Course Description and Introduction

Contents
5
 Objectives of the present lecture

 About the Instructor
 Course Description
 Course Learning Outcomes (CLO)
 Outcome Assessment
 Project Definition
 Characteristics of a Project
 Management and its functions
 Levels of Management
 Project Management
 Project Management Institute
 Main Resources
 Project Stake Holders
 Critical success factors
 Assessing success of the Project
 A Real life application
 Further reading

Objectives of the Present lecture
6
 To provide an overview of the course contents

 To discuss the course learning outcomes
 To give an overview of Project Management

Course Description
7
 Introduction to project management objectives

 Project participants and project life cycle
 Planning engineering projects
 Scheduling using activity-on-node and precedence methods
 Resource leveling and allocation
 Project time-cost trade-off
 Updating construction schedules
 Project time and cost control
 Contractual and organizational approaches including
definition of organizational responsibilities of project
participants

Text Book
8
Project Management with

CPM, PERT, and Precedence
Diagramming
by
J. J. Moder
C. R. Philips
and
E.W. Davis
Edition: Third
Publisher:
VAN NOSTRAND REINHOLD COMPANY, NY

Other Book
9
Construction Planning
and Scheduling
by
Jimmie Hinze
Edition: Fourth
Publisher: Pearson, 2011

Course Learning Outcomes
10
Students completing this course successfully will be able to:

 Identify the fundamentals of project Management.
 Create a complete organizational structure and role of
responsibilities for project teams.
 Apply the following methods to prepare project schedules: Bar
chart, Activity-on-node, Precedence diagram, and Time-
scaled network.
 Develop project schedule for purpose of resource levelling and
allocation and time-cost trade-off.
 Monitor a construction project for purpose of time and cost
control.
 Apply the fundamental of project cash flow.
 Understand principles of project organization and contractual
relationships

Outcome Assessment
11
 The final course grade will be determined based on the
following weights:
 Mid-term Exam 30%
 Tutorial (Homworks and Quizzes) 10%
 Course Project Assignments 20%
 Final Examination 40%

Course Syllabus
12

Project Definition
13
 A project is a set of tasks or activities

related to the achievement of some
planned objective
 Other Definitions:
 A project is a temporary endeavor undertaken
to create a unique product or service or result
(PMI)
 A combination of human and non-human
resources pooled together to achieve a specific
purpose and deliverables
 A project is a one-shot, time-limited, goal-
directed, major undertaking requiring the
commitment of varied skills and resources

Characteristics of a Project
14
 A project has a unique purpose

 A project is temporary
 A project requires resources
 A project has a primary sponsor or customer
 A project involves uncertainty

Examples of Projects
15
 Construction of building and infrastructure

 Villas; Malls; Hospitals; Dams; Tunnels; Bridges; power
plants; Refineries etc.
 Development of a software product
 Software for the registration of students in the university
 Manufacturing of Aircrafts
 Commercial plane; cargo planes; Fighter planes etc.

Management and its Functions
16
 Management is a process
concerned with the achievement of
goals or objectives. It includes:
 Planning - deciding what is to be
done
 Organizing – (implementation)
making arrangements
 Staffing - selecting the right people
for the job
 Leading/Directing - giving
instructions
 Controlling/Monitoring - checking
progress against plans and taking Note: Motivating is also considered
actions to remedy hold ups one of the functions of management,
because without motivation,
employees cannot work effectively.

Levels of Management
17
The main levels of management are:

 Top level
 Middle level
 Lower/Supervisory level

Levels of Management (Contd.)
18
 Top Level Management

 The managers working at this level have maximum authority.
 It includes group of crucial persons essential for leading and directing the efforts of other
people. For example, Managing Director, General Manager, President, Vice President, Chief
Executive Officer (C.E.O.) etc.
 Middle Level Management
 This level of management consists of departmental heads such as purchase department head,
sales department head, marketing manager etc.
 People of this group are responsible for executing the plans and policies made by top level.
 Low Level Management
 Their authority is limited. The quality and quantity of output depends upon the efficiency
of this level of managers.
 Managers of this group actually carry on the work or perform the activities according to
the plans of top and middle level management. Supervisors, clerks etc. come under this
group.
 They pass on the instruction to workers and report to the middle level management.

Involvement % of the different levels of management
19
 Figure below shows the involvement % of the different

levels of management for:
 (Planning vs. controlling)
 (conceptual vs. technical)
Planning
Control
Conceptual
Technical
Top Level Middle Level Low Level
Management Management Management

Summary
(Levels of Management)
20

Project Management
21
 Project management, is the application of knowledge, skills,

tools, and techniques to project activities to meet the project
requirements.
 Project Management involves
 Planning,
 Organizing
 Staffing
 Directing; and
 Controlling
 Project management major constraints are
 Time
 Cost
 Performance of the end product

Project Management
Main (Function) Activities
22
Planning Scheduling
 Objectives Project activities
 Resources Start & end times
 Work break- Network
down schedule
 Organization
Controlling
Monitor, compare, revise, action
Project Manager
23
 A project manager is the person who has the overall

responsibility for the successful
 PLC
 Initiation,
 Planning,
 Design,
 Execution,
 Monitoring,
 Controlling, and
 Closure of a project.

Project Management Institute (PMI)
24
Project Management Institute
 Project Management Institute is the
world's leading not-for-profit Founded 1969
professional organization for Project Type Professional
Organization
Management.
Focus Project management
 PMI provides services including the Location Newton Square,
development of standards, research, Pennsylvania, United
States
education, publication, hosting Area served Worldwide
conferences and training seminars, Method Certification, Industry
and providing accreditation in project standards, Conferences,
Publications
management. Members 341,900+
Employees 51–200 employees
Slogan "Making project
management
indispensable for
business results”
Website www.pmi.org

Main Resources (3Ms)
25
1. Money
2. Materials & Machines
3. Man Power

Project Stakeholders
26
 Project sponsor
 Project owner
 Project manager
 Customer/user
 Functional managers
 Performing organization
 Project management team
 Internal and external contractors
 Suppliers and vendors
 Government agencies and media

Critical Success Factors for Different Project
Objectives
27
 Scope
 Cost
 Time
 Quality
Scope
Good Will
Quality
Safety
Cost Time
Assessing Success of a Project
28
 Here are the six factors for measuring the success of a project:
 Schedule
 Within schedule?
 Scope
 Budget
 This is often the most important factor for many projects. In the end, did
you stick to the budget?
 Team satisfaction
 Keeping the team happy means if I do need them to work a late night here
and there, they won't do it begrudgingly/unwillingly.
 Customer satisfaction
 Quality of work
 The quality of one project often affects another, If you deliver a strong
product, your client will tell people about it, and that's where your next
project should come from.

A Real Life Application
29
What is Construction
Management?
A lot of work goes into
constructing a
building, but how is it
all managed and
facilitated?

Further Reading
30
Read more about the Project Management Institute (PMI) from:

www.pmi.org

Thank You
31

(GE 404)
LECTURE # 2
Project Management Organizational Structures

Contents
2
 Objectives of the Present Lecture

 The Project Organization Structure
 Types of Project Organizations Structures
 Main Project Participants
 Structures of Contractual Relationship between the Project Participants
 Further Reading

3
 To learn the ways through which organizational

structure are defined
 To explain the popular structures of contractual
relationship between the project participants

The Project Organization Structure
4
 One of the important decisions of project management is

the form of organizations structure that will be used for
the project.
 A project organization is a structure that facilitates the
coordination and implementation of project activities.
 The structure defines the relationships among members
of the project management and the relationships with
the external environment (within firm and with different stakeholders).
 The structure defines the authority by means of a
graphical illustration called an organization chart.

Project Organization Chart
QHSE (Quality, Health, Safety, Environment): Four components of a responsible corporate management approach based on the
belief that all accidents are caused by human error and are, therefore, preventable with better training and administration.
GE 404 (Engineering Management) 5 20 January, 2021

Objective of Project Organization
6
 The main objective of Project organization is to

establish the relationship among:
• The work to be done
• The people doing the work/work team
• The work place(s)

Defining the Organization
7
 Within the firm

Involves internal organization of personnel/employees (i.e.
•
to organize staff duties)
 With other firms
• Number of organizations involved
• Relationship between the organizations
• When each organization be involved in the project

Types of Project Organization Structures
8
 Functional
 Personnel organized by FUNCTION, i.e. electronics, software,
operations, etc.
 Project
 Personnel organized by Projects, i.e. Ka Band receiver,
Spectrometer, etc.
 Matrix Organization
 Personnel organized in BOTH ways

Functional Organization
9
Functional organization is
a hierarchical organization
where each employee has
one clear superior, and
staff are grouped by
areas of specialization
and managed by a
person with expertise in
that area
Black boxes indicate staff engaged in project activities

Project Organization
10
Project organization
is any organizational
structure in which the
project manager has
full authority to
assign priorities,
apply resources, and
direct the work of
persons assigned to
the project.

A sample project organization
11
President
Human Quality
Resources Marketing Finance Design Production
Mgt
Project 1 Project
Manager
Mechanical Test
Technician
Engineer Engineer
Project 2 Project
Manager
Electrical Computer
Technician
Engineer Engineer

“Project organization” works best when
12
1. Work can be defined with a specific goal and deadline

2. The job is unique or somewhat unfamiliar to the existing
organization
3. The work contains complex interrelated tasks requiring
specialized skills
4. The project is temporary but critical to the organization
5. The project cuts across organizational lines

Characteristics of Project Organization
13
 Often temporary structure

 Uses specialists from entire company
 Headed/leaded by project manager
 Coordinates activities
 Monitors schedule and costs

Matrix Organization
14
 Matrix organization is any

organizational structure in which the
project manager shares
responsibility with the functional
managers for assigning priorities
and for directing the work of persons
assigned to the project
 Each staff member is a member of 2
distinct organizations
o Functional – Electronics, SDD,
etc.
o Project – PTCS, Ka Band
Receiver, etc.

Types of Matrix Organization
15
 Strong Matrix
 Weak Matrix
 Balanced Matrix

Strong Matrix Organization
16

Weak Matrix Organization
17

Balanced Matrix Organization
18

Balanced Matrix versus Strong Matrix Organization
19

Summary
20

Main Project Participants
21
 The Owner
o Construction manager
 The Contractor
o General and subcontractors,
o Material and equipment supplier
 The Designer
o Consultant and architecture/engineer (A/E)

Structures of Contractual Relationship between the
Project Participants
22
Four principal structures of contractual relationship exist between

the project participants:
 Traditional
 Owner-Builder
 Turnkey
 Professional Construction Manager

Traditional
23
 This is employed for ordinary projects of

moderate size and complexity.
 In this, the owner often employs a designer
(an architectural/engineering or A/E firm)
which prepares the detailed plans and
specifications for the constructor (a general
contractor).
 The general contractor is responsible for the
construction itself even though the work may
actually be undertaken by a number of
specialty subcontractors.
 The designer also acts on behalf of the owner
to oversee the project implementation during
construction.

Advantages and Disadvantages of
Traditional Structure
24
Advantages Disadvantages
1. Widely accepted and 1. Design may not benefit from

historically supported. construction expertise.
2. Using lump-sum the overall cost 2. Overall design-construct time is
can be determined before usually the longest.
awarding the contract. 3. The owner and the designer are
3. Minimal involvement of the usually in an adversary position
owner during construction. with general contractor
4. Design-construct time can be (maximum vs. minimum quality).
reduced using phased 4. Change orders will often end in
construction. disputes and may drive-up costs.

Owner-Builder
25
 In this approach, owner acts as the

general contractor on its own
project, and is responsible for
design and construction.
 However, the owner may choose to
subcontract a substantial portion of
the project to outside consultants
and contractors for both design and
construction, even though it retains
centralized decision making to
integrate all efforts in project
implementation.

Advantages and Disadvantages of
of Owner-Builder Structure
26
 Justified when the volume of work  Time. Owner-builder structure, in general,

is relatively large and relatively requires more time.
constant over a period of time.  Quality Control. Quality is difficult to
 The owner-builder can employ all maintain in such structures.
techniques of the design-  Getting Finance. Most lenders will not
constructor, the professional provide construction loans if the builder is an
construction manager, and the Owner-Builder. There are some very good
traditional approach. reasons for this such as most people’s lack of
 Justified where the project experience, a lack of financial control and the
management can be separated from risk that a project will be halted due to family
operational management. or other personal issues.

Turn-key
27
 Some owners wish to delegate /assign all responsibilities of design and

construction to outside consultants in a turnkey project arrangement.
 A contractor agrees to provide the completed facility on the basis of performance
specifications set forth by the owner.
 This approach is the direct opposite of the owner-builder approach in which the
owner wishes to retain the maximum amount of control for the design-
construction process

Advantages and Disadvantages of Turn-key Structure
28
1. Only one contract for the owner. 1. Usually cost cannot be determined
Design, construction, and know-how before construction.
are furnished by a single organization.
2. If the project cost is fixed price,
2. Minimal owner coordination -dealing
the overall quality and
with a single organization.
performance may be affected to
3. Appropriate for unknowledgeable
ensure profit.
owner.
4. Design-construct time can be reduced 3. The owner may not be informed if
through using phased construction. there is a design or construction
5. Construction expertise can be utilized problems that may affect the
during design phased construction. schedule or the cost.
6. Change orders are easy to handle.
Professional Construction Manager
29
 Professional construction management refers to a project management team consisting

of a professional construction manager and other participants who will carry out the
tasks of project planning, design and construction in an integrated manner.
 A professional construction manager is a firm specialized in the practice of professional
construction management which includes:
 Work with owner and the A/E firms from the beginning and make recommendations
on design improvements, construction technology, schedules and construction
economy.
 Propose design and construction alternatives if appropriate, and analyze the effects
of the alternatives on the project cost and schedule.
 Monitor subsequent development of the project
 Coordinate procurement of material and equipment and the work of all construction
contractors

Advantages of Professional Construction Manager
31
 Special construction skills may be utilized at  The most significant disadvantage

all stages of the project with no conflicts of
interest between the owner and the designer. of many Construction
 Independent evaluation of costs, schedules, Management contracting
and overall construction performance, arrangements is that significant
including similar evaluation for changes or portions of the total services for
modifications helps assure decisions in the
best interest of the owner. which the Construction Manager is
 Full-time coordination between design and the remunerated are not subject to
construction contractors is available. competitive bidding.
 Minimum design-construction time can be  A second commonly seen
achieved through use of phased construction.
 The professional construction manager disadvantage is the open-ended
approach allows price competition from local nature of many Construction
contractors akin to the traditional lump-sum or Management contractual
unit-price methods.
 Significant opportunities are provided for
arrangements, which unnecessarily
value engineering in the design, bidding, and expose the Owner to the risk of
award phases. unanticipated cost increases.
Further Reading
32
Read more about the Project Management Organizational Structures

from:
http://pmbook.ce.cmu.edu/02_Organizing_For_Project_Management
.html

Thank You
33

(GE 404)
LECTURE # 3
Project Life Cycle and Time Management Process

Contents
2

 Project Management and Project Participants
 Project Management Hierarchy
 Project Life Cycle
 Work Breakdown Structure (WBS)
 Further reading

3
 To provide an overview of the Project life cycle

 To discuss Work Breakdown Structure (WBS)
 To give an overview of Time Management
Process

Project Management and Project Participants
4
 Project management is the discipline of managing a series of

tasks within a given amount of time and within a budget
 Project participants consist of all the individuals entities who
either:
 Work on the project directly, such as team members,
consultants, contractors, and the sub-contractors
 Influence the project directly, such as the internal project
stakeholders (including functional managers and executives),
the project sponsor, and the customer/client
 Usually, the project participants are all listed in the project
management hierarchy of the project.

Project Management Hierarchy
5
 A project management hierarchy is the hierarchy of roles in a project (based on leadership).

 By looking at the project management hierarchy, one can understand who reports to who and
who has authority (implied or explicit) over who in the project.
 For example, here's the project management hierarchy in an web project:
Project Owner
Project Sponsor
Project Manager
Team Leader
Database Architect
Programmer
Designer
HTML Developer
 In the above example, we understand that the HTML Developer reports to the team leader, who in
turn reports to the project manager, and who finally reports to the project sponsor and the project
owner.
 There is no standard/generic project management hierarchy, but PM hierarchies for the same
industry are very similar.

Project Life Cycle
6
The project life cycle consists of

four phases:
 Phase 1: Initiation/Concept
 Phase 2: Planning
 Phase 3: Execution (including
monitoring and controlling)
 Phase 4: Transfer/Closure

Initiation Phase
7
 The Initiation phase begins by defining the

 Scope, purpose, objectives, resources, deliverables, timescales and structure
of the project.
 The next step is to develop a Business Case, including several possible
solutions and a cost/benefit analysis for each.
 A Feasibility Study should then be carried out to ensure that the chosen
solution is feasible and has an acceptable level of risk.
 The next step is to define the Terms of Reference, followed by the appointment
of the Project team.
 The final step is to carry out Phase Review before seeking approval to proceed.

Planning Phase
8
 Planning is the process of thinking systematically about the future in order to

decide what our goals are, and how we are going to achieve them.
 Thus planning involves making preparations, and deciding the best course of
action for a project.
 The first step of the Planning phase is the creation of a detailed Project
Plan which the project manager will refer throughout the project to monitor
and control time, cost and quality.
 The project manager will then create the following plans:
 Resource Plan: to identify the staffing, equipment and materials needed
 Financial Plan: to quantify the financial expenditure required
 Quality Plan: to set quality targets and specify Quality Control methods
 Risk Plan: to identify risks and plan actions needed to minimise them
 Acceptance Plan: to specify criteria for accepting deliverables
 Finally, a Phase Review is carried out to approve the start of the Project Execution
phase.

Execution Phase
9
 During the Project Execution phase the project team produces the deliverables
while the project manager monitors and controls the project delivery by
undertaking:
 Time Management: tracking and recording time spent on tasks against the Project
Plan
 Cost Management: identifying and recording costs against the project budget
 Quality Management: reviewing the quality of the deliverables and management
processes
 Change Management: reviewing and implementing requests for changes to the
project
 Risk Management: assessing the level of project risk and taking action to minimize
it
 Issue Management: identifying and resolving project issues
 Acceptance Management: identifying the completion of deliverables and gaining
the customers acceptance
 Communications Management: keeping stakeholders informed of project
progress, risks and issues

Closure Phase
10
 Once the customer has accepted the deliverables and a Phase

Review has been carried out to determine whether the project
objectives have been achieved, the project is ready for Closure.
 A Project Closure Report should list all of the actions required.
 When this has been approved, the listed actions are completed to
release project resources, hand over deliverables, and inform all
stakeholders that the project is now closed.

Evaluation
11
 Shortly after the project has been closed, an Evaluation (also

known as a Post-Implementation Review) should be carried out
to determine the project's overall success and find out whether the
benefits stated in the original Business Case were actually
realised.
 Any lessons learned should be documented for future projects.

Work Breakdown Structure (WBS)
12
1. The Project Management Body of

Knowledge (PMBOK) defines the work
breakdown structure as A deliverable
oriented hierarchical decomposition of
the work to be executed by the project
team.
2. The work breakdown structure visually
defines the scope into manageable
chunks that a project team can
understand.
3. Figure shows a sample WBS with three
levels defined.

WBS (Contd.)
13
 A work breakdown structure starts with

the project as the top level deliverable
and is further decomposed into sub-
deliverables
 The top level thus represents the final
deliverable or project
 The sub-deliverables are further
decomposed to the specific work
packages required to produce the sub-
deliverable.
 The work package represents the list of
tasks or "to-dos" to produce the specific
unit of work.

Definition of Activity and Event
14
 Activity is a single work step

(element) that has a Sequence of Activities for House construction project (Network diagram)
recognizable beginning and

end and requires time and
resource for its
accomplishment.
 An Event marks the point in
time when an activity
completes.
Note: Activity is often used as an

alternative term for task.

Time Management Process
15
 Time is the most valuable resource in a project.

 Every delivery that you are supposed to make is time-bound.
Therefore, without proper time management, a project can head
towards a disaster.
 Scheduling is the easiest way of managing project time.
 In this approach, the activities of the project are estimated and the
durations are determined based on the resource utilization for
each activity.
 Cost always plays a vital role in time management. This is due to
the fact that schedule over-runs are quite expensive.

Steps of the Time Management Process
16
 Time management is a key responsibility of a
project manager. Following are the main steps in
the project time management process:
1. Defining Activities
2. Sequencing Activities
3. Resource Estimating for Activities
4. Duration and Effort Estimation
5. Development of the Schedule
6. Schedule Control

Defining Activities
17
 First of all, the high-level requirements are broken down into

high-level tasks or deliverables.
 Then the high-level tasks/deliverables are broken down into
activities and presented in the form of WBS (Work Breakdown
Structure).

Sequencing Activities
18
 The activities
identified in the
previous step
should be
sequenced based
on the execution
order.
 When sequencing,
the activity
interdependencies
should be
considered.

Resource Estimating for Activities
19
 The estimation of amount and the types of resources

required for activities is done in this step.

Duration and Effort Estimation
20
 This is one of the key steps
in the project planning
process. Since estimates are
all about the time (duration),
this step should be
completed with a higher
accuracy.
 Once the activity estimates
are completed, critical path
of the project should be
identified in order to
determine the total project
duration. This is one of the
key inputs for the project
time management.

Development of the Schedule
21
 Activity sequence, duration of each activity and the resource

requirements/allocation for each activity are the most important
factors.
 In case if you perform this step manually, you may end up
wasting a lot of valuable project planning time. There are many
software packages, such as Microsoft Project, that will assist you
to develop reliable and accurate project schedule.
 As part of the schedule, you will develop a Gantt chart in order
to visually monitor the activities and the milestones.

An Example of a Construction Schedule
22

Schedule Control
23
 No project in the practical world can be executed without

changes to the original schedule.
 Therefore, it is essential to update the project schedule with
ongoing changes.

Work Breakdown Structure Video
24
This video demonstrates

how to create WBS using
MindView software

Further Reading
25
• Wysocki, R K, Effective Project Management, Wiley

• Heerkens, G R, Project Management, McGraw-Hill

Thank You
26

(GE 404)
LECTURE # 4
Scheduling and Bar Chart

Contents
2

 Planning and Scheduling
 Activity and Event
 Scheduling Techniques
 Bar Charts
 Critical Path and Critical Activities
 Problems
 Further reading

3
 To provide an overview of scheduling

 To discuss how to draw bar chart
 To discuss advantages and shortcomings of bar
charts

Planning and Scheduling
4
 Planning is the process of thinking systematically about the future

in order to decide what our goals are, and how we are going to
achieve them.
 Scheduling is the process showing relationship of activities and
determining of the project duration time and the project activities
starting and finishing timings.

Planning versus Scheduling
5
Planning Scheduling
 Planning can be thought of  In scheduling, this

as determining “what” is information is needed in
going to be done, including order to determine “when”.
“how”, “where,” and by  Scheduling consists of
“whom.” determining the time
 The majority of the work needed for each of the
associated with defining planned tasks and the
how the project effort will overall length of the project
proceed called “planning” schedule.

Purpose of Scheduling
6
 Ensure that all activities are planned

 Their order of performance is accounted for
 The activity time estimates are recorded
 The overall project time is developed

What we consider in Scheduling
7
 How long the project is expected to take?

 When each activity should be started and ended?
 How resources can be used properly?
 What are the critical bottlenecks in the project?

Project Scheduling Principles
8
 Project scheduling is carried out before a project begins

 It involves (1) identifying tasks, (2) estimating duration and
(3) allocating resources
 Once the project is underway, the schedule may need to be
revised based on initial progress
 The revision is done by creating milestones
 This ensures (1) cost estimates and (2) time constraints are
maintained at a specific level of quality and scope

Activity and Event
9
 Activity is a single work step

(element) that has a Sequence of Activities for House construction project (Network diagram)
recognizable beginning and

end and requires time and
resource for its
accomplishment.
 An Event marks the point in
time when an activity
completes.
Note: Activity is often used as an

alternative term for task.

Note
10
 Predecessor activities
mean coming before
 Successor activities mean
coming after
 The duration of an activity
is the time that will be
consumed in completing a
task
 Overlap the activities to
reduce the project time

Activity Duration
11
 One of the following tools and techniques can be used for

estimating the activity duration:
 Expert judgment
 Quantitative calculations
 Duration of activity (D) = Quantity of work / [Production rate of a
crew or equipment ×No. of crews]
Where production rate = Quantity produced in unit of time
 Duration of activity (D) = Quantity of work × Unit rate productivity of
a crew or equipment
Where unit rate productivity = Time needs to produce one unit of output
 Time unit (days, weeks etc.) is employed to specify activity
duration.

Scheduling Techniques
12
 Bar Charts and Linked Bar Charts

 Network Model (Analysis)
 Activity on arrow (AOA)
 Activity on node (AON)
 Precedence Diagram
 Line of Balance
 Time-location Diagram

Bar Charts
13
 Henry Gantt developed a method
of relating a list of activities to a
timescale in a very effective
manner, by drawing bar charts.
 Activities are presented as bars on
the chart, while across the top or
bottom of the chart is a time line.
 For each activity, a bar is drawn
from the activity’s starting time
until its ending time.
 Its primary advantage is that its Bar chart showing General Construction Work Tasks
simple graphic representation
allows one to grasp schedule The activity sequencing is for an apartment,
information quickly and easily. and one can easily see when each activity is to
 Bar charts are the most commonly begin and when is to be completed.
employed and readily recognized
scheduling models in use today.
Bar Charts (Contd.)
14
 This simple example shows at a

glance how the different activities
relate to each other.
 Note that the activities are time
scaled and have been
superimposed over a calendar.
 With the timescale presentation, a
bar chart shows operations and the
time consumed by each operation.
Bar chart showing General Construction Work Tasks

Use of Bar Chart in showing planned Scheduled versus Actual Progress
 Bar Chart can also show the scheduled

versus actual progress.
 The heavy-dashed vertical line
represents the current date, and the
shaded portions of the activities
indicate the amount of work that has
been completed by the current date.
 It is obvious that the project is slightly
behind schedule.
 The progress on the framing activity
has not met expectations.
 It is evident that the project can be
completed on time by accelerating the
Bar chart showing scheduled versus actual performance
work effort on framing, finishing
interiors, or both.
Adjustments to the schedule may be warranted
 This information is easy to grasp from
if the delay in project completion(about 1
this bar chart, and there is little chance
week) is not acceptable.
of misinterpretation.

Uses of Bar Chart
16
 Showing the order of the different activities

 Showing when operations should start and finish
 Checking what labor or equipment are needed and when
 Checking out delivery dates for materials
 Explaining to everyone concerned what and when is due to
happen
 Forecasting cash flow
 During execution, the chart can be used to control the work

Advantages of Bar Chart
17
 A major strength of bar charts is the ability to clearly

and quickly present the status of a project (rapid)
 No extensive training is required to learn how
to extract information from them (simple)

Shortcoming of Bar Charts
18
• Very cumbersome as the number of activities, increases

• Difficult to use for forecasting the effects of changes
• No indication where management attention should be
focused
• Ineffective for project shortening

Critical Path and Critical Activity
19
 Critical Path
Longest sequence of activities which

must be completed on time for
the project to complete on due date
 Critical Activity
 A critical activity is any activity that is on
the critical path. If there is a delay in any
of these activities then the whole project
will be delayed
 Note: An activity on the critical path cannot be

started until its predecessor activity is complete;
if it is delayed for a day the entire project will be
delayed for a day unless the activity following
the delayed activity is completed a day earlier.

How to identify critical path in a bar chart
20
 Start with the last activity

 Draw a vertical line from the ith node of the last activity
i j
 The activities whose j nodes touch the vertical line, are

potential critical activity
 Proceed in this manner until you reach time 0

Bar Chart for Building a Bridge
21

Bar Chart
22

Problem-1
23
Draw Gantt bar chart for a small Engineering project listed below and find
(a) Total duration of the project
(b) Critical activities
Activity Depends on Time (Weeks)
A None 4
B A 6
C B 7
D C 3
E None 3
F A, E 4
GE 201: Dr. N. A. Siddiqui 20-Jan-21

Solution
24
Activity
Durati
on 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21
(Wks)
A 4
B 6
C 7
D 3
E 3
F 4
Project Duration = 20 weeks Ans.

Critical Activities = A, B, C, and D. Ans.
Critical Path = A-B-C-D

Problem-2
25
For the following project draw Gantt bar chart if the project starts on
Monday 15/6/2015. Identify the critical activities and find the total duration
of the project in terms of number of (i) working days; and (ii) Calendar days.
Consider that workdays are six days a week (Saturday – Thursday).
Activity Depends on Time (days)
A None 2
B A 3
C None 3
D B,C 2
E C 1
F E,B 3
GE 201: Dr. N. A. Siddiqui 20-Jan-21

Solution
26
Act.
Dur. SAT SUN MON TUE WED THU FRI SAT SUN MON TUE WED THU FRI
A 2
B 3
C 3
D 2
E 1
F 3
Project Duration:
Calendar days = 9 Ans.
Working days = 8 Ans.
Critical Activities: A, B and F. Ans.

Software generated bar charts
27

Further Reading
28
Read more about the scheduling and bar charts from
Jimmie W. Hinze. “Construction Planning and Management,” Fourth

Edition, 2012, Pearson.

Thank You
29

(GE 404)
LECTURE # 5
Scheduling Networks- AON

Contents
2

 Activities versus events
 Duration versus Event
 Constraints
 Network Modeling Technique
 Steps in building a network model
 Early Start, Early Finish and
Early Finish and Early Start Times
 Float Times
 Developing AON Network
 Problems
 Further reading

3
 To provide an overview of CPM based Network

Modeling Techniques
 To discuss steps involved in drawing AON
network diagrams
 To discuss how to calculate Early/Late
Start/Finish Times
 To learn how to identify critical path in AON
network diagrams

Activities versus Events
4
Activities Events
 Activities consume time.  Events simply occur at a

point in time
 The point in time at which
an activity can start may be
considered an event
 The point in time or instant
at which an activity
is completed can also be
considered an event
Duration versus Event
5
Duration Event
 The duration of an activity  An event is the point in

is the period of time that time or an instant at which
will be consumed in the status of completion of
completing a task a project or activity can be
 The duration of the activity defined.
includes the time at which  The starting time for an
the activity begins and activity, which is also an
continues to the point in event, defines that point in
time at which it is time at which an activity
completed. can begin.

Constraints
6
 A number of different constraints must be acknowledged

by the project team. The common constraints are:
– Physical Constraints – Environmental Constraints

– Resource Constraints – Management Constraints
– Productivity Constraints – Contractual Constraints
– Safety Constraints – Regulatory Constraints
– Financial Constraints

Impact of Constraints
7
 Introduction of excessive constraints in network logic can have

the following impacts on a project:
 Reduce scheduling flexibility
 Lengthen project duration
 Generally increase project cost
 Confuse basic scheduling logic

Network Modeling Technique—CPM
8
 CPM is the most popular network modeling technique

 In CPM technique, each activity is assigned a specific duration and
calculations through the network provide a single, specific duration for
the project as a whole
 CPM identifies those chains of activities (the critical paths) in the
project that control how long the project will take
 There are two popular variations of CPM
 Activity-on-Arrow (A-on-A), or an arrow diagram
 This name is given to this traditional technique because activities are represented in the
network as arrows or lines
 Activity-on-Node or Precedence technique
 This method defines the activities as boxes (nodes in the network), which are connected
together by lines (links).
 This technique has got popularity because of the availability of microcomputer software,
which makes it very easy to use.

Steps in Building a Network Model
9
 Define activities
 Order activities
 Establish activity relationships; draw a network diagram
 Determine quantities; assign durations to activities
 Assign resources and costs
 Calculate early and late start/finish times
 Compute float values and identify the critical path
 Schedule activity start/finish times

Defining Activities
10
 Production/Construction Activities
 These are activities that relate directly to the physical effort of
creating the project
 These activities use traditional resources of labor and
materials
 Procurement Activities
 These activities include arranging for the acquisition of
materials, money, equipment, and workforce
 Management Activities
 Activities such as preparing inspection reports, processing
shop drawing approvals, tracking submittal approvals,
developing as-built drawings, providing certifications on
factory tests performed, and a variety of similar tasks.
Ordering Activities
11
 For each identified activity, the following must be determined:

 Which activities must precede it?
 Which activities must follow it?
 Which activities can be concurrent with it?

Assigning Durations to Activities
12
 The duration of an activity is the estimated time that will be required to

complete it
 Duration of the activity can be computed as:
Qunatity of work
 crew  hours  Duration (days)
qty/crew hour  Number of crews
 An alternative is to use historical Quantitative data from actual

projects the firm has previously undertaken

Early Start, Early Finish and
Late Finish and Late Start Times
13
 The "Early Start" (ES) or "Earliest Start" of an activity is the earliest

time that the activity can possibly start allowing for the time required
to complete the preceding activities.
 The "Early Finish" (EF) or "Earliest Finish" of an activity is the
earliest possible time that it can be completed and is determined by
adding that activity's duration to its early start time.
 The “Late Finish" (LF) or "Latest Finish" of an activity is the very
latest that it can finish and allow the entire project to be completed by
a designated time or date.
 The “Late Start” (LS) or "Latest Start" of an activity is the latest
possible time that it can be started if the project target completion date
is to be met and is obtained by subtracting the activity's duration from
its latest finish time.

Calculation of Early and Late times
14
Early Late
 Direction: Proceed from project end to project start,

 Direction: Proceed from project start to project
from right to left.
finish, from left to right.
 Name: This process is called the "forward pass".  Name: This process is called the “backward pass".
 Assumption: every activity will start as early as  Assumption: Each activity finishes as late as
possible. That is to say, each activity will start just possible without delaying project completion.
as soon as the last of its predecessors is finished.
 The LF value of each activity is obtained first and is
 The ES value of each activity is determined first.
entered into lower right portion of the activity box.
 The EF time is obtained by adding the activity
 The LS is obtained by subtracting the activity
duration to the ES time. EF = ES + D
duration from the LF value. LS = LF - D
 In case of merge activities the earliest
possible start time is equal to the latest (or  In case of burst activities LF value is equal
largest) of the EF values of the to the earliest (or smallest) of the LS times of
immediately preceding activities. the activities following.

Float Times —Free and Total Floats
15
 Float (or leeway) is a measure of the time available for a given activity above
and beyond its estimated duration.
 The free float of an activity is found by subtracting its earliest finish
time from the earliest start time of the activities directly following:
 FFi = Min. (ESj) - EFi
 The Total float of an activity is obtained by subtracting its ES time from its LS
time. Subtracting the EF from the LF gives the same result.
 Total float (TF) = LS - ES = LF - EF
 An activity with zero total float has no spare time and is, therefore, one of the
operations that controls project completion time.
 Activities with zero total float are called critical activities.

Free and Total Floats
16
Free Float or activity Float Total Float or Path Float
Free float is the amount of time Total float is the amount of time
that an activity’s completion time that an activity’s completion may
may be delayed without be delayed without affecting the
affecting the earliest start of earliest start of any activity on
succeeding activity the network critical path
Total float is shared by all
Free float is “owned” by an activities along a slack path
individual activity
Total path float time for activity
(i-j) is the total float associated
with a path

Activity Box
17
Duration Earliest
Earliest
Starting Finishing
Date Date
ES D EF Free Float
Activity
Predecessor ID FF Successor
LS TF LF
Latest Latest
Starting Total Finishing
Date Float Date
The format for activity box is not standardized, so one need only to
adopt a format that is comfortable for a particular application

Critical Activity and Critical Path
18
 Critical activity is quickly identified as one whose two start times at

the left of the activity box are equal. Also, equal are the two finish
times at the right of the activity box.
 The critical activities must form a continuous path from project

beginning to project end, this chain of critical activities is called the
Critical Path.
 The critical path is the longest path in the network.
 The critical path is normally indicated on the diagram in some

distinctive way such as with colors, heavy lines, or double lines.
 Any delay in the finish date of a critical activity, for whatever

reason, automatically prolongs project completion by the same
amount.

Subcritical paths
19
 Subcritical paths have varying degree of path float and hence depart
from criticality by varying amounts
 Subcritical paths can be found in the following way:

 Sort the activities in the network by their path float, placing those
activities with a common path float in the same group
 Order the activities within a group by early start time
 Order the groups according to the magnitude of their path float,
small values first

Activity-on-Node (AON) Network
20
 The most common type of network schedule in use today is the Activity-on-Node
 Activities are represented by nodes, drawn in any desired shape
 Lines represent “Activity links,” used to represent dependencies between activities
 The principal advantage of the activity on node network is that it eliminates the need
for dummies
The diagram is “read” from left to right

Developing AON Network
21
 The general developing of a network is from start to
finish, from project beginning on the left to project
completion on the right.
 A horizontal diagram format is the standard format
 The sequential relationship of one activity to another

is shown by the dependency lines between them.
 The length of the lines between activities has no
significance.
 Arrowheads are not always shown on the
dependency lines because of the obvious left to right
flow of time.
 Dependency lines that go backward from one
activity to another (looping) should not be used.
 Crossovers occur when one dependency line must
cross over another to satisfy job logic.
Note
22
 Each activity in the network must be preceded

either by the start of the project or by the
completion of a previous activity.
 Each path through the network must be continuous

with no gaps, discontinuities, or dangling activities.
 All activities must have at least one activity

following, except the activity that terminates the
project.
 Each activity should have a unique numerical

designation (activity code).
 Activity code is shown in the central part of the

activity box, with the numbering proceeding
generally from project start to finish.

Problem-1
23
The activity list shown below represents the activities, the job logic and the activities’
durations of a small project. Draw an activity on node network to represent the project.
Activity Depends on Duration (days)

A D 4
B R 5 ES t EF
C D 8 Activity
E R, S 7 LS TF LF
F B, C 3
D None 4
S A, C 2
R A, C 9

Solution ES t EF
Activity
Step-1: Draw Activity diagram
LS TF LF
24
4 2 When you have to draw an activity diagram.
Pick the first activity and then see on which it
A S depends and then see on which these (i.e.
predecessors) depend. For example, to draw
activity A, see activity D then see on which
activity D depends and so on.
4 7 0
D E END
8 9 5 3
C R B F

Step-2: Calculate ES and EF
EF = ES + D
and Project duration
25
In forward pass you
may encounter merge
4 4 8 12 2 14 activities (e.g. S and R
are merging to E)
A S whereas in backward
pass you can encounter
Largest EF burst activities (e.g. A
and C are bursting
from D)
0 4 4 21 7 28 29 0 29
D E END
4 8 12 12 9 21 21 5 26 26 3 29
C R B F

Step-3: Calculate LS and LF
26
4 4 8 12 2 14 LS = LF - D
A S
8 12 20 22
0 4 4 21 7 28 29 0 29
D E END
0 4 22 29 29 29
4 8 12 12 9 21 21 5 26 26 3 29
C R B F
4 12 12 21 21 26 26 29
Smallest LS
Step-4: Calculate Total Float
27
Total float (TF) = LS - ES = LF - EF
4 4 8 12 2 14
A S
8 4 12 20 8 22
0 4 4 21 7 28 29 0 29
D E END
0 0 4 22 1 29 29 0 29
4 8 12 12 9 21 21 5 26 26 3 29
C R B F
4 0 12 12 0 21 21 0 26 26 0 29
Step-5: Identify Critical Path
28
4 4 8 12 2 14
A S
8 4 12 20 8 22
0 4 4 21 7 28 29 0 29
D E END
0 0 4 22 1 29 29 0 29
4 8 12 12 9 21 21 5 26 26 3 29
C R B F
4 0 12 12 0 21 21 0 26 26 0 29

Problem-2
29
Draw AON diagram to represent the following project. Calculate occurrence times
of events (i.e. activity times), and activity and path floats. Also determine the
critical path and the degree of criticality of other float paths.
Activity Preceding Activity Time (days)

A None 5
B A 7
C A 4
ES t EF
D A 8 Activity
E B 6 LS TF LF
F D 8
G E, C, F 3
H G 4
I G 6
Solution
Step 1: Activity on node network
30
5 7 12 12 6 18 24 4 28
B E H
8 3 15 15 3 21 26 2 30
0 5 5 5 4 9 21 3 24 30 0 30
A C G END
0 0 5 17 12 21 21 0 24 30 0 30
5 8 13 13 8 21 24 6 30
D F I
5 0 13 13 0 21 24 0 30

Step 2: Activity times and activity floats
31
Activity ES EF LF LS TF FF
A 0 5 5 0 0 0
B 5 12 15 8 3 0
C 5 9 21 17 12 12
D 5 13 13 5 0 0
E 12 18 21 15 3 3
F 13 21 21 13 0 0
G 21 24 24 21 0 0
H 24 28 30 26 2 2
I 24 30 30 24 0 0

Step 3: Critical path and subcritical paths
32
Activity ES EF LF LS TF Criticality
A 0 5 5 0 0
D 5 13 13 5 0
F Critical Path
13 21 21 13 0
G 21 24 24 21 0
I 24 30 30 24 0
H 24 28 30 26 2 a “near critical” path
B 5 12 15 8 3 Third most critical path
E 12 18 21 15 3
C 5 9 21 17 12 Path having most float

Problem-3
33
The activity list shown below represents the activities, the job logic and the activities’
durations of a small project. Draw an activity on node network to represent the project.
Activit Immediate Time

y Description Predecessors (weeks)
A Build internal components — 2
B Modify roof and floor — 3
C Construct collection stack A 2
D Pour concrete and install frame A, B 4 ES t EF
Activity
E Build high-temperature burner C 4
LS TF LF
F Install pollution control system C 3
G Install air pollution device D, E 5
H Inspect and test F, G 2

Solution
Step-1: Draw Activity diagram
34
2 2 3
A C F
2
0 4 H
Start E
3 4 5
B D G

and Project duration
35
0 2 2 2 2 4 4 3 7
A C F
ES
13 2 15
0 0 0 4 4 8 H
Start E MAX(EF of
Preceding
activities 7,8)
0 3 3 3 4 7 8 5 13
B D G

36
LS = LF - D
0 2 2 2 2 4 4 3 7
A C F
0 2 2 4 10 13
13 2 15
0 0 0 4 4 8 H
LF = Min(LS of
Start activities 4,10) E 15
13
0 0 4 8
LF = EF
0 3 3 3 4 7 8 5 13 of Project
B D G
1 4 4 8 8 13

Step-4: Calculate Total Float
37
Total float (TF) = LS - ES = LF - EF
Slack = LS – ES or
Slack = LF – EF
0 2 2 2 2 4 4 3 7
A C F
0 0 2 2 0 4 10 6 13
13 2 15
0 0 0 4 4 8 H
Start E 13 0 15
0 0 0 4 0 8
LF = EF
0 3 3 3 4 7 8 5 13 of Project
B D G
1 1 4 4 1 8 8 0 13

Step-5: Identify Critical Path
38
0 2 2 2 2 4 4 3 7
A C F
0 0 2 2 0 4 10 6 13
13 2 15
0 0 0 4 4 8
H
Start E 13 0 15
0 0 0 4 8
0
0 3 3 3 4 7 8 5 13
B D G
1 1 4 4 1 8 8 0 13

Step-6: Calculate Slack Time (Float Time)
39
Earliest Earliest Latest Latest On

Start Finish Start Finish Slack Critical
Activity ES EF LS LF LS – ES Path
A 0 2 0 2 0 Yes
B 0 3 1 4 1 No
C 2 4 2 4 0 Yes
D 3 7 4 8 1 No
E 4 8 4 8 0 Yes
F 4 7 10 13 6 No
G 8 13 8 13 0 Yes
H 13 15 13 15 0 Yes

GANTT CHART SCHEDULE
(ES –EF )
ACTIVITY 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
A Build internal components
C Construct collection stack
E Build high-temperature burner
G Install air pollution device
H Inspect and test
B Modify roof and floor
D Pour concrete and install frame
F Install pollution control system
GANTT CHART SCHEDULE

(LS –LF )
ACTIVITY 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
A Build internal components
C Construct collection stack
E Build high-temperature burner
G Install air pollution device
H Inspect and test
B Modify roof and floor
D Pour concrete and install frame
F Install pollution control system

Calendar Date Schedule
41
 Activity times (ES, EF, LS, LF) obtained from previous

calculations are expressed in terms of expired working
days.
 For purposes of project directing, monitoring and
control, it is necessary to convert these times to calendar
dates on which each activity is expected to start and
finish.
 This is done with the aid of a calendar on which the
working days are numbered consecutively, starting with
number 1 on the anticipated start date and skipping
weekends and holidays.

Advantages and Disadvantages of Network Diagram
42
Advantages
 Show precedence well
 Reveal interdependencies not shown in other techniques
 Ability to calculate critical path
 Ability to perform “what if” exercises
Disadvantages
 Default model assumes resources are unlimited
 You need to incorporate this yourself (Resource Dependencies) when
determining the “real” Critical Path
 Difficult to follow on large projects

Note (a Constraint)
43
 Question:
 The last activity in a chain has no successor (there is only the project end
date) and this activity has some positive number as a Total Float value.
 What should be the Free Float value for this activity ?
 Answer:
 Good scheduling practice requires an end Milestone for the project. The
last activity should have a successor (i.e., the Milestone) and every activity
should be able to trace a link form its successor to this Milestone.
 If the Milestone has float, the FF and TF are equal; the constraint acts as
the successor.
 This construct would also mean the critical path as a positive float value.
 Note: This situation should be considered as constraint that project
duration is different from EF time of the last activity (calculated through
forward pass calculation).
 The critical path in such case is that path which has minimum total float.

Alternative definitions of FF and TF
44
https://www.youtube.com/watch?v=YboHkzVphzs

Further Reading
45
Read more about the scheduling network models from:


Thank You
46

‫بسم ﷲ الرحمن الرحيم‬
(GE 404)
LECTURE # 6
Scheduling Networks—Precedence Diagramming

2
 To explain how to draw Precedence network

diagrams
 To discuss how to calculate Early/Late
Start/Finish Times in Precedence Network
diagrams

Precedence Diagramming
3
 Precedence diagramming is an extension to the original Activity-On-Node

concept.
 Precedence diagramming includes precedence relationships among the
activities.
 In addition, one may specify a “lag time” associated with any of the
precedence relationships.
 A successor "lags" a predecessor, but a predecessor "leads" a successor.
 Lag time can be designated on a dependency line with a positive, negative, or

zero value.
 The prime relationship used in PERT/CPM network is Finish-to-start type of
dependency, with FSij = 0 .

Activity Relationships
4
 Finish-to-Start (FS)
 In a finish-to-start relationship, the start of an activity depends on the completion of its
preceding activity.
 Example: Footing excavation must be completed prior to placing concrete for the footing
 Start-to-Start (SS)
 In a start-to-start relationship, an activity can not start before its preceding activity starts
 Example: Project management activities can not start before the Project work starts
 Finish-to-Finish (FF)
 In a finish-to-finish relationship, the two activities are related by the fact that they must be
completed at the same time
 Example: In a simple task of setting a flagpole, the backfilling task and the positioning the
pole task will be finished at the same time.
 Start-to-Finish (SF)
 In start-to-finish relationship, the finish of an activity depends on the start of its preceding
activity (A rare relationship)
 Example: In a Hospital emergency, the previous shift can not finish before the new shift starts
 Say you’re building a new gas pipeline. You would first finish construction and implementation of the new pipeline before you would
begin shutting down and breaking down the old pipeline.
Lag
5
 The amount of time that exists between the early finish of an

activity and the early start of a specified succeeding activity
 Calculate lags for each link by determining the difference
between the ES of each activity following a link line and the EF
of the activity that precedes it
 Limitations and Disadvantages of Lag:

 Lag would complicate the scheduling process
 Lags are not extensively used except where the time effects
are substantial for special project type

Finish-to-Start Activity Precedence Relationships
with Lag Values
6
FSij FSjk
Activity i Activity j Activity k
Note : lag ij  FS ij and lag jk  FS jk
ES j  EFi  FSij LS i  LFi  Di

EF j  ES j  D j LFi  LS j  FSij

Start-to-Start Activity Precedence Relationships with
Lag Values
7
Activity i
SSij Activity j
Note : lagij  SSij and lag jk  SS jk

SSjk Activity k
ES j  ESi  SSij LS i  LS j  SSij

EF j  ES j  D j LFi  LS i  Di  LS j  SSij  Di
Finish-to-Finish Activity Precedence Relationships
with Lag Values
8
Activity i FFij
FFjk
Note : lagij  FFij and lag jk  FF jk Activity j
EF j  EFi  FFij Activity k

ES j  EFi  FFij  D j  EF j  D j
LS i  LF j  FFij  Di  LFi  Di
LFi  LF j  FFij
Start-to-Finish Activity Precedence Relationships
with Lag Values
9
Note : lagij  SFij and lag jk  SF jk Activity i

SFij
Activity j
SFjk
Activity k
EF j  ESi  SFij LS i  LF j  SFij
ES j  ESi  SFij  D j  EF j  D j LFi  LF j  SFij  Di  LS i  Di

Note on SFij
10
 Activity j cannot finish till i Example
starts (rare)  For the shown diagram
 SFij is equal to the minimum calculate total lag if
number of time units that SFij'  4 and SFij''  6
must transpire from the start
of the predecessor i to the SFij'
completion of the successor i
j. j
SFij''
SFij  SFij'  SFij''  4  6  10

The finish of j must lag 10
units after the start of i
Summary
11
Finish-to-Start Relationships with Lag Values FSij :
ES j  EFi  FSij LFi  LS j  FSij

Start-to-Start Relationships with Lag Values SSij :
ES j  ESi  SSij LFi  LS j  SSij  Di

Finish-to-Finish Relationships with Lag Values FFij :
ES j  EFi  FFij  D j LFi  LF j  FFij

Start-to-Finish Relationships with Lag Values SFij :
ES j  ESi  SFij  D j LFi  LF j  SFij  Di

Generalized Equations
12
FORWARD PASS COMPUTATIONS BACKWARD PASS COMPUTATIONS
 Terminal Time 
 Initial Time   
   LS j  FSij 
 EFi  FSij 
LFi  Min(all j ) LF j  FFij 
ES j  Max(alli ) ESi  SSij   
   LS j  SSij  Di 
 EFi  FFij  D j   LF  SF  D 
 ES  SF  D   j ij i 
 i ij j 
EF j  ES j  D j LS i  LFi  Di

Composite Start-to-Start and Finish-to-Finish (ZZij)Activity
Precedence Relationships with Lag Values
13
ZZij is a combination of two constraints, i.e., a start-to-start and

finish-to-finish relationship. It is written with the SSij time units
first, followed by the FFij time units.
Example: ZZij =5, 6
The start of activity j must lag 5 units after the start of activity i & The finish of
activity j must lag 6 units after the finish of activity i

Representation
14
SS ij
FF ij
FS ij
ES Duration EF ES Duration EF
SF ij
Activity (i) ZZ ij ( SS ij  FF ij ) Activity (j)
Constraints with lag/lead Durations LS Total Float LF
LS Total Float LF

Free and Total Floats in Overlapping Networks
15
Free Float of an activity can be defined as time span in which the

completion of the controlling date of an activity may occur and not delay
the termination of the project nor delay the early status of the following
activity.
 ES j  EFi  FSij 
 
 ES j  ESi  SSij 
FFi  Min(all j )
EF j  EFi  FFij 
 
 EF  ES  SF 
 j i ij 
Total float (TF) equation is same as it was developed for the single
relationship network.

Problem-1
16
For the given precedence diagram, complete the forward and backward pass calculations.
Assume the project starts at T=0, and no splitting on activities is allowed. Also assume that
the project latest allowable completion time (project duration) is scheduled for 30 working
days.
D F
Test & debug SF 12 Document
program program
(D=6) (D=12)
A B
Develop SS 3 Write comp. FS 0
system spec. FF 4 program
(D=8) (D=12) SS 6
C E
ES D EF
Collect FS 0 Run
Activity ID
system data program
LS TF LF (D=4) (D=6)

Solution ES D EF
Activity ID
Step-1: Network diagram LS TF LF
17
6 12
D F
8 12 0
A B END
4 6
C E

Step-2: Forward Pass Computations
18
 Initial Time 
 EF  FS 
 i ij 
[1]ES j  Max ( alli )  ES i  SS ij 
 EF  FF  D 
 i ij j

 ES i  SFij  D j 
[ 2]EF j  ES j  D j
Activity A ES  Initial Time  0

A
EF  ES D  08 8
A A A
 Initial Time  0 
 
Activity B ES B  Max ( A)  ES A  SS AB  0  3  3 
 EF  FF  D  8  4  12  0 
 A AB B 
EFB  ES B  D B  3  12  15
 Initial Time  0 
Activity C ES C  Max ( B )  
 ES B  SS BC  3  6  9 
EF  ES  D  9  4  13
C C C
 EF  FS 
 i ij 
[1]ES j  Max ( alli )  ES i  SS ij 
 EF  FF  D 
 i ij j

 ES i  SFij  D j 
[ 2]EF j  ES j  D j
 Initial Ti me  0 
ES  Max(B)  
D  EF B  FS BD  15  0  15 
Activity D
EF  ES  D  15  6  21
D D D
 EF  FS  21  0  21 
ES  Max ( C , D )  D DE 
E
 OR , EF  FS  13  0  13 
Activity E  C CE 
EF  ES  D  21  6  27
E E E
 ES  SF  D  15  12  12  15 
ES F  Max ( D )  D DF F 
Activity F OR , EF C  FS CF  13  0  13 
EF F  ES F  D F  15  12  27

Contd.
20
15 6 21 15 12 27
SF 12
D F
0 8 8 3 12 15 27 0 27
SS 3 FS 0
A FF 4 B END
SS 6
9 4 13 21 6 27
C FS 0 E

Step-3 Backward Pass Computations
Terminal Time 
LF  Terminal Time  30  LS  FS 
F  j ij 
Activity F LS  LF  D  30  12  18
F F F
[3]LFi  Min(all j ) LF j  FFij 
 LS  SS  D 
 j ij i

 LF j  SFij  Di 
Activity E LF E  Terminal Time  30
[4]LS i  LFi  Di
LS E  LF E  D E  30  6  24
 Terminal Time  30 
 LS E  FS DE  24  0  24 
Activity D LFD  Min( E , F ) 
 or 
LFF  SFDF  DD  30  12  6  24
LS D  LFD  DD  24  6  18
15 6 21 15 12 27
SF 12
D F
0 8 8 3 12 15 18 3 24 18 3 30 27 0 27
SS 3 FS 0
A FF 4 B END
SS 6
9 4 13 21 6 27 30 3 30
C FS 0 E
24 3 30

Terminal Time
 Terminal Time  30   LS  FS 
 LS E  FS CE  24  0  24   j ij 
LFC  Min ( E , F ) or  [3]LFi  Min(all j ) LF  FF
Activity C  
j
 LS  SS  D 
ij 
 LS F  FS CF  18  0  18   j ij i

LS C  LFC  DC  18  4  14  LF j  SFij  Di 
[4]LS i  LFi  Di
 TerminalTime  30 
 LS  FS  18  0  18 
 D BD 
LF  Min( ) 
B C, D OR
 
Activity B LS  SS  D  14  6  12  20
 C BC B 
LS  LF  D  18 12  6
B B B
 
LF  Min ( )  LF  FF  18  4  14
Activity A A B B
 LS  SS
AB 
 D  6  3  8  11 
 B AB A 
LS  LF  D  11  8  3
A A A
15 6 21 15 12 27
SF 12
D F
0 8 8 3 12 15 18 3 24 18 3 30 27 0 27
SS 3 FS 0
A FF 4 B END
SS 6
3 3 11 6 3 18 9 4 13 21 6 27 30 3 30
C FS 0 E
14 5 18 24 3 30
Step 4: Slack time (Float time)
23
Earliest Earliest Latest Latest On

Start Finish Start Finish Slack Critical
Activity ES EF LS LF LS – ES Path
A 0 8 3 11 3 Yes
B 3 15 6 18 3 Yes
C 9 13 14 18 5 No
D 15 21 15 21 3 Yes
E 21 27 24 30 3 Yes
F 15 27 18 30 3 Yes
Critical path is the path with the least total float = The longest path through the
network.
CP1: A-B-D-E, CP2: A-B-D-F ;

Critical Activities: A, B, D, E, and F
Problem-2
24
Given the precedence network for a small engineering project with activity durations in
working days, it is required to compute the activity times (ES, EF, LS, and LF) and total
floats (TF) and then indicate the critical activities.
3 8 5
C FF 5 F FS 3 I
SS 8
5 10 6 10
A FS 2 D ZZ 3,2 J FF 5 L
SF 3,4 FS 4
SS 5 4 13 7
E FS 0 H K

Solution
25
8 3 11 8 8 16 19 5 24
C FF 5 F FS 3 I
SS 8
0 5 5 7 10 17 13 6 19 24 10 34
SF 3,4 FS 4
SS 5 5 4 9 9 13 22 9 7 16
E FS 0 H K

26
8 3 11 8 8 16 19 5 24
C FF 5 F FS 3 I
8 11 8 16 19 24
SS 8
0 5 5 7 10 17 13 6 19 24 10 34
0 5 17 27 23 29 24 34
SF 3,4 FS 4
SS 5 5 4 9 9 13 22 9 7 16
E FS 0 H K
9 13 13 26 13 20

Step-3: Calculate Total float
27
8 3 11 8 8 16 19 5 24
C FF 5 F FS 3 I
8 0 11 8 0 16 19 0 24
SS 8
0 5 5 7 10 17 13 6 19 24 10 34
0 0 5 17 10 27 23 10 29 24 0 34
SF 3,4 FS 4
SS 5 5 4 9 9 13 22 9 7 16
E FS 0 H K
9 4 13 13 4 26 13 4 20

Step 4: Indicate critical activities
28
8 3 11 8 8 16 19 5 24
C FF 5 F FS 3 I
8 0 11 8 0 16 19 0 24
SS 8
0 5 5 7 10 17 13 6 19 24 10 34
0 0 5 17 10 27 23 10 29 24 0 34
SF 3,4 FS 4
SS 5 5 4 9 9 13 22 9 7 16
E FS 0 H K
9 4 13 13 4 26 13 0 20

Problem-3
29
Given below the precedence network for a small engineering project with activity
durations in working days. Compute the activity times (ES, EF, LS, and LF), total floats
(TF) and free floats. Also indicate the critical activities and find the critical path.
LEGENDS
ES D EF
3 SF,2 2 Act FF
B D LS TF LF
3
SS, 2 F
5
A
FF,1
6 6
C FS,1 E

Solution
 EF  FS 
 i ij 
[1]ES j  Max ( all i ) ES i  SS ij 
Step-1: ES and EF Calculations  EF  FF  D 
 i ij j
 ES i  SFij  D j 

[ 2]EF j  ES j  D j
30
ES A  Initial time  0 EFA  ES A  DA  0  5  5
 Initial Time  0  EFB  ES B  DB  2  3  5
ES B  Max( A)  2
 ES A  SS AB  0  2  2
 Initial Time  0  EFC  ES C  DC  0  6  6
ESC  Max( A)  0
EF
 A  FF AB  DC  5  1  6  0 
 Initial Time  0  EFD  ES D  DD  2  2  4
ES D  Max( B ) 2
 ES B  SFBD  DD  2  2  2  2
 Initial Time  0  EFE  ES E  DE  7  6  13
ES E  Max(C ) 7
 EFC  FSCE  6  1  7
 EF  FS  4  0  4  EFF  ES F  DF  13  3  16
ES F  Max( D, E ) D DF   13
 EFE  FS EF  13  0  13

Terminal Time 
 LS  FS 
 j ij 
[3]LFi  Min(all j ) LF j  FFij 
Step-2: LF and LS Calculations  LS  SS  D 
 j ij i
 LF j  SFij  Di 

[4]LSi  LFi  Di
31
LFF  Terminal time  16 LS F  LFF  DF  16  3  13
LFE  Min ( F )   13 LS E  LFE  DE  13  6  7
 LS F  FS EF  13  0  13
LFC  Min ( E ) 6 LS C  LFC  DC  6  6  0
 LS E  FSCE  7  1  6
LFD  Min ( F )   13 LS D  LFD  DD  13 - 2  11
LS
 F  FS DF  13  0  13
LFB  Min ( D)   14 LS B  LFB  DB  14 - 3  11
LF
 D  SFBD  DB  13  2  3  14 
 LS  SS  D  11  2  5  14
LFA  Min ( B, C ) B AB A 5 LS A  LFA  DA  5 - 5  0
 LFC  FFAC  6  1  5 
Contd.
32
2 3 5 SF,2 2 2 4
B D
11 9 14 11 9 13
13 3 16
SS, 2 F
13 0 16
0 5 5
A
0 0 5
FF,1
0 6 6 7 6 13
C FS,1 E
0 0 6 7 0 13

 ES j  EFi  FSij 
 
 ES j  ESi  SSij 
Step-3: FF Calculations FFi  Min(all j )
EF  EFi  FFij 
 j 
 EF  ES  SF 
 j i ij 
33
 ES B  ES A  SS AB  2  0  2  0
FFA  Min ( B, C ) 0
 EFC  EFA  FFAC  6  5  1  0 
FFB  EFD  ES B  SFBD  4 - 2 - 2  0
FFC  ES E  EFC  FS CE  7 - 6 - 1  0
FFD  ES F  EFD  FS DF  13 - 4 - 0  9
FFE  ES F  EFE  FS EF  13 - 13 - 0  0

Final Answer
34
2 3 5 SF,2 2 2 4
B 0 D 9
11 9 14 11 9 13
13 3 16
SS, 2 F 0
13 0 16
0 5 5
A 0
0 0 5
FF,1
0 6 6 7 6 13
C 0 FS,1 E 0
0 0 6 7 0 13
Critical Activities: A; C; E; and F

Critical Path: A-C-E-F

Hammock Activity
35
 An activity that extends from one activity to another, but which has no
estimated duration of its own.
 It is time-consuming and requires resources, but its duration is
controlled, not by its own nature, but by the two activities between
which it spans.
 Example: activity “A” ends on day 3 and activity “C” begins on day 10 and there is
a set of activities that are summarized as activity “B” (the hammock activity) that
must be done between activity “A” and activity “C.”
 Activity “B” doesn’t have a specific duration—it has the duration of the time
between day 3 and day 10.
 If activity “A” takes longer than expected and ends on day 4, then the duration of
activity “B” is now the duration of time between day 4 and day 10.
 Its ES and LS times are determined by the activity where it begins and
its EF and LF times are dictated by the activity at its conclusion.

Milestones
36
 Milestones are points in time that have been identified as being

important intermediate reference points during the
accomplishment of the work
 Milestone events can include dates imposed by the customer for

the finishing of certain tasks as well as target dates set by the
project manager for the completion of certain segments of the
work.
 Distinctive geometric figure is preferred to represent a milestone

(circles, ovals, or other shapes can be used).

Shortening of Project Duration
37
 Reducing scope (or quality)

 Adding resources
 Concurrency (perform tasks in parallel)
 Substitution of activities

Further Reading
38
Read more about the scheduling network models from:
1. Moder J., Phillips, C., and Davis, E. Project Management with CPM,
PERT, and Precedence Diagramming, 3rd Edition.
2. Jimmie W. Hinze. “Construction Planning and Management,” Fourth

Thank You
39

(GE 404)
LECTURE # 7
Time-Scaled Diagram and Resource Leveling

Contents
2

 Time Scale Network
 Advantages and Disadvantages
 Management of Resources—Resource Leveling
 Resource Leveling (Smoothing) Procedures
 Burgess Leveling Procedure
 Estimated Method
 Problems
 Further reading

3
 To discuss steps involved in drawing the Time-

scaled network diagrams
 To discuss how to carry out resource leveling
using time-scaled diagrams

Time-Scaled Networks
4
 Time-scaled networks are merely extension of bar charts

 Each activity is shown as a one dimensional line rather than as a
two dimensional box
 The horizontal length is equal to its estimated time duration
(beginning at its ES and ending with its EF values)
 Vertical solid (or dashed) lines indicate sequential dependence
of one activity on another
 Float times are shown as horizontal dashed lines

Free and Total Floats
5
Free Float or activity Float Total Float or Path Float
Free float is the amount of time Total float is the amount of time
that an activity’s completion that an activity’s completion
time may be delayed without may be delayed without affecting
affecting the earliest start of the earliest start of any activity
succeeding activity on the network critical path
Total float is shared by all
Free float is “owned” by an activities along a slack path
individual activity
Total path float time for activity
(i-j) is the total float associated
with a path

Advantages and Disadvantages
6
Advantages
 Very suitable device for checking daily project needs of different
resources, and for the advance detection of conflicting demands among
activities for the same resource
 Useful for project financial management applications
Disadvantages
 Because it is drawn by manual drafting methods, the level of effort
needed to modify and update them is very large
 Dependencies among activities are not always so obvious as they are
on the activity on node network.

Problem-1
7
The following activity list represents the job logic and the durations of activities for a
market survey project. Draw a time- scaled network for the project, determine project
time and calculate the activities float times.
Activity Description predecessors Duration, week

A Plan survey — 1
B Hire personnel A 1
C Design questionnaire A 3
D Train personnel B, C 2
E Select samples of customers C 1
F Print questionnaire C 1
G Conduct survey D,E,F 3
H Analyze results G 2

Solution
8
• Project completion time = 11 working days

• Critical Path: A-C-D-G-H.
Activity A B C D E F G H
Total float 0 2 0 0 1 1 0 0
Free float 0 2 0 0 1 1 0 0

Activity Depends on Duration (day)
E B, C 2
B A 3
Problem-2 G
C
F
A
E
C, D
4
3
5
A None 2
H E, F 2
D A 5
I F 4
J G, H, I 2
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
 Project completion time = working days

 Critical Path:
Activity A B C D E F G H I J
Total float
Free float
Activity Depends on Duration (day)
E B, C 2
B A 3
Problem-2 G
C
F
A
E
C, D
4
3
5
A None 2
H E, F 2
D A 5
I F 4
J G, H, I 2
B E G
A D F I J
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
 Project completion time = 18 working days

 Critical Path: A, D, F, I, J.
Activity A B C D E F G H I J
Total float 0 6 1 0 5 0 5 2 0 0
Free float 0 1 0 0 0 0 5 2 0 0
Management of Resources—Resource Leveling
11
 Resource leveling is a technique to

reduce the amount of variability
(peak and valley) in the pattern of
resource usage (manpower,
equipment, or money) over the
project duration.
 Resource leveling ensures that
resource demand does not exceed
resource availability.
 Main Aspects:
 Sufficient total resources are available
 Project must be completed by a specified
due date, in other words, project
duration is not allowed to increase

Contd.
12
Improvements can be made to the level
of resource requirements by:
 Delaying or bringing forward the
start of certain activities
 Extending the duration of certain
activities and so reducing the demand
for resources over the duration of the
activity or by a combination of both
of these adjustments
 Note: Time-scale network or bar chart
is generally used for resource
leveling. The reason for this is that
resource leveling must be considered
within a time framework and Time-
scale network or bar charts are
drawn to a time scale while other
networks (e.g. AON etc.) are not.

Resource Leveling (Smoothing) Procedures
13
 Although the sum of daily resource requirements over the project

duration is constant, but the sum of the squares of the daily
requirements decreases as the peaks and valleys are leveled.
 Burgess method utilizes a simple measure of effectiveness given by the
Sum of the squares of the resource requirements for each “day”
(period). This value reaches a minimum for a schedule that is level and
equals
Eff  ( DR) 2  D
where;
Eff  Effectiveness
DR  Average daily requirement
D  Project duration
Note: R in the figure is the same as DR in the equation

Burgess Leveling Procedure
(Steps 1-4)
14
1. List the project activities in order of precedence. Add to this listing the
duration, early start, and float (slack) values for each activity
2. Starting with the last activity, schedule it period by period to give the
lowest sum of squares of resource requirements for each time unit. If more
than one schedule gives the same total sum of squares, then schedule the
activity as late as possible to get as much slack as possible in all preceding
activities.
3. Holding the last activity fixed, repeat Step 2 on the next to the last activity in
the network, taking advantage of any slack that may have been made available
to it by the rescheduling in Step 2.
4. Continue Step 3 until the first activity in the list has been considered; this
completes the first rescheduling cycle.

Burgess Leveling Procedure
(Steps 5-8)
15
5. Carry out additional rescheduling cycles by repeating Steps 2 through 4

until no further reduction in the total sum of squares of resource
requirements is possible, noting that only movement of an activity to the
right (schedule later) is permissible under this scheme.
6. If this resource is particularly critical, repeat Steps 1 through 5 on a

different ordering of the activities. which, of course, must still list the
activities in order of precedence.
7. Choose the best schedule of those obtained in Steps 5 and 6.
8. Make final adjustments to the schedule chosen in Step 7, taking into

account factors not considered in the basic scheduling procedure.

Problem-2
16
Time-scaled network is given below with the resource demands of each activity
on each day. Using Burgess leveling procedure, level the resources.

Solution
17
Time 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
A C I J K
3 3 3 3 3 3 3 3 3 3 3 3 3 4 4 5 5 5
D E
4 4 2 2 2
F
1 1 1
B G H
2 2 2 2 2 3 3 3 3 2 2 2 2 2
R 5 5 5 9 9 9 9 9 6 5 5 5 5 6 4 5 5 5
ΣR 5 10 15 24 33 42 51 60 66 71 76 81 86 92 96 101 106 111

1st Trial with activity H
18
Start with Delay activity “H” one period
Time 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
A C I J K
3 3 3 3 3 3 3 3 3 3 3 3 3 4 4 5 5 5
D E
4 4 2 2 2
F
1 1 1
B G H
2 2 2 2 2 3 3 3 3 2 2 2 2 2
R 5 5 5 9 9 9 9 9 6 3 5 5 5 6 6 5 5 5
R2 25 25 25 81 81 81 81 81 36 9 25 25 25 36 36 25 25 25
Delay activity “H” one period   R2 = 747

2nd Trial with activity H
19
Start with Delay activity “H” two periods
Time 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
A C I J K
3 3 3 3 3 3 3 3 3 3 3 3 3 4 4 5 5 5
D E
4 4 2 2 2
F
1 1 1
B G H
2 2 2 2 2 3 3 3 3 2 2 2 2 2
R 5 5 5 9 9 9 9 9 6 3 3 5 5 6 6 7 5 5
R2 25 25 25 81 81 81 81 81 36 9 9 25 25 36 36 49 25 25
Delay activity “H” 2 periods   R2 = 755

3rd Trial with activity H
20
Start with Delay activity “H” three periods
Time 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
A C I J K
3 3 3 3 3 3 3 3 3 3 3 3 3 4 4 5 5 5
D E
4 4 2 2 2
F
1 1 1
B G H
2 2 2 2 2 3 3 3 3 2 2 2 2 2
R 5 5 5 9 9 9 9 9 6 3 3 3 5 6 6 7 7 5
R2 25 25 25 81 81 81 81 81 36 9 9 9 25 36 36 49 49 25

4th Trial with activity H
21
Start with Delay activity “H” four periods
Time 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
A C I J K
3 3 3 3 3 3 3 3 3 3 3 3 3 4 4 5 5 5
D E
4 4 2 2 2
F
1 1 1
B G H
2 2 2 2 2 3 3 3 3 2 2 2 2 2
R 5 5 5 9 9 9 9 9 6 3 3 3 3 6 6 7 7 7
R2 25 25 25 81 81 81 81 81 36 9 9 9 9 36 36 49 49 49

Hence,  Lowest  R2 = 747 with Delay activity “H” 1 period
Conclusion at the end of trials with activity H
22
Time 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
A C I J K
3 3 3 3 3 3 3 3 3 3 3 3 3 4 4 5 5 5
D E
4 4 2 2 2
F
1 1 1
B G H
2 2 2 2 2 3 3 3 3 2 2 2 2 2
R 5 5 5 9 9 9 9 9 6 3 5 5 5 6 6 5 5 5
R2 25 25 25 81 81 81 81 81 36 9 25 25 25 36 36 25 25 25
The result = Delay activity “H” one period   R2 = 747

Trial with activity G
23
Start Delay activity “G” 1 period
Time 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
A C I J K
3 3 3 3 3 3 3 3 3 3 3 3 3 4 4 5 5 5
D E
4 4 2 2 2
F
1 1 1
B G H
2 2 2 2 2 3 3 3 3 2 2 2 2 2
R 5 5 5 9 9 6 9 9 6 6 5 5 5 6 6 5 5 5
R2 25 25 25 81 81 36 81 81 36 36 25 25 25 36 36 25 25 25
Delay activity “H” one period & Delay activity “G” one period   R2 = 729

Contd.
24
Continue Delay activities of non critical
Time 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
A C I J K
3 3 3 3 3 3 3 3 3 3 3 3 3 4 4 5 5 5
D E
4 4 2 2 2
F
1 1 1
B G H
2 2 2 2 2 3 3 3 3 2 2 2 2 2
R 5 5 5 5 5 7 10 7 7 7 7 7 7 6 6 5 5 5
R2 25 25 25 25 25 49 100 49 49 49 49 49 49 36 36 25 25 25
Delay activity “H” 1 period, Delay activity “G” 1 period, Delay activity “F” 2 periods,
Delay activity “E” 5 periods, and Delay activity “D” 2 periods   R2 = 715
Summary
25
Sequence of major moves of the first rescheduling cycle:

Delay activity “H” one period  R2 = 747
Delay activity “G” one period  R2 = 729
Delay activity “F” two periods  R2 = 727
Delay activity “E” five periods  R2 = 723
Delay activity “D” two periods  R2 = 715
Thus by delaying activities as given above (simultaneously)

leads to the most levelled resources.

Shortcomings of Burgess leveling procedure
26
 The disadvantage of this approach is that a resource buildup

occurs at the end of the project.
 The procedure does not position activities in a way so as to obtain
an optimum solution, although this happen by chance.
 To get the optimum solution, alternate schedules have to be
obtained using a different order of activities for shifting.
 The number of these alternate schedules will be large even for
small projects rendering the approach an impractical one.

Estimated Method
27
 Step 1: Draw the network in a time scaled diagram using the

early start schedule method
 Step 2: Perform resource loading for the activities and calculate

the total number of resources at each period
 Step 3: Reschedule non-critical activities to reduce peaks and to

smooth resource usage in the resource loading chart in order to
minimize Ri2, where Ri is the number of resource usage in the
resource loading chart
 Step 4: Continue Step 3 until you reach the schedule of having

minimum value of Ri2

Problem-3
Time-scaled network is given below with the resource demands of each activity on
each day. Using Estimated method of leveling procedure, level the resources.

Trial-1
29
Time 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
A C I J K
3 3 3 3 3 3 3 3 3 3 3 3 3 4 4 5 5 5
D E
4 4 2 2 2
F
1 1 1
B G H
2 2 2 2 2 3 3 3 3 2 2 2 2 2
R 5 5 5 9 9 6 6 6 3 6 6 6 6 6 6 7 7 7
R2 25 25 25 81 81 36 36 36 9 36 36 36 36 36 36 49 49 49
Delay activity “H” 4 periods & Delay activity “G” 4 period  R2 = 717

Trial-2
30
Time 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
A C I J K
3 3 3 3 3 3 3 3 3 3 3 3 3 4 4 5 5 5
D E
4 4 2 2 2
F
1 1 1
B G H
2 2 2 2 2 3 3 3 3 2 2 2 2 2
R 5 5 5 5 5 7 7 6 6 9 6 6 6 6 6 7 7 7
R2 25 25 25 25 25 49 49 36 36 81 36 36 36 36 36 49 49 49
Delay activity “H” 4 periods, Delay activity “G” 4 periods, Delay activity “E” 2
periods, Delay activity “F” 2 periods, and Delay activity “D” 2 periods
 R2 = 703
Other Trials
31
Time 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
A C I J K
3 3 3 3 3 3 3 3 3 3 3 3 3 4 4 5 5 5
D E
4 4 2 2 2
F
1 1 1
B G H
2 2 2 2 2 3 3 3 3 2 2 2 2 2
R 5 5 5 5 5 7 7 5 5 8 7 7 7 6 6 7 7 7
R2 25 50 75 100 125 174 223 248 273 337 386 435 484 520 556 605 654 703
Delay activity “H” 4 periods, Delay activity “G” 4 periods, Delay activity “F” 5
periods, Delay activity “E” 2 periods, and Delay activity “D” 2 periods
 R2 = 703 Thus by delaying activities as given above (simultaneously) leads to the most levelled
resources.
Problem-4
32
Data for small project is listed below:

Activity Depends on Duration Resource Rate Activity Depends on Duration Resource Rate
A  2 4 F D 2 2
B  1 2 G D 1 1
C A 1 2 E D 1 1
D B, C 4 6
1. Draw Early Start Time-scaled schedule and calculate the corresponding used resource.
2. Perform 2 trials Resource Leveling. Also, specify which one of the two trials Time-
scaled schedules is the final schedule and why.

Solution
33
1 2 3 4 5 6 7 8 9 10
A C D F
4R 2R 6R 2R
B G
2R 1R
E
1R
6 4 2 6 6 6 6 4 2 R
36 52 56 92 128 164 200 216 220 R2

Trial-1
34
1 2 3 4 5 6 7 8 9 10
A C D F
4R 2R 6R 2R
B G
2R 1R
E
1R
4R 4R 4R 6R 6R 6R 6R 4R 2R
16 32 48 84 120 156 192 208 212 R2

Trial-2
35
1 2 3 4 5 6 7 8 9 10
A C D F
4R 2R 6R 2R
B G
2R 1R
E
1R
4 4 4 6 6 6 6 3 3 R
16 32 48 84 120 156 192 201 210 R2
The 2nd trial schedule is the best Resource

Leveling result because it has lowest R2.

Cumulative Resource Requirement Curve
36
Cumulative resource requirement curve (S-curve) may be used for:
• Planning and Control of progress
• Preliminary resource allocation

Resource leveling and allocation measures
37
Total unit of resources T
1  Average daily requiremen t, DR A  
project duration D
DR A
2- Criticalit y index, IC 
Amax
3- Effectiven ess, Eff  (DR A )2  D
j n
4 - Total units of resources ; T   Rj
j 1
j n
5 - Sum of squares of rousources ; SUM  R
j 1
2
j
where,
Amax  Maximum Avaliable Resourcs
n  Number of periods
Resource per period  R

Significance of Resource Criticality Index
38
DRA
IC 
Amax
• Higher values of resource criticality index are associated with the most critical (i.e.,
most tightly constrained) resources.
• Values of resource criticality index significantly below 1.0 typically are associated
with non-constraining resources.
• Values around and above 1.0 indicate that project delays (beyond the original
critical path duration) will be encountered.

Problem-5
39
For a small Engineering project listed below:

a) Draw the Early Start and Late start project schedule using Time- scaled network.
b) Within only two trials, level the project Resource.
c) How many Worker(s)/day you should use in this project?
Depends Time, Resource,

Activity
on day Worker/day
A None 4 2
B A 6 3
C B 7 3
D C, G 3 4
E None 3 3
F A, E 4 2
G F 4 2
H None 1 3
I H 5 2

Solution (a)
ES Time Scaled Network
40
Earlest Start project schedule using Time- scaled network

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21
A B C D
R2 R3 R3 R4
E F G
R3 R2 R2
H I
R3 R2
R 8 7 7 4 7 7 5 5 5 5 5 5 3 3 3 3 3 4 4 4
∑R 8 15 22 26 33 40 45 50 55 60 65 70 73 76 79 82 85 89 93 97
R2 64 49 49 16 49 49 25 25 25 25 25 25 9 9 9 9 9 16 16 16
∑R2 64 113 162 178 227 276 301 326 351 376 401 426 435 444 453 462 471 487 503 519

Contd.(a)
LS Time Scaled Network
41
Latest Start project schedule using Time- scaled network

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21
A B C D
R2 R3 R3 R4
E F G
R3 R2 R2
H I
R3 R2
R 2 2 2 2 3 3 6 6 6 5 5 5 5 5 8 7 7 6 6 6
∑R 2 4 6 8 11 14 20 26 32 37 42 47 52 57 65 72 79 85 91 97
R2 4 4 4 4 9 9 36 36 36 25 25 25 25 25 64 49 49 36 36 36
∑R2 4 8 12 16 25 34 70 106 142 167 192 217 242 267 331 380 429 465 501 537

Solution (b)
1st Trial for resource leveling
42
step 1- moving task H to start end of 3rd period
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21
A B C D
R2 R3 R3 R4
E F G
R3 R2 R2
H I
R3 R2
R 5 5 5 5 7 7 7 7 7 5 5 5 3 3 3 3 3 4 4 4
∑R 5 10 15 20 27 34 41 48 55 60 65 70 73 76 79 82 85 89 93 97
R2 25 25 25 25 49 49 49 49 49 25 25 25 9 9 9 9 9 16 16 16
2
∑R 25 50 75 100 149 198 247 296 345 370 395 420 429 438 447 456 465 481 497 513

Contd.(b)
2nd Trial for Resource Leveling
43
step 2- moving task I to start end of 12th period

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21
A B C D
R2 R3 R3 R4
E F G
R3 R2 R2
H I
R3 R2
R 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 4 4 4
∑R 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 89 93 97
R2 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 16 16 16
2
∑R 25 50 75 100 125 150 175 200 225 250 275 300 325 350 375 400 425 441 457 473

Leveling Result and Solution of part (c)
44
The levelling result clearly indicates

that 5 worker(s)/day will be enough
for this project.
DR A 4.85
Criticalit y index, IC    0.97 OK
Amax 5
Resource requirement
Average daily requiremen t, DR A 

T

 R  97  4.85 workers/d ay
D D 20
Effectiven ess, Eff  (DR A )2  D  4.85 2  20  470.45

Further Reading
45
Read more about the resource leveling from:


Thank You
46

(GE 404)
LECTURE # 8
Limited Resource Allocation

Contents
2

 Resource Allocation
 Why Resource Allocation
 Project Resource Requirement
 Resource Loading Diagram
 Management of Resources—Resource Allocation
 Scheduling Activities with Limited Resources
 Series Method
 Problem
 Further reading

3
 To discuss the issues involved in Limited

Resource Allocation
 To explain how to carry out limited resource
allocation using series method

Resource Allocation
4
 Resource Allocation is the scheduling of activities and the resources required

by those activities (while taking into consideration both the resource
availability and the project time).
 Resource allocation permits efficient use of physical assets
 Within a project, or across multiple projects
 Drives both the identification of resources, and timing of their application
 There are generally two conditions for allocating resources:
 “Normal” Most likely task duration
 “Crashed” Expedite an activity, by applying additional resources together
with cost considerations
 Specialized or additional equipment/material
 Extra labor (e.g., borrowed staff, temps)
 More hours (e.g., overtime, weekends)

Why Resource Allocation?
5
 To complete and finalize project schedule for completion of the project at

maximum efficiency of time and cost
 Better managing of resource utilization over the life of the project
 To smooth the use of resources for better assignment and levelling of

Manpower, equipment, materials, subcontractors, and information
 To estimate cost properly for finding optimum project budget (money
resource) and close management control
 To schedule resource constraints properly to take care of shortage of resources
 Note: Duration of a project may be increased by delaying the late start of

some of its activities if resources are not adequate to meet peak demands

Goal of Resource Allocation/Planning
6
 The basic objective of resource management is to supply and

support field operations with the resources required so that
established time objectives can be met and costs can be kept
within the budget.
 Hence, the goal is to optimize use of limited resources
 This requires making trade-offs

 time constrained
 resource constrained

Effect of Limited Resources on Schedule slack
7
 Assume that activities “C”
and “G” each require the
use of a special piece of
equipment, such a hoist
crane. But only one crane
is available.
 The direct result of this
resource constraint is that
activities “C” and “G” can
not be performed
simultaneously as indicated
by the ES time-only
schedule. One or the other
of the activities in each pair
must be given priority.

Contd.
8
 Resource constraints reduce the total amount of schedule slack.
 Slack depends both upon activity relationships and resource

limitations.
 The critical path in resource-constrained schedule may not be

the same continuous chain(s) of activities as occurring in the
unlimited resources schedule.

Project Resource Requirement
9
 Resource Loading Diagram

 A diagram that highlights the
period-by-period resource
implications of a particular project
schedule
 Project Resource Requirement =
 Resource Loading Diagram =
 Resource Histogram =
 Resource Profile and S curve

Project Resource Requirement (Contd.)
10
We need We make
 Project network  Resource loading diagram

 Resource requirement  Period-by-period total
requirements of units of
for each activity
resources
 Bar chart or time-scaled  Cumulative resource
network requirement curve (S curve)

Resource Loading Diagram
(Based on ES schedule)
Time 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
A C I J K
3 3 3 3 3 3 3 3 3 3 3 3 3 4 4 5 5 5
D E
4 4 2 2 2
F
1 1 1
B G H
2 2 2 2 2 2 2 2 2 2 2 2 2 2
R 5 5 5 9 9 9 9 9 6 5 5 5 5 6 4 5 5 5
ΣR 5 10 15 24 33 42 51 60 66 71 76 81 86 92 96 101 106 111
R2 25 25 25 81 81 81 81 81 36 25 25 25 25 36 16 25 25 25
ΣR2 25 50 75 156 237 318 399 480 516 541 566 591 616 652 668 693 718 743
Resource
9
8
7
6
5
4
3
2
Resource Loading Diagram = Resource Histogram
1

Resource Loading Diagram
(Based on LS schedule)
Time 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
A C I J K
3 3 3 3 3 3 3 3 3 3 3 3 3 4 4 5 5 5
D E
4 4 2 2 2
F
1 1 1
B G H
2 2 2 2 2 3 3 3 3 2 2 2 2 2
R 3 3 3 3 5 5 5 5 9 10 9 9 9 6 6 7 7 7
ΣR 3 6 9 12 17 22 27 32 41 51 60 69 78 84 90 97 104 111
R2 9 9 9 9 25 25 25 25 81 100 81 81 81 36 36 49 49 49
ΣR2 9 18 27 36 61 86 111 136 217 317 398 479 560 596 632 681 730 779
10aaa
9
8
7
6
5
4
3
2
Resource Loading Diagram = Resource Histogram
1

Management of Resources—Resource Allocation
(Main Aspects)
13
 Also often called constrained-resource

scheduling
 There are definite limitations on the
amount of resources available to carry out
the project (or projects) under
consideration.
 Project duration may increase beyond
the initial duration determined by the
usual “time only” CPM calculations.
 The scheduling objective is to minimize
the duration of the project (or projects)
being scheduled, subject to stated
constraints on available resources.
 Note: Resource leveling ensures that
resource demand does not exceed
resource availability.

Cumulative Resource Requirement Curve
14
Cumulative resource requirement curve (S-curve) may be used for:
• Planning and Control of progress
• Preliminary resource allocation

Resource allocation measures
15
Total unit of resources T
1  Average daily requiremen t, DR A  
project duration D
DR A
2- Criticalit y index, IC 
Amax
3- Effectiven ess, Eff  (DR A )2  D
j n
4 - Total units of resources ; T   Rj
j 1
j n
5 - Sum of squares of rousources ; SUM  R
j 1
2
j
where,
Amax  Maximum Avaliable Resourcs
n  Number of periods
Resource per period  R

Significance of Resource Criticality Index
16
DRA
IC 
Amax
• Higher values of resource criticality index are associated with the most critical (i.e.,
most tightly constrained) resources.
• Values of resource criticality index significantly below 1.0 typically are associated
with non-constraining resources.
• Values around and above 1.0 indicate that project delays (beyond the original
critical path duration) will be encountered.

Scheduling Activities with Limited Resources
17
 Series Method
 The series method relies on the assumption that once an
activity has been started, it cannot be interrupted.
 Parallel Method
 The parallel method is similar to the series method with one
basic difference: The parallel method permits activities to be
interrupted.

Series Method
18
 Schedule activities to start as soon as their predecessors have been

completed
 Determine the Eligible Activity Set (EAS) i.e. those activities with all
predecessor activities completed.
 From among the members of the current EAS, determine the Ordered
Scheduling Set (OSS) of activities giving priority to the earliest late start
 If the activities are tied for the early late start date, give priority to the activity
with least activity duration
 If the activities are tied for activity duration, give priority to the activity with
the largest number of resources
 If no activity has been selected with the above rules, start the activity that
occurs first in the input order

Form for the Resource Allocation
Time 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
EAS
OSS
use
R
Problem-1
20
The work of a small engineering project is planned according to the AON shown below. The labour
requirement of each activity is shown below each activity box.
(a) Calculate the requirements of labour each day when all the activities start at their (i) early start
and (ii) late start.
(b) What will be the minimum contract duration if no more than 6 labours can be made available for
the work and if it is assumed that having started an activity it must be completed without a break?
2 3 8 1
B E H Y
2 1 2 3
3 4 5 2 5
A C F Z X
4 3 3 2 1
5 7 ES D EF
D G Activity
LS TF LF
5 4 Required Labour

Solution
21
3 2 5 7 3 10 10 8 18 18 1 19
B E H Y
5 2 7 7 0 10 10 0 18 18 0 19
2 1 2 3
0 3 3 3 4 7 8 5 13 15 2 17 19 5 24
A C F Z X
0 0 3 3 0 7 12 4 17 17 2 19 19 0 24
4 3 3 2 1
3 5 8 8 7 15 ES D EF
D G Activity
5 2 10 10 2 17 LS TF LF
5 4 Required Labour

EST
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
A 4 4 4 Solution (a)
C 3 3 3 3
E 1 1 1
H 2 2 2 2 2 2 2 2 DRA =(SR/D) =
Y 3
X 1 1 1 1 1 127/24 = 5.292
B 2 2
D 5 5 5 5 5
F 3 3 3 3 3
G 4 4 4 4 4 4 4 Eff =DRA2×D =
Z 2 2
(5.291)2×24 =
R 4 4 4 10 10 8 8 6 8 8 9 9 9 6 6 4 4 2 3 1 1 1 1 1
5.292 =672.042
SR 4 8 12 22 32 40 48 54 62 70 79 88 97 103 109 113 117 119 122 123 124 125 126 127
2
R 16 16 16 100 100 64 64 36 64 64 81 81 81 36 36 16 16 4 9 1 1 1 1 1
2
SR 16 32 48 148 248 312 376 412 476 540 621 702 783 819 855 871 887 891 900 901 902 903 904 905
LST
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
A 4 4 4
C 3 3 3 3
E 1 1 1
H 2 2 2 2 2 2 2 2
Y 3
X 1 1 1 1 1
B 2 2
D 5 5 5 5 5
F 3 3 3 3 3
G 4 4 4 4 4 4 4
Z 2 2
R 4 4 4 3 3 10 10 6 6 6 6 6 9 9 9 9 9 4 5 1 1 1 1 1
SR 4 8 12 15 18 28 38 44 50 56 62 68 77 86 95 104 113 117 122 123 124 125 126 127
2
R 16 16 16 9 9 100 100 36 36 36 36 36 81 81 81 81 81 16 25 1 1 1 1 1
2
SR 16 32 48 57 66 166 266 302 338 374 410 446 527 608 689 770 851 867 892 893 894 895 896 897
Solution (b) 3 2 5
B
5 2 7
7 3 10
E
7 0 10
10 8 18
H
10 0 18
18 1 19
Y
18 0 19
2 1 2 3
0 3 3 3 4 7 8 5 13 15 2 17 19 5 24
A C F Z X
0 0 3 3 0 7 12 4 17 17 2 19 19 0 24
4 3 3 2 1
3 5 8 8 7 15 ES D EF
D G Activity
5 2 10 10 2 17 LS TF LF
5 4 Required Labour
Minimum
contract
duration if no
more than 6
labours can be
made available
= 31 days

3 2 5 7 3 10 10 8 18 18 1 19
B E H Y
5 2 7 7 0 10 10 0 18 18 0 19
2 1 2 3
0 3 3 3 4 7 8 5 13 15 2 17 19 5 24
A C F Z X
0 0 3 3 0 7 12 4 17 17 2 19 19 0 24
4 3 3 2 1
3 5 8 8 7 15 ES D EF
D G Activity
5 2 10 10 2 17 LS TF LF
5 4 Required Labour

Multiple Project Scheduling Interactions
25
Example of multi project scheduling interactions

Further Reading
26
Read more about the resource allocation from:


Thank You
27

(GE 404)
LECTURE # 9
Cash Flow Analysis

Contents
2

 Introduction
 Terminologies
 Cash Flow: Cash in and Cash out
 Most common types of construction contracts
 Contract cash flow curves
 Financial Charges
 Simplified approach to forecast contract revenue/income curve
 Simplified approach to forecast contract cost/expense curve
 Problem
 Further reading

3
 To discuss the fundamentals of cash flow

analysis
 To explain the steps involved in drawing the
contract cash flow curves

Introduction
4
 As with any businesspersons, contractors are primarily

concerned with making money in their businesses.
 The decisions they make in preparing for and running
each of their projects are inevitably related to costs and
income.
 The application of resources (materials, workforce, and
machines) relates directly to another resource, money.
 CPM provides a means for relating time and money.

Terminologies
5
 Bid: to offer to do work or provide a service for a particular price

 French firm will be bidding for the contract.
 Tender: a formal offer to do work at a stated price
 A local firm submitted the lowest tender
 Disbursement: the process of paying money; an amount of money paid
There have been delays in the disbursement of funds
 Retainage:Portion of a contract's final payment withheld by a principal (client
or owner) until the project is complete in all respects
 Lien: the right to keep somebody’s property until a debt is paid
 Markup: an increase in the price of something based on the difference
between the cost of producing it and the price it is sold at
 an average markup of 10%
 The markup on food in a restaurant is at least 100%.

Cash Flow
6
 A cash flow analysis is an investigation of a project in

which the focus is on the flow of money.
 Thus Cash flow refers to a contractor's income and
outgo of cash.
 The net cash flow is the difference between cash out
and income at any point in time.
 A positive cash flow is when the cumulative revenues
exceed the cumulative expenditures (meaning that
surplus cash is available)
 A negative cash flow can also occur, and this means
that more money is being spent than received.
 A negative cash flow will mean that the firm will need
to take the appropriate steps to borrow from within the
firm or financial institutions to cover the shortfall in
funds.

Factors that Minimize Contractor’s Negative Cash Flow
7
 Front end rate loading: earlier items in bill of quantities carry a higher mark-up than
later items. This reduces negative cash flows in contract early stages
 Reduction of delays in receiving revenue
 Adjustment of work schedule to late start timing
 Coinciding the timing of delivery of large materials orders with the submittal of the
contractor's monthly pay estimate
 Delay in paying labor, plant hirers, materials suppliers, and subcontractors. This would
reduce negative cash flows but undermine commercial confidence in the company
 Increasing the mark-up and reducing the retentions
 Increasing advance payment
 Achievement of maximum production in the field
 Quick settlement of claims

Cash in
8
• Owner shall make progress payments of the

contract amount to the prime contractor as the
work progresses
• Cash in = Cash receipt = income
• Principal components of cash in

• Value of work actually performed in the
field
• Material stored on the site, but not yet
incorporated into work, as well as any
prefabrication or pre assembly work
that the contractor may have done at
some location other than the job site
• A step curve is used to represent contract cash

income
• An income is the actual receipt of revenue.
Contract revenue and income curves

Cash Out
9
 Cash out = payment of costs = expense
 An expense is the actual payment of costs.
 Principal components of cash out

 “Up-front" costs = initial expenses = start-up
costs are costs necessary to start the project
such as costs of moving in workers and
equipment; erecting field offices, storage sheds,
fences; job layout; installation of temporary
electrical, water, telephone, sanitary, and other
services; bonds; permits and project insurance.
 Payment of direct job costs. These include costs
associated with payrolls, materials, equipment,
and subcontractor payments.
 Payments for filed overhead expense and tax.
 An S-curve (a smooth curve) is used to represent

contract cash out.
Contract cost and expense curves

Most Common Types of Construction Contracts
10
 A construction contract is an agreement that outlines the way a construction

job is executed and the specific amount of compensation for the job.
 Unit price contract – This contract type is based on anticipated quantities of
items which are counted in the project in addition to their unit prices. The final
price of the project depends upon the quantities required to carry out the work.
 Generally, this contract is suitable only for construction and supplier projects which
involve accurate identification of different types of items, but not their numbers, in
the contract documents.
 Lump sum contract – Under this contract type, the engineer or contractor
agrees to perform the specified and described project for a fixed price. This
type of contract is also referred to as a “Fixed Price Contract”.
 A Lump Sum or Fixed Price contract is appropriate where scope and schedule of the
project are defined sufficiently thus allowing the contractor or engineer to estimate
the costs of the project.

Contd.
11
 Cost plus contract – The cost plus contract is an agreement which

involves the buyer’s consent to pay the complete cost for material and
labor in addition to the amount for contractor overhead and profit.
 This contract type is favored where the scope of work is highly uncertain or
indeterminate in addition to the types of labor, material, and equipment being
similarly uncertain in nature (Uncertainty in scope and resource type).
 Incentive contracts – The incentive contracts feature compensation
based on the contracting and/or engineering performance in accord
with an agreed target – schedule, quality, and budget.
 Incentive contracts commonly fall into one of two common categories: Fixed Price
Incentive Contracts and Cost Reimbursement Incentive Contracts.
 Percentage of construction contracts—This contract type is common
for engineering contracts. The compensation involved in these contracts
is based on a percentage of the cost of construction.

Payment request for unit price contract
12
• The quantities of work done on unit-price contracts are determined by actual

field measurement of the bid items put into place.
• The total quantity accomplished to date on each bid item is multiplied by its
corresponding contract unit price.
• All of the bid items are totaled and the value of materials stored on the site as
well as any prefabrication or pre assembly work that the contractor may have
done at some location other than the job site is then added.
• The prescribed retainage is subtracted from this total.

• The resulting figure represents the entire amount due to the contractor for his
work to date. The sum of all prior progress payments that have already been
paid is then subtracted, this yielding the net amount of money payable to the
contractor for his work that month.

Payment request for lump sum contract
13
• Under lump sum contract the project is divided for payment purposes into
relatively few work classifications (major job components). Contracts
progress is measured in terms of estimated percentages of completion of work
classifications.
• The contractor estimates the percentage completed in place.
• The total value of each work classification is multiplied by its percent

completion.
• To the total of completed work is added the value of all materials stored on the
site. From this total is subtracted the retainage. This gives the total amount of
money due to the contractor (up to the date of the pay request).
• Then, the amount of progress payments already made is subtracted. The

resulting figure gives the net amount now payable to the contractor.

Payment Request for Negotiated (e.g. Cost-Plus)
Contract
14
• Negotiated contracts of the cost-plus variety usually provide for the

contractor's submission of payment vouchers to the owner at specified
intervals during the life of the contract.
• The contractor must make periodic accountings to the owner for the
cost of the work, either to receive direct payment form the owner or to
obtain further advances of funds.
• A common provision is weekly reimbursement of payrolls and

monthly reimbursement of all other costs, including a proportion of
the contractor's fee.

Contract Provisions that Impact Cash in
15
• Advanced payment
• Progress payment
• Materials stored on the site
• Final Payment
• Retention
• …….

Retainage or Retention
16
 A prescribed percentage of each progress payment is

usually retained by the owner in accordance with the
terms of the contract
 The retainage may be held by the owner until the work

receives final certification by the A/E, the owner accepts
the project
 Final payment is then made to the contractor, including

the accumulated retainage

Final Payment
17
 After the work has been finalized and all deficiencies remedied, the
owner makes formal written acceptance of the project and the
contractor presents his application for final payment
 Under a lump-sum form of contract, the final payment is the final

contract price less the total of all previous payment installments made
 With a unit-price contract, the final total quantities of all payment items
are measured and the exact final contract price is determined. Final
payment is again equal to the contract price less the sum of all progress
payments previously made
 In all cases, final payment by the owner includes all retainage that has
been held by him.

Cash Flow Forecasting
18
 A determination of the future rates of cash outs and cash income

together with their combined effect on the project cash balance is called
a "cash flow forecast"
 Cash flow forecasting is required to determine whether or not the funds
to execute the plan are available.
 Cash flow forecasting is the forecasting of both cash in and cash out
of the project.
 Forecast of cash flow is required:

 To determine the negative cash flow and how to cover it
 To determine the positive cash flow and how to use it (the positive cash flow of one
contract may be used to handle the negative cash flow of another)

Simplified Approach to Forecast Contract Cash Flow
(Contract Revenue/Income Curve)
19
1. Produce an activity schedule in bar chart or time-scaled form.

Determine the value/price of each activity per week
2. Find the monthly revenue
3. Adjust the revenue for advanced payment and retention
4. Draw cumulative adjusted revenue versus time curve
5. Shift the above curve by the lag between submitting payment

requests and receiving revenue to get the income curve

Simplified Approach to Forecast Contract Cash Flow
(Contract Cost/Expense Curve)
20
When the mark-up is uniformly spread throughout the contract, the cost/expense
curve can be derived as follows:
If the mark-up; M, is expressed as a percentage of tender price, then:
Cumulative cost = cumulative revenue × (1- M)
1. Draw cumulative cost versus time curve
2. Group cost headings that have the same payment delay between incurring
the cost and making the payment
3. Calculate the proportion of costs due to each group
4. Shift the cumulative cost of each group by the specified amount to get its
cumulative expense
5. Sum up contract cumulative expenses
6. Draw cumulative expense curve

Contract Cash Flow Curves
21
 Having determined the contract

cumulative income and expense
curves, one can combine them
on one graph to represent the
contract cumulative cash flow
curves
 The difference between contract
cumulative income and expense
curves can be drawn to represent
the contract cumulative net cash
flow

Financial Charges
22
• The cash invested in the contract is

represented by the negative area between the
expense and income curves.
• This area, A, can be calculated in units of

“SR. weeks” if the vertical scale is in Saudi
Riyal and the horizontal scale in weeks.
• If the rate of investment is r% per year, then

the financial charges can be calculated as
follows:
• Financial charges = A × r / 52
• It is important to point out that if the

contractor borrows the negative cash with
interest, then r equals the interest rate.

Note
23
 Cost = Price × (1- M)

 Price = Cost × (1+M)
 Cost/Price = 1-M
 Price/Cost = 1+M
 M is in fraction (e.g. 20% in fraction will be 0.2)

The following network shows the activities of small
project. The activities’ durations are in weeks. The
price of each activity is shown in below table.
Problem-1
• According to contract conditions, the contractor
will receive advanced payment of 20%. This
will be deduced from each monthly revenue.
• Applications of payments will be submitted by
the contractor to the client every 4 weeks and
payment will be after 2 weeks from the
submission of the application.
3
• The client will deduct 10% from each payment

as retention. All retentions will be paid to the
contractor with the last payment.
• The ratio between project price to project cost
is 1.1 (project price /project cost = 1.1). There is
no delay in paying the costs by the contractor.
• Calculate and draw the cash flow curves (cash-
in and cash-out) based on early start time.

Solution
∑ =161
32.2 20%*161
10%*161
(72-(0.1*72)-
32.2 (0.2*72))
(72/1.1)

Income 32.2
32 82.6 128.1 161
Cost 32.73 65.45 95 124.55 135.46 146.37 146.37
32.2 -0.53 -33.25 -62.8 -41.95 -52.86 -18.27 -18.27

-12.4 -7.36 14.63
Solution
(Contd.)
To get the cost

in each week
distribute the
monthly cost
evenly over 4
weeks.
For example,
Cost after 2
weeks from the
start will be:
65.45/4*2=32.
73.

• The actives involved in a small engineering
project are given in the table. The value of the Problem-2
work involved in each activity is listed in the
table.
• The mark-up is 10% of tender value and is assumed
to be uniformly distributed over the contract.
• The contractor will receive an advanced payment of
10% of tender value. This will be deduced from each
monthly revenue.
• Retention is 5% and is paid on contract completion.
• Labor cost is assumed to be 30% of total contract cost.
• The delay for other payment is one month.
• Revenue is received after 4 weeks from submitting
invoices
• Assume all the activities are scheduled on their early
start timings
• Derive income and expanse curve and contract cash
flow curves.

Solution
28
(24-(.1×24)-
(0.05×
24))

Sample Mid Month expense Calculations
=[(72.54-32.67)/4]×2+32.67= 52.605
=(72.54-32.67)/2+32.67= 52.605
Similarly
=(137.7-114.21)/2+114.21=125.96
Similarly
=(144-137.7)/2+137.7=140.85
Sample Cash flow Calculations:
16-6.48=9.52
16-32.67=-16.67
36.4-72.54=-36.14

Activity Time (weeks)
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
A 6 6 6 6 6
B 5 5 5 5
C 3 3 3 3 3
D 3 3 3 3 3
E 5 5 5 5 5
F 4 4 4 4
G 3 3 3 3 3 3
H 2 2 2 2
I 3 3 3
J 2 2
Weekly Revenue 6 6 6 6 6 8 11 16 16 11 11 14 9 9 9 6 3 3 2 2
Monthly Revenue 24 41 52 33 10
Advanced Payment 16
Retention 8
Adjust. Revenue 20.4 34.9 44.2 28.1 8.5
Cumulative revenue 16 36.4 71.3 115.5 143.5 160.0
Cumulative Income 16 36.4 71.3 115.5 143.5 160.0
Cost 21.60 36.90 46.80 29.70 9.00
Cumulative Cost 21.60 58.50 105.30 135.00 144.00
Cumulative labour cost 6.48 17.55 31.59 40.50 43.20
Cumulative other cost 15.12 40.95 73.71 94.50 100.80
Cumulative expense 6.48 32.67 72.54 114.21 137.70 144.00
Net Cash Flow 16 9.52 -16.67 -36.14 -42.96 -22.25 -0.50
3.73 -1.29 1.24 5.80 16.00
Sample Mid Month expense Calculations

=[(72.54-32.67)/4]×2+32.67= 52.605
=(72.54-32.67)/2+32.67= 52.605
Similarly
=(137.7-114.21)/2+114.21=125.96
Similarly
=(144-137.7)/2+137.7=140.85
Sample Cash flow Calculations:

16-6.48=9.52
16-32.67=-16.67
36.4-72.54=-36.14

The following Time scaled network shows the activities of a small
engineering project. The cost of each activity is shown in the table below. Problem-3
1 2 3 4 5 6 7 8 9 10 11 12 13
A B C D
G H
E F
Total cost 10000 25000 10000 5000 15000 5000 7500 15000
• The contractor will receive advance payment of 15% of the project price. This will be
deducted from each monthly revenue.
• Application of payment will be submitted by the contractor to the client every month
and payment will be after 4 weeks from the submission of the application.
• The client will deduct 5% from each payment as retention . All retention will be paid
to the contractor with the final payment .
• Assume the markup is 20% of the total project cost and is uniformly distributed over
the work. There is no delay in paying costs by the contractor.
Calculate the cash-in and cash-out values and find maximum negative cash flow.

Solution
32
Price = Cost×(1+M) ; M:markup= 20%=0.2
Activity A B C D E F G H Total
Total cost 10000 25000 10000 5000 15000 5000 7500 15000 92500
Revenue 12000 30000 12000 6000 18000 6000 9000 18000 111000
Advanced payment = 0.15×111000 = 16650

Retention = 0.05×111000 = 5550

105.45+
5.55

Solution (contd.)

Problem-4
35
The table below lists the cumulative monthly End of Cumulative Expense, Cumulative Income,
Month (1000SR) (1000SR)
expenses incurred by contractors and the
0 0 0
corresponding monthly incomes which are
1 12 0
received from the owner of a project.
2 20 0
3 54 0
If the owner makes all his payments one 4 90 14
month later than anticipated in the table 5 130 40
above, by what percentage will the cash 6 180 100
invested (i.e. negative area between the 7 220 130
expense and income curves) increase? 8 240 190

9 260 210
10 290 300
11 290 320
12 290 340

Solution
b
a
c
1
Area   c  (b  a)  a  c
2
1
 Area   (a  b)  c
2
Sample Calculation:
=0.5(12+20)×1=16
=0.5(20+54) ×1=37
=0.5(54+90) ×1=72
=0.5(130+90) ×1-14×1=96
End of Month 0 1 2 3 4 5 6 7 8 9 10 11 12
Cumulative Expense (1000 SR) 0 12 20 54 90 130 180 220 240 260 290 290 290 Total
Cumulative Income (1000 SR) 0 0 0 0 14 40 100 130 190 210 300 320 340
Negative Area 0 6 16 37 72 96 115 100 100 60 65 * * 667
Additional Negative Area 14 26 60 30 60 20 80 290
957
290
% Increase in negative area  100  43.5%
667
Further Reading
37
Read more about the Cash-flow from:


Thank You
38

(GE 404)
LECTURE #10
Project Time-Control

Contents
2

 Introduction to Project time-control
 Process of Project time-control
 Network updating (rescheduling)
 Problem
 Further reading

3
 To discuss process involved in project time-

control
 To explain how to carry out project rescheduling
(or Network updating)

Project Time-Control
4
 Project time-control can be summarized to two basic

components:
1. Monitoring
 Monitoring consists of a means of understanding what is
happening on a project, obtaining information about the
project by some means
2. Control
 Control consists of action taken in response to the
information

Process of Project Time-Control
5
• Establish an operational schedule

• Measure the progress and report the progress
• Compare actual achievement with planned
• Check and analyze time progress and determine effect on
completion date and milestones
• Plan for corrective action
• Implement corrective action
• Update operational schedule

Establish Operational Schedule
6
 For project control purposes a hierarchy of schedules may be needed,

depending on who will use it
 Key Dates Schedule
 For owners and top-level management in terms of MILESTONES or KEY
DATES.
 Detailed Schedule
 For engineers, work supervisors, material suppliers and subcontractors
 A schedule of that particular engineer/supervisor work responsibility
 Provide him with a day-to-day forecast of field operations
 Critical activities and free float values should be noted
 Covers limited time spans (2 weeks or 30 days)
 Tabular listings and computer-printed bar charts are common forms
Measure and Report Progress
7
Methods:
 Estimated number of working days required to complete the activity
 Estimated % completion of the activity
 Quantities of work units put in place
Equations
 Based on the assumption of straight-line variation between time and work
accomplishment
 Working days to complete = d (1 - P/100)
 Working days to complete = d (1 – (W/T))
d= total activity duration in working days
P = estimated percentage of completion
W= number of work units put into place
T= total number of work units associated with the activity

Contd.
8
 Weekly Progress reports

• A common procedure in many industries
• Listing those activities that started, finished, or were in progress during the
week and indicating their stages of completion
• Must include procurement, material delivery information etc.
• Choose a cutoff date, to be selected to serve both time management and
labor cost accounting

Contd.
9
WEEKLY PROGRESS REPORT
Project: Highway bridge Week ending: Wednesday, July 21 (working day 27)
Job. No: 7903-50 Prepared by: K.M.
Activity Activity Date Date Percent Working days to
Number Started Completed Complete complete
A 110 - July 15 100 0
B 115 - - - 13
C 130 - - 80 2
D 150 July 15 July15 100 0
E 160 July 16 July 21 100 0

Contd.
10
Field Progress Narrative

 To accompany weekly progress reporting
 Discussion of projected project features
 General statement about time status
 Critical or low float activities in difficulty
 Potential trouble spots
 Exceptionally well project areas

Compare and Analysis of Project Progress
11
 Concerned primarily with determining the effect of the latest information on

the project completion date and any milestone goals
1st - A quick and simple check for critical activities status
2nd - Check the possibility of a new critical path
Signs of Danger
 Activities fall behind LS schedule
 Resource availability delays
 Realizing that time duration of future activities have been materially
underestimated
 Change logic becomes necessary

Corrective Actions
12
 When there are small delays that are within network time
contingency, no action is usually required
 Otherwise use Time Reduction Technique to bring project back

on schedule
 Make periodic (Weekly, biweekly, or monthly) job progress

meetings with project managers, field supervisors, major
subcontractors, material suppliers, and owner representative to
enhance time management efficiency

Network Updating (Rescheduling)
13
 Concerned with determining the effect of schedule deviations and plan

changes on the portions of the project yet to be constructed
 This requires making necessary network corrections and re-computing activity
times and float times
 Information required for Rescheduling

 New activities to be added
 Existing activities to be deleted
 Changes in the resource availability and delivery dates
 Changes in the job logic
 New estimate of the time (for completing unfinished activities)
 Changes in the scope of work etc.

Problem-1
14
The initial AON diagram for a small engineering project is shown below with its planned activity times
in days. At the end of the 15th day, the field progress report gives you the following information:
 Activity “A” was completed on schedule
 Activity “B” started as planned but four days were lost due to waiting for the required resources
 Activity “C” was completed one day earlier
 The remaining duration of Activity “D” is 2 days
 The duration of activity “H” will be reduced to 12 days instead of 17 days.
 The activity “F” cannot start until the morning of day 22
 Activity “Z” is expected to take two days more
 Due to owner requirement the volume of work of activity “X” will be increased by 50%
3 6 9 11 5 16 16 17 33 33 3 36
B E H Y
Construct the updated AON diagram,
calculate the early and late start times
0 3
A
3 3 8
C
11 13 7
F
20 25 4
Z
29 36 10
X
46
of each activity, and indicate the
critical path.
3 10 13 13 12 25
D G

Solution
0 13 15 3 18 18 12 30 30 3 33
B E H Y Cannot
17 20 20 32 32 35
start
until 21
0 10 21 7 28 29 6 35 35 15 50
A C F Z X
0 22 29 29 35 35 50
15 2 17 17 12 29
D G
15 17 17 29
Note: In duration cell, mention the time required/ remained w.r.t. date of reporting.
Note: ES of Activity E and D should be 15 since work in progress in these two activities
For activity E: 13-5-18 is changed to 15-3-18
• ES is changed from 13 to 15 because the current date of rescheduling is Day 15
• Duration is changed from 5 to 3 because EF = 18 has to be maintained
Further Reading
16
Read more about the Project Monitoring and Control from:


Thank You
17

(GE 404)
LECTURE # 11
Project Cost-Control

Contents
2

 Integration of cost and schedule
 Aims of project cost control system
 Cost control
 Three Key indicators in performance measurement
 Performance equations
 Cost forecasting equations
 Problems
 Further reading

3
 To discuss key indicators in performance

measurement of a project
 To learn how to estimate and forecast different types of
costs

Integration of Cost and Schedule
4
 The integration of cost and schedule control systems is of natural interest to

construction professionals, because the true “status” of a project can only be
assessed if both cost and schedule data are examined in conjunction with one
another
 Example: A project may appear to be well under budget based on the
amount of money spent to date compared to what was projected. However,
this figure alone could be very misleading; costs may be very low because
the project is well behind the schedule.
 Thus it is necessary to know what actual project costs are relative to
expected costs while knowing where the project is on a time basis.
 The critical path method (CPM) system can also be used as a cost-monitoring
system
 In the1960s, U.S. defense agencies combined guides and requirements related
to integration of cost and schedule data into a single system

Aims of Project Cost Control System
5
 To identify those work types having excessive costs and

to give an indication of how serious those overruns are
 To forecast the final total job cost
 To indicate the trend for each cost code, that is, whether
the unit cost involved has been increasing or decreasing
(evaluation of the effectiveness of cost reduction
efforts)
 To update the database of the company that will be used
to estimate future works

Cost Control
6
• The cost estimate prepared for the project during the

bidding process is the basis for cost control
• Cost control for an engineering project is limited to the

cost of labor, equipment, materials and site overheads
• Control of cost and time should be linked together

Three Key Indicators in Performance Measurement
7
 Budgeted Cost of Work Scheduled (BCWS)
 Budgeted Cost of Work Performed (BCWP)

 Actual Cost of Work Performed (ACWP)

BCWS
8
 BCWS is the budgeted amount of cost of the work scheduled to be

accomplished in a given time period
 This can be referred to as planned value of work to be

accomplished [PV]

BCWP
9
 BCWP is the budgeted amount of

cost for the work completed in a Schedule Variance, SV
given time period.
 This can be referred to as earned BCWP
SV=BCWP-BCWS
value of work accomplished [EV]
Project Cost (SR)

 How to calculate BCWP
 Budgeted cost for work performed
(BCWP) = Earned value of an activity = BCWS
Time Now
Percent completed for the activity × the
activity budget
Time
 Percent completed for an activity =
[(Projected duration – Remaining SV>0: ahead of schedule
duration) / Projected duration] ×100 SV<0: behind schedule

ACWP
10
 ACWP is the amount reported as Cost variance, CV

actually spent in completing the
particular work accomplished ACWP
within a given time period CV=BCWP-ACWP
Project Cost (SR)

BCWP
Time Now
Time
CV>0: under budget

CV<0: over budget

Performance Equations
Symbol Definition ‫التعريف‬
(BCWS) [PV]” Budgeted Cost of Work Scheduled “planned value of work to be accomplished ‫التكلفة المقدره في الميزانيه لﻸعمال المجدولة‬
(BCWP) [EV] Budgeted Cost of Work Performed “earned value of work accomplished ‫التكلفة المقدره في الميزانيه لما تم من أعمال‬
(ACWP) [AC] Actual Cost of Work Performed ‫التكلفة الفعلية لما تم من أعمال وتم دفعها‬
Cost Performance >0

Under budget
Work performed cost > Actual cost
BCWP Within budget
Cost Variance CV = BCWP-ACWP =0
ACWP Work performed cost = Actual cost
<0
Over budget
Work performed cost < Actual cost
Cost Performance >1 Under budget

Work performed cost > Actual cost
BCWP Within budget
Cost Performance Index CPI = BCWP/ACWP =1
ACWP Work performed cost = Actual cost
<1 Over budget

Work performed cost < Actual cost
Cost Performance >0

Under run
Performed cost > Earned
BCWP % Cost Overrun/ Underrun (BCWP – ACWP) on run
=0
ACWP BCWP Performed cost = Earned
Over run
<0
Performed cost < Earned
The “Cost Overrun” curve is a plot of the calculated percent over- or underrun at any given time.
Performance Equations (Contd.)
12
Schedule (Time) Performance Ahead schedule

>0
Work performed > Work scheduled
BCWP On schedule
Schedule Performance Variance SV = BCWP-BCWS =0
Work performed = Work scheduled
BCWS
Behind scheduke
<0
Work performed < Work scheduled
Schedule (Time) Performance Ahead schedule

>1
Work performed > Work scheduled
BCWP On schedule
Schedule Performance Index SPI = BCWP/BCWS =1
Work performed = Work scheduled
BCWS
Behind scheduke
<1
Work performed < Work scheduled

BCWP, BCWS and ACWP
13

Cost Forecasting Equations
14
Budget Cost At Completion BAC = BCWSend
ACWPto date Or
EAC   BAC
BCWPto date
Estimated Cost At Completion
EAC  ACWPto date 
BAC - BCWPto date 
CPI this period
Estimate to Completion ETC = EAC - ACWP
Variance from original budget VB = EAC - BAC

BCWS [PV], BCWP [EV], and ACWP[AC] – S-curves
15

Contd.
16

Problem-1
D
A C F H
0 1 2 4 5
For the following network, compute the
early and late start cumulative costs for E G
the project, and draw the conclusion. B 3
Depends Duration ES LS Cost per

Activity
on Week Time Time week, SR
A  2 0 0 400
B  4 0 3 200
C A 5 2 2 300
D A 6 2 5 400
E B, C 4 7 7 350
F B, C 2 7 7 200
G E 3 11 11 300
H D, F 3 9 11 200

Solution
(Cost based on ES)
18
A (400)
B (200)
C (300)
D (400)
E (350)
F (200)
G (300)
H (200)
week 1 2 3 4 5 6 7 8 9 10 11 12 13 14
Cost 600 600 900 900 700 700 700 950 550 550 550 500 300 300
Cum. 600 1200 2100 3000 3700 4400 5100 6050 6600 7150 7700 8200 8500 8800

Solution (Contd.)
(Cost based on LS)
19
A (400)
B (200)
C (300)
D (400)
E (350)
F (200)
G (300)
H (200)
week 1 2 3 4 5 6 7 8 9 10 11 12 13 14
Cost 400 400 300 500 500 900 900 950 950 750 750 500 500 500
Cum. 400 800 1100 1600 2100 3000 3900 4850 5800 6550 7300 7800 8300 8800

Conclusion
20
10000
9000
8000
Cummulative Cost (SR)
7000
6000
5000
4000
3000
Cumulative Cost based on ES
2000
1000 Cumulative Cost based on LS
0
0 2 4 6 8 10 12 14 16
Weeks
The above curves show that although the final cumulative cost is the
same at the end of the project but the cumulative cost at the early age of
project is substantially smaller in LS based schedule.
Problem-2
21
You are required to submit a progress report to your boss about the performance of an
activity of a project. The activity’s information as follow: number of units is (800); unit cost
is SR 12 ; and planned productivity is 100 unit/day. Performances were measured at the end
of day (3) and day (6) as follows:
Period Cost at this Number of

period units finished
day 0 to day 3 SR 3,600 250
day 4 to day 6 SR 3,700 320
a) Calculate BCWP, ACWP, and BCWS for (i) each of the two periods (i.e. day 0 to day 3
and day 4 to day 6) and (ii) to date (i.e. day 0 to day 3 and day 0 to day 6).
b) Draw a graphical report for ACWP and BCWP. Also calculate estimated cost at
completion and days by which activity is ahead or behind.

SV=BCWP-BCWS
Solution part a(i) CV = BCWP-ACWP
22
0-3 period
BCWP= (250×12)=3000
ACWP= 3600 (Given)
BCWS= (300×12)=3600
CV = BCWP-ACWP=3000-3600=-600 (over budget)
SV = BCWP-BCWS=3000-3600=-600 (Behind schedule)
Following the above procedure the above parameters can also be estimated for
4-6 period
Summary
Period BCWP ACWP BCWS
Variance STATUS
Cost Sch. Schedule Cost
0-3 SR 3000 SR 3600 SR 3600 -600 -600 Behind Over Bud.
4-6 SR 3840 SR 3700 SR 3600 140 240 Ahead under Bud.

SV=BCWP-BCWS
Solution part a(ii) CV = BCWP-ACWP
23
At 3rd day,
BCWP= (250×12)=3000 BCWS= (300×12)=3600
BAC =BCWSend = (800×12) × BAC=3600/3000×(800×12)=11,520
No. of units behind = 300-250=50 which will require =50/100 = 0.5 day to finish
At 6th day,
BCWP= (570×12)=6840
× BAC=7300/6840×(800×12)=10,246
BAC =BCWSend = (800×12)
At 6th day, No. of units behind = 600-570=30 which will require =30/100 = 0.3 day to finish
To Date Summay
Period BCWP ACWP BCWS
Variance STATUS Estimate at Day ahead
Cost Sch. Sch. Cost completion or behind
0-3 SR 3000 SR 3600 SR 3600 -600 -600 Behind Over Bud. SR 11,520 0.5
0-6 SR 6840 SR 7300 SR 7200 -460 -360 Behind Over Bud. SR 10,246 0.3

Solution Part (b)
24
b) At this rate, the contractor needs actions to reduce the cost and accelerate the time.
BCWP
ACWP

Problem-3
25
The following time-scale diagram represents a small engineering project. The budgeted cost of each
activity is shown in the table below. At the end of the 10th week, the field progress report gives you the
following information:
Activity “A” was completed on schedule.
Activity “B” started as planned but it is expected to take four weeks more.
Activity “C” started as planned but finished one week later.
Percentage completion of activity “D” is 60%.
ACWP at the end of week 10 = SR 90,400
Time (week)
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23
A (5 weeks) B (8 weeks) E (7 weeks) F (3 weeks)
C (5weeks) D (6 weeks) G (4 weeks)
Activity A B C D E F G
Budgeted cost (SR) 50000 12000 16000 24000 12000 21000 20000
Calculate the CV, SV, BAC, EAC, ETC, and comment on the progress of the work.

Solution
• Percentage completion of activity “A” = 100%
• Projected duration of activity “B” = 8 + 4 = 12 weeks
• Percentage completion of activity “B” = 5/12×100 = 41.67%
• Percentage completion of activity “C” = 100%
• BCWS10 = A + C + 5/8×B + 5/6×D = 50000 + 16000 + 5/8×12000 + 5/6×24000 = SR
93500 [Note: 5/8 & 5/6 represent ratio of completion of activities B&D with respect to
scheduled duration]
• BCWP10 = A + C + 0.4167×12000 + 0.60×24000 = SR 85400 [Note: 0.4167 & 0.6
represent ratio of completion of activities B&D with respect to actual completion
duration]
• CV = BCWP – ACWP = 85400 – 90400 = SR -5000 (Over Budget)
• SV = BCWP – BCWS = 85400 – 93500 = SR -8100 (Behind Schedule)
• BAC = 50000 + 12000 + 16000 + 24000 + 12000 + 21000 + 20000 = SR 155000
• EAC = [ACWP/BCWP] ×BAC = [90400/85400] × 155000 = SR 164075
• ETC = EAC – ACWP = 164075 – 90400 = SR 73675
Problem-4
27
The following eight activities constitute an overall bar chart project that has twenty-week. Now 10
weeks finished on the project with and the project manager has the following Data:
•The weekly planned percentage of completion (inside each activity bar),
•The actual percentage of completion up to week 10 (in below activity bar and table),
•The Budget cost of each activity (in the table),
•Actual Expenses up to week 10 of each activity (in below table),
•The Critical Path is A-B-C-D (Colored bar), and Total Float of each activity (dash lines)

Problem-4 (contd.)
28
For this point in time (10 weeks after the start date):
a) Calculate the values of the BCWP and BCWS for each activity?
b) For each activity in progress, calculate the Cost and Schedule Performed Indices and
state its budget and schedule status.
c) Draw the weekly cumulative BCWS of activity B, determine its delay/ahead week, and
whether it will delay/accelerate the project or not and why.
d) Determine the project cost variance and state if the project is over or under budget.
e) Based on the performance of past 10 weeks, forecast the project completion cost at the
end of the project, and its variance from original project budget.

Solution
29
Parts (a) and (b)
Over Bud. On Sched.
Under Bud. On Sched.
Under Bud. On Sched.

Solution (Contd.) Part (c): Cumulative BCWS of activity B with time
11000 Note:
The cost is
10000 cumulative
9000 and weeks
are the
8000 weeks of
activity B
7000 (not the
SR
6000 weeks of the

project)
5000
BCWP at the
4000 end of week
3000 10 (i.e. at the
end of week
2000 ½ 5 of activity
Week B) = SR
1000 6000.
0
0 1 2 3 4 5 6 7
Week
From the graph, as per schedule, SR 6000 should have been spent at the end of
4.5th week, but actually it is spent at the end of 5th week. This shows that the
activity is delayed by 0.5 week.
This activity (i.e. B) will delay the project because it is a critical activity.
Solution(Contd.)
31
Part (d)
Project cost Variance = BCWPproject ACWPproject
= 30,70030,400 = SR 300 (under budget)
Part (e)
Budgeted Cost At Completion (BAC) =  Budget Cost = SR 54,000
Estimated Cost At Completion (EAC) = [ACWP/BCWP]×BAC = SR 53,472.3
OR
Estimated Cost At Completion (EAC) = ACWP + [(BAC – BCWP) / CPI] = SR 53,472.3
Variance from original project budget = EAC  BAC = SR -527.7 (Under budget)
Since EAC < BAC Project is performing under budget.

Further Reading
32
Read more about the Project Cost Control from Chapter 10 of:


Thank You
33

(GE 404)
LECTURE # 12
Time-Cost Trade-Offs

Contents
2

 Time-Cost Trade-offs
 Reasons to reduce project duration
 Methods to reduce project duration
 Types of Costs and project time-cost relationship
 Project crashing and cost slope
 Compression or Crashing the project schedule
 Basic steps in project crashing
 Network interaction limit (Nil)
 Network compression algorithm
 Problem
 Further reading

3
 To discuss project time-cost relationship

 To explain the steps involved in project crashing

Time-Cost Trade-offs
(Time-Cost Relationship)
4
 There is a relationship between a project’s time to

completion and its cost.
 By understanding the time-cost relationship, one is better
able to predict the impact of a schedule change on
project cost.
 Time-cost trade-off, in fact, is an important
management tool for overcoming one of the critical
path method limitations of being unable to bring the
project schedule to a specified duration.

Reasons to Reduce Project Durations
5
 To avoid late penalties

 To realize incentives for timely or early competition of a
project
 To beat the competition to the market (influences Bid
price)
 To free resources for use on other projects
 To reduce the indirect costs
 To complete a project when weather conditions make it
less expensive

Methods to reduce Durations
6
1. Overtime: Have the existing crew work overtime. This increase the
labor costs due to increase pay rate and decrease productivity.
2. Hiring and/or Subcontracting:
a) Bring in additional workers to enlarge crew size. This increases
labor costs due to overcrowding and poor learning curve.
b) Add subcontracted labor to the activity. This almost always
increases the cost of an activity unless the subcontracted labor
is far more efficient.
3. Use of advanced technology: Use better/more advanced equipment.
This will usually increase costs due to rental and transport fees. If
labor costs (per unit) are reduced, this could reduce costs.

Types of Costs
7
 Direct Costs
Direct costs are those directly associated with project activities such as
cost of labor, equipment and materials, salaries.
 If the duration of activities is decreased in order to decrease project
completion time, the direct cost generally increase since more resources
must be allocated to accelerate the activity.
 Indirect Costs
 Indirect costs are those overhead costs that are not directly associated with
specific project activities such as office space, administrative staff, and
taxes.
 Such costs tend to be relatively steady per unit time over the life of the
project.
 Total indirect costs increase as the project duration increases.
 Note: Project cost is the sum of the direct and indirect costs.
Project Time-Cost Relationship
8
Note: It should never be assumed that the quantity of resources deployed and the task duration
are inversely related.
Thus one should never automatically assume that the work that can be done by one man in 16 weeks can
actually be done by 16 men in one week.
Project Crashing and Cost Slope
9
 Shortening the duration of a project is
called project crashing
 The minimum possible duration of an
activity (which implies maximum cost) is
called the Crashed duration and
corresponding cost is called Crashed cost
 Thus the crash time is the shortest time in
which an activity can be completed
 Duration of an activity which implies
minimum direct cost is called the normal
duration and corresponding cost is called
normal cost
 The slope of the line connecting the normal
point (lower point) and the crash point
(upper point) is called the cost slope of the
activity.
 The slope of this line can be calculated
mathematically by knowing the coordinates
of the normal and crash points.
Cost slope 
Crash cost - Normal cost  
Cd  CD 
Normal duration - Crash duration  D  d 
Problem-1
10
Activity
Cost Calculate the Crash
Crash cost/ week for the
shown linear time-cost
$34,000 —
trade-off for an activity.
Crash $33,000 —
Cost, Cd
$32,000 —
$31,000 —
$30,000 —
Normal
Normal —
Cost, CD
| | |
1 2 3 Time (Weeks)
Crash Time, d Normal Time, D
Solution
11
Cost slope 
Crash cost - Normal cost  
Cd  CD 
Normal duration - Crash duration  D  d 
($34,000  $30,000)
  $2,000 / Week
(3  1)
 Crash cost/week  Cost slope  $2,000 / Week Ans.

Compressing or Crashing the Project-Schedule
12
 Compressing or Crashing the project schedule refers to

the acceleration of the project activities in order to
complete the project sooner.
 The time required to complete a project is determined
by the critical path, so to compress a project schedule
one must focus on critical path activities.

Basic Steps in Project Crashing
13
1. Compute the crash cost per time period

2. Using current activity times, find the critical path and identify
the critical activities
3. If there is only one critical path, then select the activity on this
critical path that (a) can still be crashed, and (b) has the
smallest crash cost per period.
4. If there is more than one critical path, then select one
activity from each critical path such that (a) each selected
activity can still be crashed, and (b) the total crash cost of all
selected activities is the smallest.
5. Note that the same activity may be common to more than one
critical path.
6. Update all activity times. If the desired due date has been
reached, stop. If not, return to Step 2.

Problem-2
For the small project shown in the table, it is required reduce the project duration by
(i) 2 periods.
(ii) 5 periods.
Normal Crash
Activity Precedence
Time, day Cost, $ Time, day Cost, $
A - 4 210 3 280
B - 8 400 6 560
C A 6 500 4 600
D A 9 540 7 600
E B,C 4 500 1 1100
F C 5 150 4 240
G E 3 150 3 150
H D,F 7 600 6 750
Σ 3050 4280

Solution
Step 1: Develop Network
15
9
D
4 6 5 7
A C F H
START FINISH
8 4 3
B E G

Step 2:Calculate Times and Find CP
16
4 9 13
D
6 2 15
0 4 4 4 6 10 10 5 15 15 7 22
A C F H
0 0 4 4 0 10 10 0 15 15 0 22
0 0 0 22 0 22
START FINISH
0 0 0 22 0 22
0 8 8 10 4 14 14 3 17
B E G
7 7 15 15 5 19 19 5 22
• Project completion time = 22 working days Total float 0 7 0 2 5 0 5 0
• Critical Path: A, C, F, H. Free float 0 2 0 2 0 0 5 0

Step 3: Calculate Cost Slope
17
Normal Crash Cost Slope,

Activity Precedence $/day
Time, day Cost, $ Time, day Cost, $
A - 4 210 3 280 70
B - 8 400 6 560 80
C A 6 500 4 600 50
D A 9 540 7 600 30
E B,C 4 500 1 1100 200
F C 5 150 4 240 90
G E 3 150 3 150 **
H D,F 7 600 6 750 150
Σ 3050 4280
Note:
1- G can not expedite
2- Among the critical activities the lowest slope is for activity C, so it can be expedited on
critical
GE 404 path by 2 Management)
(Engineering periods 20 January, 2021
Step 4(a): Reduce 2 periods of activity C
Solution-(i)
18
ES LS
Activity
4 9 13 EF TF LF
D Crash limit (d @ cost)

4 0 13
increase of cost (2×50) = $100
0 4 4 4 4 8 8 5 13 13 7 20
A C F H
0 0 4 4 0 8 8 0 13 13 0 20
0 0 0 20 0 20
START FINISH
0 0 0 20 0 20
0 8 8 8 4 12 12 3 15
B E G
5 5 13 13 5 17 17 5 20
Total float 0 5 0 0 5 0 5 0 • Project completion time = 20 working days
Free float 0 0 0 0 0 0 5 0 • Critical Path: A, C, F, H. & A, D, H
Step 4(b): Reduce 1 period of activity A
19
Increase of cost = $70
3 9 12
D
3 0 12
0 3 3 3 4 7 7 5 12 12 7 19
A C F H
0 0 3 3 0 7 7 0 12 12 0 19
0 0 0 19 0 19
START FINISH
0 0 0 19 0 19
0 8 8 7 4 11 11 3 14
B E G
8 4 12 12 5 16 16 5 19
• Critical Path: A, C, F, H. & A, D, H Total float 0 4 0 0 5 0 5 0
Free float 0 0 0 0 0 0 5 0
Step 4(c): Reduce 1 period of 2 activities (D,F)
20
Increase of cost (30+90) = $120
3 8 11
D
3 0 11
0 3 3 3 4 7 7 4 11 11 7 18
A C F H
0 0 3 3 0 7 7 0 11 11 0 18
0 0 0 18 0 18
START FINISH
0 0 0 18 0 18
0 8 8 7 4 11 11 3 14
B E G
3 3 11 11 4 15 15 4 18
Total float 0 3 0 0 4 0 4 0
• Critical Path: A, C, F, H. & A, D, H
Free float 0 0 0 0 0 0 4 0

Step 4(d): Reduce 1 period of activity H
21
Increase of cost = $150
3 8 11
D
3 0 11
0 3 3 3 4 7 7 4 11 11 6 17
A C F H
0 0 3 3 0 7 7 0 11 11 0 17
0 0 0 17 0 17
START FINISH
0 0 0 17 0 17
0 8 8 7 4 11 11 3 14
B E G
2 2 10 10 3 14 14 3 17
 Project completion time = 17 working days

 Critical Path: A, C, F, H. & A, D, H
Total float 0 2 0 0 3 0 3 0
Free float 0 0 0 0 0 0 3 0

Step 5: Solution (ii)
22
Cycle Activity Time cost Total cost Duration

Reduction of project
0 - 3050 22 duration from 22 to 17
1 C 2 100 3150 20 days increases the cost to
$3490.
2 A 1 70 3220 19
3 D,F 1 30+90 3340 18
4 H 1 150 3490 17
Normal Crash Cost Slope,

3600 Activity Precedence
Time, day Cost, $ Time, day Cost, $ $/day
3500 A - 4 210 3 280 70
3400 B - 8 400 6 560 80

Cost
C A 6 500 4 600 50
3300
D A 9 540 7 600 30
3200 E B,C 4 500 1 1100 200
3100 F C 5 150 4 240 90
3000 G E 3 150 3 150 **

16 17 18 19 20 21 22 23 H D,F 7 600 6 750 150
Project Duration Σ 3050 4280

Network Interaction Limit (Nil)
23
 Crash limit
Free Float of any of the non critical activities
Nil  Min 
in the parallel paths competing for critical path

Network Compression Algorithm
24
1. Determine normal project duration, cost and Critical Path

2. Compute the cost slope and shorten the Critical Activities beginning with the activity
having the lowest cost-slope
3. Determine the compression limit (Nil), organize the data in the tabular form and
update the project network
4. When a new Critical path is formed:
1. Shorten the combination of activity which Falls on both Critical Paths, OR
2. Shorten one activity from each of the critical paths. Use the combined cost of shortening
both activities when determining if it is cost effective to shorten the project.
5. At each shortening cycle, compute the new project duration and project cost
6. Continue until no further shortening is possible
7. Tabulate and Plot the Indirect project Cost on the same time-cost graph; and add direct
and indirect cost to find the project cost at each duration
8. Use the total project cost-time curve to find the optimum time

Note
25
For large network, use criticality theorem to eliminate the

noncritical paths that do not need to be crashed.
 Eliminate Activities with having TF > the required project
reduction time.

Problem-3
26
The durations and direct costs for each activity in the network of a small
construction contract under both normal and crash conditions are given below.
Establish the least cost for expediting the contract. Determine the optimum
duration of the contract assuming the indirect cost amounts SR 125/week.
38470

We have one critical path, A-C-G- I.
Solution Either crash A at cost SR 100/week or
crash C at cost SR 200/week or
Cycle #1 crash G at cost SR 60/week or
crash I at cost SR 75/week.
20 23 43
D 4
24 4 47
0
0 12 12 12 8 20 20 5 25 27 20 47 47 12 59
A B E G I
0 0 12 14 2 22 22 2 27 27 0 47 47 0 59
2@100 2@150 1@50 5@60 2@75
2
12 15 27 27 5 32 32 13 45
C F H ES D EF
12 0 27 29 2 34 34 2 47 Activity
3@200 1@300 2@40 LS TF LF
Crash limit
Activity Cost
Cycle Can Be Weeks Cost for Total Project
to Nil per
# Shortened Shortened Cycle Cost Duration
Shorten Week
0       36,500 59
1 G 5 2 2 60 120 36,620 57
Now we have two critical paths:
A-C-F-H-I and A-C-G- I.
Cycle #2
Either crash A at cost SR 100/week or
crash I at cost SR 75/week or
crash F and G at cost SR 360/week or 20 23 43
crash H and G at cost SR 100/week.
D 2
22 2 45
0
0 12 12 12 8 20 20 5 25 27 18 45 45 12 57
A B E G I
0 0 12 14 2 22 22 2 27 27 0 47 45 0 55
2@100 2@150 1@50 3@60 2@75
12 15 27 27 5 32 32 13 45
C F H ES D EF
12 0 27 27 0 32 32 0 45 Activity
3@200 1@300 2@40 LS TF LF
Crash limit
Activity Cost
to Nil per
Shorten Week
0       36,500 59
1 G 5 2 2 60 120 36,620 57
2 I 2  2 75 150 36,770 55
A-C-F-H-I and A-C-G- I.
Cycle #3 Either crash A at cost SR 100/week or
20 23 43 crash F and G at cost SR 360/week or
D 2
22 2 45
0
0 12 12 12 8 20 20 5 25 27 18 45 45 10 55
A B E G I
0 0 12 14 2 22 22 2 27 27 0 45 45 0 55
2@100 2@150 1@50 3@60 0
12 15 27 27 5 32 32 13 45
C F H ES D EF
12 0 27 27 0 32 32 0 45 Activity
3@200 1@300 2@40 LS TF LF
Crash limit
Activity Cost
to Nil per
Shorten Week
0       36,500 59
1 G 5 2 2 60 120 36,620 57
2 I 2  2 75 150 36,770 55
3 A 2  2 100 200 36,970 53
Cycle #4 A-C-F-H-I and A-C-G- I.
Either crash C at cost SR 200/week or
18 23 41 crash F and G at cost SR 360/week or
D 2
20 2 43
0
0 10 10 10 8 18 18 5 23 25 18 43 43 10 53
A B E G I
0 0 10 12 2 20 20 2 25 25 0 43 43 0 53
0 2@150 1@50 3@60 0
10 15 25 25 5 30 30 13 43
C F H ES D EF
10 0 25 25 0 30 30 0 43 Activity
3@200 1@300 2@40 LS TF LF
Crash limit
Cost
Cycle Activity to Can Be Weeks Cost for Total Project
Nil per
# Shorten Shortened Shortened Cycle Cost Duration
Week
0       36,500 59
1 G 5 2 2 60 120 36,620 57
2 I 2  2 75 150 36,770 55
3 A 2  2 100 200 36,970 53
4 H, G 2 2 2 60+40 200 37,170 51
Now we have three critical paths;
Cycle #5 A-C-F-H-I, A-C-C- I, and A-B-D- I.
18 23 41 Either crash C and B at cost SR 350/wk or
D crash F, G and B at cost SR 510/wk.
18 0 41
0
0 10 10 10 8 18 18 5 23 25 16 41 41 10 51
A B 0 E G I
0 0 10 10 0 18 20 2 25 25 0 41 41 0 51
0 2@150 1@50 1@60 0
10 15 25 25 5 30 30 11 41
C F H ES D EF
10 0 25 25 0 30 30 0 41 Activity
3@200 1@300 0 LS TF LF
Crash limit
Activity to Can Be Weeks Cost per Cost for Total Project
Cycle # Nil
Shorten Shortened Shortened Week Cycle Cost Duration
0       36,500 59
1 G 5 2 2 60 120 36,620 57
2 I 2  2 75 150 36,770 55
3 A 2  2 100 200 36,970 53
4 G, H 2 2 2 60+40 200 37,170 51
5 B, C 2  2 150+200 700 37,870 49
Final Results 16 23 39
D
16 0 39
0
0 10 10 10 6 16 16 5 21 23 16 39 39 10 49
A B E G I
0 0 10 10 0 16 18 2 23 23 0 39 39 0 49
0 0 1@50 1@60 0
10 13 23 23 5 28 28 11 39
C F H ES D EF
10 0 23 23 0 28 28 0 39 Activity
1@200 1@300 0 LS TF LF
Crash
limit
Project Direct Indirect
Cycle # Total Cost
Duration Cost Cost
0 59 36500 7375 43875
1 57 36620 7125 43745
2 55 36770 6875 43645
3 53 36970 6625 43595
4 51 37170 6375 43545
5 49 37870 6125 43995
Project Optimal Duration
33

Home Work
34
Data on small maintenance project is given as below: On completion, the project
will give a return of SR110/day. Using time-cost trade-off method, how much
would you like to compress the project for maximizing the return (ignore the
Indirect cost effect)? Show all calculations.
Activity Depends Normal Crash
on Time Cost Time Cost
A  6 days SR700 4 days SR800
B  4 days 400 4 days 400
C  5 days 650 4 days 700
D A 8 days 625 5 days 700
E B 10 days 200 7 days 350
F B 7 days 500 5 days 700
G C 3 days 600 3 days 600
H D, E 6 days 300 5 days 400
I F, G 7 days 350 4 days 425
Hint: If the project is compressed by n days, the return amount will be n*110 and total cost after
compressing by n days will be obtained by the routine procedure. That n has to be searched which
makes the difference of the above two costs maximum.
Further Reading
35
Read more about the Time-Cost Trade-offs from:


Thank You
36

GE 404
Engineering Management
Lecture #13
Outlines of Microsoft Project Software
GE 404: Engineering Management 1 20 January, 2021

Contents

 Basic Interface of Microsoft Project 2013
 Defining Project Information and Project Properties
 Creating and Assigning Calendar to the Project
 Entering and Editing Project Tasks (or Activities)
 Assigning, Leveling and Allocating Resources
 Creating Baseline, Tracking Progress and Rescheduling Tasks
 Cash Flow and Project Reports
 Demo Problems

3
 To give an outline of MS Project 2013 software

 To explain some of the tools of MS Project 2013
 To demonstrate helpfulness of MS Project 2013 in
solving various Engineering management problems.
GE 404: Engineering Management 20 January, 2021

Basic Interface of MS Project
4
Note: The shown

interface is for
Microsoft Project
2010. Similar
interface exists for
Microsoft Project
2013

Defining Project Information and Project Properties
5
 Create a New Project:
 File→ New → Blank Project

 Project Information
 Project →Properties → Project Information (Enter dates e.g. start

date, finish date; status date; current date etc.)
 To set ES or LS based schedule
 Schedule From → Project start date (all tasks begin on ES i.e. as soon as possible)
 Schedule From → Project Finish date (all tasks begin on LS i.e. as late as possible)
 Project Properties (e.g. Project title, Project manager etc.)
 File → Info →Project Information → Advanced Properties

Creating and Assigning Calendar to the Project
6
 Create New Calendar

Project → Change working time →Create New calendar
 Work Weeks →Details →Set days to working times (or Set days to
nonworking time)
 To Set Working Time: Enter the working time e.g. : 8:00 AM – 12:00
PM; 1:00 PM-5:00 PM
 Assign ‘new calendar’ to the Project
 Project → Properties → Project Information →Calendar (Select the
defined calendar)

Entering and Editing Project Tasks (or Activities)
7
 Entering tasks
Task →Gantt Chart → Gantt Chart or Task sheet (Enter the tasks)
 Organizing tasks into phases
 In the entered tasks use indent to create phases
 Adding a recurring tasks

 Task →Insert → +Task → Recurring task
 Displaying WBS Codes

 In the work sheet add new Column → Select the Name → WBS

Contd.
8
 Defining predecessors
In a cell of Predecessor column→ Right click → Information→
Predecessors →Enter Task ID, Type and Lag
 Splitting tasks
 Task →Schedule → Split task
 Setting task constraints

 In a cell→ Right click → Information→ Advanced →Enter
constraint information
 Setting milestones
 Enter in the worksheet a task with zero duration

Precedence Diagram and Critical Tasks
9
 Seeing Critical Tasks

Task →view → Gantt Chart → Format →Critical Tasks
 To see Total slack and/or Free slack
 In a work sheet select new column and in the top cell (click
twice)→Total Slack
 To see Network diagram
 Task →view → Gantt Chart → Network Diagram
 To Print Network diagram

 File→ Print→ Page setup →Fit to 1 pages wide by 1 tall →Print

Assigning, Leveling and Allocating Resources
10
 Adding Resources
View → Resource views→ Resource Sheet (Enter resource Name, Type
Cost (rate /hour or /day) etc.)
 Assigning resources to tasks
 View → Gantt Chart →Go to Resource names → Right click to go to
Information →Enter the resources
 To not have leveling during assigning resources go to resource tab and clear
leveling
 View the resource Graph
 View → Other views →Resource Graph
 Resource leveling and allocation

 Resource →Level → Leveling Options →(To perform leveling without
effecting the project duration, select “level only within the available slack”)
 Resource → Level → Level Resource → Level Now
Creating Baseline, Tracking Progress and
Rescheduling Tasks
11
 To compare how project is changing over time Baselines are set

 Project→ Schedule → Set Baseline
 To see the variance with respect to Baseline
 View→ Data → Tables →Variance
 Tracking a Project as scheduled

 Add one column in task sheet to show % complete
 Project→ Status → Status Date
 Project→ Status → Update Project
 Entering actual values for tasks

 View→ Data → Tables →Work
 Rescheduling uncompleted Tasks

 Project→ Status → Update Project → Reschedule uncompleted work to
start after
Cash Flow and Project Reports
12
 To view reports
 Report→ View Reports →Costs →Cash Flow
 To print the report
 File→ Print → Print Entire Project

Building a Bridge
13

Bar Chart
14

Demo Problem-1 (Bar Chart)
15
The following table shows the
Activity Duration Dependency
durations (in days) and (days)
dependencies for eight activities
marked A to H for an engineering A 2 -
project. B 4 -
(a) Draw the Gantt Bar Chart C 3 F
(b) Determine the critical path D 2 A
(c) Determine the earliest period E 5 B and D
of completing the project (i.e. F 4 A
Project Duration).
G 3 E and C
H 2 G

Manual Solution
16
Days
Weeks
Activity (Duration) Pre.
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
A (2) None
B (4) None
C (3) F
D (2) A
E (5) B, D
F (4) A
G (3) E, C
H (2) G
(b) Critical Paths are:
A-D-E-G-H
A-F-C-G-H
B-E-G-H Note: All the activities are critical.
(c) Project Duration is: 14 days

Solution of Microsoft Project
17
Project Duration = 2 weeks+4 days= 14+4 = 18 calendar days Network diagram

indicates all activities
Project Duration = 18-2×2 = 14 Working days are critical.

Demo Problem-2 (AON and Floats)
18
Consider the various activities
given in the table. Durations
(a) Draw AON (Activity-On- Activity Predecessors (Days)
Node) diagram and calculate free A -- 4
float and total float for each B A 7
activity. C A 3
(b) Show the critical activities D B 8
and critical path in the above E B, C 2
network diagram. F C 9
G D, E, F 4

Manual Solution
19
(a) AON and floats for each activity.
(b) A, B, D and G are critical activities and A-B-D-G is a critical path.

20
Total and free floats(slacks) for each activity.
A, B, D and G are critical

activities and A-B-D-G is
a critical path.

Demo Problem-3 (Precedence diagram)
21
Consider the same activities as
given in the demo problem-2 but Durations
with some lead-lag relationships Activity Predecessors (Days)
as given below the table. A -- 4
(a) Draw AON (Activity-On- B A 7
Node) diagram and calculate free C A 3
float and total float for each D B 8
activity. E B, C 2
(b) Show the critical activities F C 9
and critical path in the above G D, E, F 4
network diagram. Lead-Lag

Related activities relationships
B-D FS = 2
C-F SS = 9
E-G FS = 9

Manual Solution
22
(a) Precedence diagram and floats for each activity.
(b) Except D all activities are critical, and A-B-E-G; A-C-E-G; A-C-F-G are critical
paths.

23
Total and free floats(slacks) for each activity.
Except D all activities are critical, and A-B-E-G; A-C-E-G; A-C-F-G are critical paths.
Demo Problem-4 (Resource Levelling)
24
The following activity list
represents the job logic, the Resource
durations of activities and resource Predecessor Duration requirement
Activity (s) (days) (per day)
demands of each activity on each A None 3 3
B A 2 3
day for a small project. C A 2 2
(a) Draw Early Start Time-scaled D
E
B
D
3
6
3
7
schedule for the project and show F
G
C, D
A
5
3
2
4
the resource requirement for each H E 6 3
day.
(b) Using Estimated method of
levelling procedure, level the
resources in maximum two trials.
Assume there is no resource
constraint for any activity.

Manual Solution
25
(a) Early start based Time-scaled schedule
T (Days) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
A B D E H
3 3 3 3 3 3 3 3 7 7 7 7 7 7 3 3 3 3 3 3
C F
2 2 2 2 2 2 2
G
4 4 4
R 3 3 3 9 9 7 3 3 9 9 9 9 9 7 3 3 3 3 3 3
2
ΣR 9 18 27 108 189 238 247 256 337 418 499 580 661 710 719 728 737 746 755 764

Trial-1
T (Days) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 (b) Resource leveling
A B D E H
3 3 3 3 3 3 3 3 7 7 7 7 7 7 3 3 3 3 3 3
C F
2 2 2 2 2 2 2
G
4 4 4
R 3 3 3 5 5 7 7 7 9 9 9 9 9 7 3 3 3 3 3 3
ΣR2 is decreased
ΣR
2
9 18 27 52 77 126 175 224 305 386 467 548 629 678 687 696 705 714 723 732 from 764 to 732.
Trial-2
T (Days) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
A B D E H
3 3 3 3 3 3 3 3 7 7 7 7 7 7 3 3 3 3 3 3
C F
2 2 2 2 2 2 2
G
4 4 4
R 3 3 3 5 5 7 7 7 7 7 7 7 7 7 5 5 5 5 5 3 ΣR2 is reduced
2
ΣR 9 18 27 52 77 126 175 224 273 322 371 420 469 518 543 568 593 618 643 652
from 732 to 652.
As ΣR2 is minimum in the second trial, the schedule shown above in
trial-2 is having the most leveled resources.
27
Resource sheet:

Resource graph (Before levelling)
(Manual)

Levelling Options
29

Resource graph (After Levelling)
(Manual)

Demo Problem-5 (Resource Allocation)
31
A small engineering project is
planned as shown below in the
Activity-on-Node (AON)
diagram. The number of resources
required for each activity are
shown under each activity box.
(a) Allocate the resources to the
activities if the maximum
available resource for any day are
six only.
(b) Estimate the planned cost of
each activity and entire project if
each resource cost $100.0/day.

Manual Solution
32

Resource allocation
33
T (Days) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26
A B B B G G G G G G G G G X
EAS C C C H F
D G
D C H F G X
OSS C B G G
B G
A
4 4 4
D
5 5 5 5 5
C
3 3 3 3
B
2 2
H
2 2 2 2 2
F
3 3 3 3 3
G
4 4 4 4
X
1 1 1 1 1
R 4 4 4 5 5 5 5 5 5 5 5 5 5 5 5 3 3 4 4 4 4 1 1 1 1 1
ΣR 4 8 12 17 22 27 32 37 42 47 52 57 62 67 72 75 78 82 86 90 94 95 96 97 98 99
Planned Cost of the project = 99×100 = $9,900

Planned Cost of Activities and Project
34
Activity Duration Resources Planned Cost

(days)
A 3 4 4×(100×3) = $1200
B 2 2 2×(100×2) = $400
C 4 3 3×(100×4) = $1200
D 5 5 5×(100×5) = $2500
H 5 2 2×(100×5) = $1000
F 5 3 3×(100×5) = $1500
G 4 4 4×(100×4) = $1600
X 5 1 1×(100×5) = $500
Project planned cost = $ 9,900

35
Resource sheet:

Resource graph (Before Resource Allocation)

Levelling Options
37

Resource graph (After Resource Allocation)
(Manual)

Planned Costs
39
Manual Planned Cost of the project =

99×100 = $9,900

Microsoft Project Assignment
40

Thank You
41

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‫ﺑﺴﻢ ﷲ الرحمن الرحيﻢ‬

GE 404 (Engineering Management) 20 January, 2021

Abdulrahman A. Bin Mahmoud, PhD

Tuesday & Thursday 9-11pm, or by appointment

GE 404 (Engineering Management) 20 January, 2021

 Name and Major?

 What do you think of distance/ online education?

GE 404 (Engineering Management) 20 January, 2021

GE 404 (Engineering Management) 20 January, 2021

 Objectives of the present lecture

GE 404 (Engineering Management) 20 January, 2021

 To provide an overview of the course contents

GE 404 (Engineering Management) 20 January, 2021

 Introduction to project management objectives

GE 404 (Engineering Management) 20 January, 2021

Project Management with

GE 404 (Engineering Management) 20 January, 2021

GE 404 (Engineering Management) 20 January, 2021

Students completing this course successfully will be able to:

GE 404 (Engineering Management) 20 January, 2021

GE 404 (Engineering Management) 20 January, 2021

GE 404 (Engineering Management) 20 January, 2021

 A project is a set of tasks or activities

GE 404 (Engineering Management) 20 January, 2021

 A project has a unique purpose

GE 404 (Engineering Management) 20 January, 2021

 Construction of building and infrastructure

GE 404 (Engineering Management) 20 January, 2021

GE 404 (Engineering Management) 20 January, 2021

The main levels of management are:

GE 404 (Engineering Management) 20 January, 2021

 Top Level Management

GE 404 (Engineering Management) 20 January, 2021

 Figure below shows the involvement % of the different

Management Management Management

GE 404 (Engineering Management) 20 January, 2021

GE 404 (Engineering Management) 20 January, 2021

 Project management, is the application of knowledge, skills,

GE 404 (Engineering Management) 20 January, 2021

 A project manager is the person who has the overall

GE 404 (Engineering Management) 20 January, 2021

GE 404 (Engineering Management) 20 January, 2021

GE 404 (Engineering Management) 20 January, 2021

GE 404 (Engineering Management) 20 January, 2021

GE 404 (Engineering Management) 20 January, 2021

GE 404 (Engineering Management) 20 January, 2021

Read more about the Project Management Institute (PMI) from:

GE 404 (Engineering Management) 20 January, 2021

GE 404 (Engineering Management) 20 January, 2021

GE 404 (Engineering Management) 20 January, 2021

 Objectives of the Present Lecture

GE 404 (Engineering Management) 20 January, 2021

 To learn the ways through which organizational

GE 404 (Engineering Management) 20 January, 2021

 One of the important decisions of project management is

GE 404 (Engineering Management) 20 January, 2021

GE 404 (Engineering Management) 5 20 January, 2021

 The main objective of Project organization is to

GE 404 (Engineering Management) 20 January, 2021

 Within the firm