1

Project Planning and

Scheduling

1.1 Introduction

A project during its various stages of implementation is impacted by

multiple elements viz. actors, factors, activities and events. These
elements, their interaction, inter-dependencies and interrelationships
make the entire process a complicated and complex which has serious
repercussions for efficient and successful delivery of the project.
Figure 1.1 below depicts such intricacies involved in a project. It is not
that these elements come by choice rather it is the natural corollary of
project formulation and its implementation which happens to be an integral
part of the project irrespective of its size, duration, complexities or
geographical location. The challenge for a PM is to deliver the project
successfully despite these risks, uncertainties and complexities. It is in this
context that planning and scheduling become immensely important for
efficient implementation of the projects.

Fig. 1.1
2 Project Planning and Management with CPM & PERT

1.2 Project Planning

Planning is a broad term and encompasses in its fold anything to everything

that is required for successful completion of a project. Fundamentally, it
entails charting all necessary tasks or activities for project completion. The
planning phase often involves creating a project management plan to guide
the team involved in the project. A project necessarily consists of multiple
activities, jobs or tasks for its implementation. Identifying all such activities
is fundamental for an overall assessment of the work required to be
performed for completing the project. Correct and systematic identification
of all such possible activities can be done by an experienced, matured and
competent person having a clear understanding of the going of a project. At
the initial stage of a project, this process of identifying all possible activities,
necessary for successful delivery of a project is defined as project planning.

Fig. 1.2: Project Planning and Scheduling at a glance

1.3 Project Scheduling

Once the activities have been identified, the next important process is to
arrange them in a correct sequence and allotting realistic time for their
execution. This process of determining the sequential order of planned
activities, assign them realistic time duration and determine the start
and finish date for each activity is referred as project scheduling. Project
scheduling becomes complicated in view of the complexities involved, risks
associated and difficulties encountered in defining the logical sequence of
the activities due to their multiplicity of interactions, interdependencies
and interrelationships.
Project Planning and Scheduling 3

Therefore, project planning is a prerequisite for project scheduling

as there is no way to determine the sequence or start and finish dates of
the activities until they are identified. The real test of the project planner
lies in his ability to identify all the tasks required to complete the project
and arrange the tasks so identified sequentially, logically and rationally
in unequivocal terms. This is the fundamental principle for successfully
managing a project. Thus, technically, both planning and scheduling are
integral parts of the project management.
In general project terms, planning and scheduling are used
synonymously as they complement each other in the going of a project.
For example, once a list of activities for a project is identified, planned
and scheduled, but, during certain stages of the project there may be a
requirement of rescheduling. In such a case, certain additional activities
may be required to be incorporated and some may be rearranged in the
proposed schedule to deliver the project.

1.4 Planning is the Heart of Good Project Management

Project planning encompasses communication, coordination and controlling

the work of multiple parties involved in it. This is the widest subject of project
management and is coterminous with the completion of the entire project
in totality. It provides the centre for project control where from emanate the
desired advice, suggestions, directions and information for efficient delivery
of the project. This reinforces the necessity of meticulous planning with
utmost sincerity, deep dedication and unflinching commitment added with
rigorous hard work from one and all associated with the project.
To develop an integral project plan, it is essential that work breakdown
structure (WBS) analysis is done wherein the project is broken down into
various well-defined work units that can be measured and managed. Once
the WBS is done, project team members can be selected based on the
expertise required for performing the work-units so formed. Team members
are expected to clearly define the magnitude of detail work that is required
in the project. They also have the ability to define the time and cost required
for producing the entire work in totality. Having these information i.e.
quantum of work involved, time required and cost of the project, a complete
plan for the project can be developed. For success of the project plan, it
must clearly define individual activity, responsibility, schedule, budget and
anticipated problems. In true sense, planning, scheduling and controlling
begin at the inception of the project and remain its integral part throughout
the project life cycle i.e. coterminous with the project.
4 Project Planning and Management with CPM & PERT

1.5 Key Principles for Planning and Scheduling

Planning is critical to the probable success of a project as it forms the

foundation for future actions based on past experiences. The better a
project can be described or planned the more likely it is to be a success. It
is in this context that for successful planning and scheduling of a project,
certain key principles as below need to be followed.
1.5.1 Planning must precede commencement of work: Technically,
project, is a conglomerate of diverse fields and specialties loosely lumped
together as a sector of the economy. Therefore, it is essential that meticulous
planning efforts are put in before it takes off on the ground. Commencement
of a work without planning will lead it on to the path of utter confusion and
uncertainty filled with chaos and disorder.
1.5.2 Important ingredients of project must be included: Project
planning is often focused on its schedule and less on other important
ingredients i.e. budget, quality and scope. For an integrated project plan,
it is essential that appropriate emphasis is given to all components of the
project at the planning stage itself to ensure a sound platform for project’s
efficient delivery.
1.5.3 Plan must be flexible: Project by its very nature is a complex
entity due to multiplicity of actors, factors, activities and events. Despite all
such complexities involved, a project must remain in a dynamic equilibrium
during its various phases of implementation. Furthermore, there is always
a scope for change and variation in the scope that requires additional time
for consultancy, reviews and approval. To cater for such contingencies, it
is always desirable to keep time allowance in the planning scheme of the
project.
It is worth mentioning that an optimum solution is never reached,
rather, only a good one is achievable. Therefore, the schedule prepared for
carrying out the work can never be precise and that needs to be understood
by one and all.
1.5.4 People involved in planning and scheduling must be
involved in execution: Planning of a project involves considerable time,
resource and energy of the people involved in its formulation. Intricacies of
the project, interrelationships of its various components, likely challenges
and possible solutions during its journey are fairly known to the members
of the planning team. Shifting of the members during the implementation
stage will result in a fresh start for the new incumbent from anything to
Project Planning and Scheduling 5

everything that eventually will have serious implication for successful

delivery of the project.

1.5.5 Plan must be simple and explicable: Implementation of a plan,

although carried out by responsible personnel in the chain of command of
the project or organisational hierarchy, it is through the site supervisors and
site engineers who along with sub-contractors, vendors and labour force
that play a very crucial role in the process. It is, therefore necessary that
the plan prepared for a project must be simple, easily understandable and
straight forward. Typically, ‘what’, ‘how’, ‘who’ and ‘when’ aspect of the
planning process must be spelt out in clear and unequivocal terms.
1.5.6 Plan must be communicated to all concerned: Project
planning is a form of communication and a source of information for the
personnel working on it. Therefore, once the plan is formulated, it must
be communicated to all parties concerned as any plan is worthless unless
it is known. Communication of plan among the project personnel helps in
resolving multiple issues which otherwise would prove dangerous to the
project’s health.
1.5.7 Planning must be logical and rational rather than intuitive
and emotive: Identifying various activities and their sequencing requires
tremendous effort. It is necessary that such an exercise is carried out
logically and rationally as the entire edifice has to be made on the platform
of good planning and scheduling. However, if intuition and emotion take
precedence over logic and rationality, entire planning and scheduling
process will lead the project on to the path of failure in the form of time
overrun, cost escalation, scope curtailment and quality compromise.

1.6 Responsibilities of the Client, Consultant and Contractor

Major three parties involved in a project are client, consultant and the
contractor around whom the entire scheme of a project revolves. All of
them have a common goal of successful project delivery but with different
objectives and routes. Client targets completion of the project in time,
within the estimated cost and with acceptable quality standards so as to put
the project to use by the stipulated date. Consultant tries to give attractive
and striking design features leaving a lasting impact, although at a cost.
Contractor puts his efforts to achieve a larger profit margin in the business.
Thus, such diverse individual objectives with a common goal necessitate
meticulous planning efforts individually and in totality. Therefore, it is
6 Project Planning and Management with CPM & PERT

erroneous to assume this role as the responsibility of any one party. Each
must develop a schedule for his required work which must be coordinated
and communicated with the other two parties because the work of each
affects the work of the other two parties.
Client while awarding the work has a clear vision for the project in
terms of the target date, cost and specific priorities. He may supervise the
work himself or appoint a project manager on his behalf to monitor overall
going of the project.
Consultant and contractor have to make their individual plans to
achieve the overall target set by the client. Consultant would plan for the
preparation of architectural and structural drawings in addition to BOQ for
tender documents. His planning shall be governed by the size, duration and
complexity of the project and accordingly, he will deploy the resources in
terms of experts, specialists and sub-consultants. It would be appropriate
and desirable if the planning of the consultant also involves the experts and
specialists who have to carry out the task of design for the project. Such an
approach necessitates effective coordination, communication and synergy
that is essential for overall going of the project. After all, the objective of
the design organisation must be to prepare the design schedule to meet the
client’s schedule for project delivery.

Fig. 1.3: 3 ‘C’ trio and communication for success of a project

The contractor responsible for construction activities must also develop

his schedule for meeting the overall time-lines duly considering the material,
manpower, money, equipment/machinery, T&P, a general trend of weather/
climatic conditions and market trend among other factors that may impact
project progress during its various stages of implementation. His scheme
Project Planning and Scheduling 7

must also include consideration for the work of sub-contractors, vendors

and suppliers involved in the project. This client - consultant - contractor (3
‘C’) trio interrelationship can be represented as per Fig. 1.3.
The objective of the construction strategy has to be to effectively
manage the work to produce the best quality project for the owner. In sum,
the task of this trio has to be carried out in the most cohesive, coordinated
and cooperative manner through an open communication system. Such an
approach shall not be characterized by repeated mistakes and failures but
rather, by success and accomplishment. Effectively, the task of a PM is to
identify and interrelate the tasks to ensure that the work is progressed in
a continuous manner and project is implemented successfully. It is in this
context that regardless of the project size, complexity or duration, planning
and scheduling must necessarily be done to ensure successful project
delivery.

1.7 Advantages of Project Planning and Scheduling

Planning is the first step to project scheduling. Technically, planning is a

process and not a discrete activity. Furthermore, construction projects are
initiated in a complex and dynamic environment resulting in circumstances
of high uncertainties and risk which are compounded by demanding time
constraints (Mulholand and Christian–1999). Therefore, changes are
unavoidable in any project, and that necessitates additional planning to
incorporate the changes into the existing schedule. There may be plenty
of situations or events that can arise and impact the project schedule.
Such situations may be the outcome of the change of project personnel,
changes in design, breakdown of equipment and machinery, problems with
permits, non-availability of material and man-power, natural calamity viz.
COVID-19, unprecedented floods or drought etc. However, planning if
done meticulously will detect such changes and adjust the schedule duly
incorporating them without a serious impact on the project completion plan.
Briefly, advantages of project planning and scheduling are described
below:
1.7.1 Complete the project on time: Time forms one of the vertices
of an iron triangle of the project; other two being cost and quality. In the
present competitive world, completing a project in time is considered as a
successful accomplishment as the client can put the asset so created to use
and start getting a return on his investment. Delayed completion results
8 Project Planning and Management with CPM & PERT

in cost escalation, legal disputes and arbitration in addition to poor market

reputation of the team associated with the project. Good planning effort
ensures smooth sailing by quick resolution of the dispute if any and that is
fundamental for timely completion of a project.

1.7.2 Flow of work is continuous: Resource requirements for a project

vary as per the schedule of the activities. Systematic planning guides the
working team in advance about the likely requirement of material inventory
and manpower resources. Such advance information helps the project
manager to take advance action to ensure the availability of the requisite
resources commensurate to actual ground requirements. With such efforts,
not only the work front shall be available to the labourers, but also material
procurement shall be optimum and economical. Evidently, with such
reliable and continuous flow of resources, idle charge shall be minimum
and that is a huge saving to the project.
1.7.3 Least doubts and more clarity: With sound planning and
scheduling of a project, all possible threats and weaknesses in the scheme
are identified and suitable remedial measures taken to tackle such risks.
Further, as each activity along with its time duration, cost and resource
requirement are clearly brought out at the planning stage, there is least
possibility of doubt, confusion or misunderstanding rather, there is more
clarity and transparency.
1.7.4 Minimum variation: A poorly planned and scheduled project
will face repeated hiccups during its journey in the form of re-work and
rectification leading to variation and deviation. This has huge financial
implication and quality concern for the project in addition to delayed
delivery. Proper planning shall bring such concerns to a minimum and
unavoidable level as every single aspect is dealt with logically, rationally and
analytically.
1.7.5 Increased knowledge and better control of the project: Good
planning and scheduling are fructified on the platform of detailed study and
scrutiny of the project. While carrying out such planning, the team involved
will touch almost every possible single issue concerning to the project
irrespective of its size, duration or complexity. In doing so, the team gets
detailed information by design and certain information by default. All such
information and knowledge work as a data- bank for the project manager
and his team which shall be in a better position to guide and control the
project.
Project Planning and Scheduling 9

1.7.6 Advance Information System: Systematically carried out

planning and scheduling covers almost every aspect pertaining to a project.
The team involved in it would make its SWOT (Strength, Weakness,
Opportunity, Threat) analysis and come out with the most appropriate
plan. With such fine planning and scheduling, entire picture of the project
including associated risks can be conceptualized in advance by a matured
and experienced project manager that helps him to take remedial action in
advance to keep it on track.
1.7.7 Responsibility and accountability are clearly defined: This
is one of the most important features of good planning wherein each
task along with its duration, cost involved and the person responsible
for implementation is adequately defined. Alternatively, there is a clear
understanding of who does what, when and how much. Efforts by the
personnel in the organisational hierarchy, shall, therefore be to deliver the
best to become part of the success and appreciation and not of failure and
criticism.
1.7.8 Correct and timely report to management: Sound planning
being the heart of good project management gives meaningful and timely
report as and when sought. Further, as tasks are defined in measurable and
manageable units, it becomes easy for the management and stakeholders to
know the correct distribution of the cost of the project during various stages
of its implementation.
1.7.9 Assured quality project: Planning and scheduling cater for the
appropriate balance of the three basic ingredients of a project i.e. time,
cost and quality. Timelines are so well planned and defined that there is no
abrupt race to catch them at the cost of quality. Adequate time is catered
for all requisite activities including the time required for various testing and
checking in addition to the time margin for certain unforeseen exigencies
during the course of project. With all such provisions so meticulously
planned, the entire project is absolutely integrated wherein quality aspect
cannot be pushed to a back seat at the cost of time and cost.
1.7.10 Enhanced confidence and higher morale of the team: The
team involved in the planning of a project, feel elated and excited when
result on the ground are achieved exactly as conceived at the planning
stage. The confidence level of the entire team achieves a new height. This
not only works as a morale booster to the team but also helps the members
to take up new challenges with greater vigour and vitality.
10 Project Planning and Management with CPM & PERT

1.7.11 Cohesive unit with enhanced loyalty and trust: This is the
natural outcome of the enhanced confidence and morale of the team
members achieved due to good planning efforts. The successful outcome
of a project due to team effort strengthens the bonding of members making
it a cohesive unit to take further challenges. Such close bonding is full
of trust, reliability and faith wherein each one knows the strength and
weakness of the others and together as a team they magnificently manage
the opportunities and threats on their way to realize the goal.
1.7.12 One runs the project instead of a project running him: Good
planning and scheduling provides a smooth platform for the successful
delivery of the project. Anything to everything pertaining to a project is
so nicely and precisely laid in the scheme of the things that for a project
manager it becomes easier to organise, coordinate, control and manage the
project during its various stages of implementation. Effectively, PM shall be
in complete command and control of the project right from the beginning
till its completion. Technically, PM will run the project and not the other
way round and that is the key to success.

1.8 P
lanning for Multiple Small Projects vs Single Large
Project

There may be instances wherein a project manager is assigned the task of

managing multiple small projects of short durations or a single large project
of longer time. The approach in both cases may be differently oriented due
to the very nature of the work elements involved.
A small project is usually staffed with a few people who perform their
tasks to complete the project. For such types of projects, there is a tendency
of the project manager to forgo any formal planning and scheduling because
each project has simple and well defined scope of work. The main problem of
the project manager is not of managing a single project at a time, but, rather
managing all the projects simultaneously which may be very frustrating and
taxing. The PM in such case must develop a plan and schedule that caters
for all the projects assigned to him, irrespective of their being interrelated
or otherwise. This is very essential because the staffing of small projects
requires assigning individuals to several projects at the same time to ensure
their full time workload. Evidently, an individual’s work on one project
affects the work on other projects. Therefore, to resolve this, the PM must
develop a plan and schedule that interfaces the work of each individual that
is working on multiple projects. Effectively, the plan should clearly show
Project Planning and Scheduling 11

how the work of each individual progresses from one project to another.
In the case of a large project, generally, a single project manager is assigned
the task of managing it. He is solely responsible for implementation for the
project. He is assisted by the staff personnel to give diverse technical expertise
that is required to accomplish the numerous tasks involved in going of the
project. The PM has the task of identifying and interfacing related tasks to
ensure successful delivery of the project. Much of the work of the PM involves
extensive communication with team members, client, contractor
and consultant to see that the work moves in a continuous and uninterrupted
manner.
Thus, the need of good planning and scheduling is as important for
managing multiple small projects as it is for managing a single large project.

Questions
1. Differentiate between planning and scheduling of a project. Which one
is more important?
2. Why planning and scheduling are necessary for managing a project?
3. Why planning is called as the heart of good project management?
Describe in 150 words.
4. A project manager is usually assigned the responsibility of either
managing a single large project or many small projects at a time.
Describe the different approaches to planning and scheduling that
must be used by these two types of project managers.
2
Planning and Scheduling
Techniques

2.1 Introduction

Planning and scheduling for successful delivery of the project must

necessarily be carried out irrespective of the size, complexity and duration
of the project without any bias for personal objectives or requirements.
Management of a project involves decision making for the planning,
organizing, coordinating, monitoring and control of a number of
interrelated and interconnected time bound activities. Thus, for successful
implementation of the project, project manager (PM) often depends on
the tools and techniques that are not only suitable for drawing up the
best possible initial plan but also capable of instantaneously projecting the
possible impact of deviations so as to initiate necessary and timely corrective
measures. The PM therefore, must choose the technique that is simple to
use and easy to interpret by all the project participants. Such search for an
effective tool has resulted in development a variety of techniques. There are
generally two broad categories commonly in use; i.e. Bar chart and Network
which are further subdivided as below:

Fig. 2.1: Project Management Techniques

Planning and Scheduling Techniques 13

2.2 Bar Charts

These are the pictorial representation of the various tasks required to be

performed for accomplishment of the project objectives. Initially, these
were the guiding tools for project management personnel. However, with
the passage of time, there has been gradual evolution of other techniques in
this field which are in practice, the world over.
2.2.1 Gantt chart: A project necessarily consists of multiple jobs to
be performed within a specified time and allocated budget. A pictorial
representation showing various jobs to be done and the time and budget
they involve would be of immense help to the project manager and the
inspecting team. Henry L Gantt (1861-1919) around 1917 developed one
such pictorial chart for scheduling and reporting progress of a project.
These charts were also known as bar charts which were latter known as
Gantt Charts. This is basically a graphical representation of work schedule
and time for a project. Effectively, it is a graphical time-scale of the work
schedule. It is very simple and easy to understand and interpret but difficult
to update.

Fig. 2.2: A typical Gantt chart

14 Project Planning and Management with CPM & PERT

It is a pictorial representation, specifying the start and finish time for

various tasks involved in a project on a horizontal time-scale. Each project
is broken down to physically identifiable, measurable and controllable units
called tasks which forms the basis for a bar chart. For the purpose of drawing
a bar chart, these tasks are indicated by means of a bar, preferably at equal
distance on the vertical axis whereas time is plotted on the horizontal
axis. Length of the bar indicates the time required for performing the task
whereas the width has no significance. In practice, time is superimposed on
a calendar for ease of learning and understanding. A typical Gantt chart is
shown as below;
2.2.2 Weaknesses in Bar Charts: Though the bar chart is compre-
hensive and convenient tool for planning and scheduling, it has its own
shortcomings which are brought out as below:

2.2.2.1 It lacks in showing interdependencies of activities

A project large or small is characterized by the multiplicity of activities.
Some of those activities can commence concurrently, some may have
certain degree of concurrency whereas others may be performed in strict
sequence depending upon the type of the project, its size, duration and
the complexity involved. Some of the activities do have certain degree
of interdependence and interrelationships. Bar chart, however, cannot
show clearly the interdependencies among various activities involved. For
example in a building project one may encounter following situation in a
bar chart:

Fig. 2.3: Interdependencies in a bar chart

Planning and Scheduling Techniques 15

In this bar chart, activities of internal electric supply and internal water
supply are concurrent whereas, plastering and flooring work are overlapping
other activities. In fact, internal water supply and internal electric supply
are independent activities and not related with each other. However, flooring
and plastering work are interconnected with internal electric supply and
internal water supply works as these later two activities must be completed
before the former two activities commence. Bar chart however, cannot
clearly show the interdependencies among these activities. The mere fact
that two or more activities are to commence simultaneously or with certain
overlapping times doesn’t necessarily mean that those are interrelated or
interconnected. In other words, such state of activities doesn’t mean that
those activities are related, interdependent or completely independent.
This is a serious lacuna of the bar chart. Similarly, bars running parallelly
need not stand for independent activities as is reflected from the following
activities and as shown in the bar chart (Fig. 2.4) where time period for
various activities is as shown against each activity.

Excavation in foundation 25 days

Pouring of PCC in foundation 07 days
Putting reinforcement in foundation 15 days
Pouring concrete mix in foundation 10 days

In this case, if all the activities are performed sequentially, total time
required for accomplishing the entire tasks shall be 57 days (i.e. 25 + 7 +
15 + 10) as reflected in the bar chart below:

Fig. 2.4: Bar chart showing activities in sequence

16 Project Planning and Management with CPM & PERT

It may however, be seen that there is no requirement of carrying out

these activities sequentially as these tasks can be performed by giving
certain overlapping periods to them, thereby, reducing overall completion
for accomplishing all the tasks. These overlapping may be planned as below:

¾¾ After completion of part excavation in foundation, PCC in

foundation can be started
¾¾ When part PCC has been completed, reinforcement laying in the
foundation can be started
¾¾ Concreting in the foundation can commence when part PCC and
part laying of reinforcement bars has been completed.

This signifies overlapping of the activities for completion of the overall

project successfully in totality, without compromising on the quality aspect
of the project. Accordingly, these activities can be arranged as overlapping
with each other as brought out below in the bar chart (Fig. 2.5):

Fig. 2.5: Bar chart showing overlapping of activities

In this situation following possibilities have been assumed:

¾¾ PCC in foundation has commence after 21 days of excavation in

foundation
¾¾ Reinforcement laying in foundation has commenced after 05 days
of commencement of PCC
¾¾ Concreting in foundation has commenced after 10 days of laying of
reinforcement in the foundation.
Planning and Scheduling Techniques 17

With such planning, total time for completion of the entire tasks has
come down to 46 days as against earlier time period of 57 days. However,
if due to certain unexpected contingencies, the activity of excavation in
foundation has been delayed by certain days say 02 or 03 days, how this
will affect its subsequent activities i.e. PCC in foundation, reinforcement or
concreting etc. is not reflected by the bar chart.
2.2.2.2 It does not reflect project progress: In planning and execution
of a project, the primary focus of the project manager and stake holders
has to be on the progress attained on any particular day. Further, since a
project has to be in a state of dynamic equilibrium during its entire phases,
it is imperative to have a system which easily reflects the project progress,
but bar chart lacks this feature. Changes in a project are necessary which
necessitate frequent updating of the entire scheme, but that cannot be
revealed in a bar chart. To cater for such requirements, conventional bar
charts are modified by putting certain shaded portions or by partial filling
through inclined lines to show the status of progress on a particular date as
shown in Fig. 2.6 below:

Fig. 2.6: Gantt chart showing progress on a particular day

In this figure, status of progress after 30 days has been reflected

through shaded portion which can be interpreted as below:
18 Project Planning and Management with CPM & PERT

Table 2.1

S/N Activity Target progress Progress as

as planned on achieved on day
day 30 30
(i) Excavation in foundation 100 % 100 %
(ii) PCC in foundation 100 % 090 % (appx)
(iii) Reinforcement in foundation 20 % 012 % (appx)

2.2.2.3 It does not integrate cost or resources with schedule: There

is always necessity to integrate cost or the resources involved in the project
for its better appreciation, understanding and monitoring. A bar chart simply
reflects various tasks involved in a project on ‘Y’ axis and time on the ‘X’
axis and therefore, it has no other dimension wherein the cost or resources
involved in it could be reflected. Thus, it cannot give the complete picture
of the project in terms of this aspect.
2.2.2.4 It does not reflect the uncertainties involved: A project is
conglomerate of diverse fields and specialties loosely lumped together
as a sector of the economy. Therefore, there is always uncertainty and
unpredictability involved in it. Further, due to multiplicity of actors and
factors, their interactions, interdependencies and interrelationships the
project is always in a state of dynamism necessitating equilibrium during
its various phases of implementation. The mere fact that despite so much
R&D efforts, huge pool of professionals, experts and management gurus,
time and cost overrun of the projects still remains unanswered the world
over speaks volume about the uncertainties involved in a project. In fact,
the modern day projects in any sector whether construction, defense or
any other welfare programmes are characterized by extensive research,
experimentation and hits and trial where traditional know-how or the
practices prove to be of least significance for success of the project. Such
uncertainties make it really a challenging task to predict with confidence
about the outcome of a project. As a result, there is always a possibility
involved for rescheduling the time-lines of various activities and events of
the project. Essentially, it requires a dynamic equilibrium throughout the
project period right from inception to completion. In a bar chart, there is
no provision through which such uncertainties involved in a project can be
reflected or addressed and therefore, it is a serious disadvantage associated
with it.
Planning and Scheduling Techniques 19

2.2.2.5 It requires significant time for updating: This aspect is an

extension of the uncertainties as brought out above. It reinforces the fact
that for updating of a bar chart, it requires significant time due to the
involvement of multiple actors, factors and their associated but unavoidable
interactions, interdependencies and interrelationships which evidently put
an obstruction in the efficient implementation of a project. The person
involved in updating has to be competent and cautious, vigilant and careful
since he has to incorporate such aspects in the overall going of the project.
Extra time is necessitated since such updating would require assessment,
analysis, discussion, deliberations and finally taking a decision on which
shall depend the complete fate of the project.
Technically, this is a good technique to show overall scheduling of the
work but has limited applications for detailed construction work, which is
typically characterized by multiple activities and their interdependencies.
The technique is best suited for engineering design work as it doesn’t
require extensive interrelationships of the activities.
In a nutshell, a bar chart can be summarized to have following
characteristics and limitations:

¾¾ Easy to interpret but difficult to update.

¾¾ Doesn’t show interdependence of activities.
¾¾ Doesn’t integrate cost or resources with schedule.
¾¾ Good for overall project delivery.
¾¾ Limited applications for detailed construction work due to multiple
interrelationships of the activities involved in the construction
work.
¾¾ Good for scheduling engineering design work as it doesn’t require
extensive interrelationships of the activities.
¾¾ It requires significant time for updating since the interrelationships
of activities are not defined.

2.2.3 Milestone Chart: The inherent weaknesses of bar chart necessitated

improvement in it to meet the growing requirement of the industry. There
were many queries which couldn’t be answered by bar chart which gradually
led to certain additions and modification in it through some additional
elements. One such modification has been discussed under Para 2.2.2.2.
Fig. 2.6 above wherein progress of various tasks on a particular day has been
reflected by the shaded portion of the tasks, thus making a bar chart more
20 Project Planning and Management with CPM & PERT

explicable and understandable. Another effort in this direction is ‘Milestone

chart’ which is an improvement over bar chart (Gantt chart).
Milestones are in fact important, major, significant or key events in
the going of a project that are identified or marked when completed as
the project progresses through its various phases. To draw a milestone
chart, a long term job is broken down into small identifiable measurable
and manageable sub parts and completion of those small pieces of the job
shall be assigned a number i.e. milestone. Effectively, this is like a work
breakdown study of the tasks wherein completion of each sub-task is given
a number that is defined as milestone number. Such breakdown study
essentially increases the understanding of the interdependencies and
interrelationships among the tasks and sub-tasks that brings substantial
improvement to the Gantt chart. In a nutshell, in a milestone chart, a task
is broken into specific phases (activities) and after accomplishment of each
of the specific activity a milestone is reached or in other words an event
occurs which is called milestone. It also shows the sequential relationship
among the milestones i.e. events within the same task but not among the
milestones of different tasks.
For example, tasks of Fig. 2.6 can be made into sub-tasks as below:
Task 1:
Excavation in → marking of layout + excavation
foundation completed completed
(1) (2)
Task 2:
PCC in foundation → erection of side + PCC laying
boards completed completed
(3) (4)
Task 3:
Concreting in → rebar laying + side board erection
foundation completed completed
(5) (6)
+ concreting
completed
(7)

Numbers (1) to (7) against each sub task show their completion which
represent key events or significant points in the going of the project under
study. These important events are defined as milestones and are shown as
below:
Planning and Scheduling Techniques 21

Fig: 2.7: Milestone chart

In this chart, Task-1 has two milestones. However, milestone-2 cannot

be attained until milestone-1 has been achieved and the activity between
milestone-1 and 2 has been completed. Thus, interrelationship among
the milestones of the same tasks is clearly defined. Similarly, for Task-2,
milestone-4 can be attained only after milestone-3 has been achieved and
the activities between milestone-3 and 4 have been completed. In this
entire exercise, interrelationship or interdependence among the milestones
of Task-1 and Task-2 cannot be defined and that is one of the weak points of
milestone chart. Other weaknesses of milestone chart are as follows:

¾¾ It doesn’t show interdependence between tasks.

¾¾ It does not indicate critical activities in a project.
¾¾ Uncertainty involved in accomplishing a task cannot be reflected.
¾¾ For large and complex projects drawing a milestone chart is
extremely cumbersome and difficult.

From above discussion it is revealed that in a milestone chart, the events

are in a chronological order but they are not in a logical sequence and thus,
a systematic analysis of the project cannot be done. Therefore, there was a
necessity to have an improved system wherein shortcomings of milestone
chart would be overcome. This led to evolution of network system where
events are connected by arrows showing their logical sequence. Milestones
of Fig. 2.7 above can be arranged as a network as below:
22 Project Planning and Management with CPM & PERT

Fig: 2.8: Milestones and their interdependencies in a Network

2.3 W
ork Breakdown Structure (WBS) for Bar Chart and
Network Analysis

In the study of Bar chart, Gantt chart, Milestone chart or Network as

discussed above, there is repeated discussion on tasks, sub tasks, events
and completion; all related to a project. Identification of the tasks and sub
tasks is an essential feature to study and manage a project whether large or
small. It is in this context that Work Breakdown Structure (WBS) study is
necessary for planning, organizing, coordinating, monitoring and controlling
a project. Essentially, this is top-down or whole to part study wherein the
entire project is broken down into easily manageable and measurable parts.
The concept of WBS is simple; in order to manage a whole project, one
must manage and control each of its parts. The WBS is the cornerstone of
the project work plan. It defines the work to be performed, identifies the
needed expertise, assists in selection of the project team and establishes a
base for project scheduling and control. A WBS is a graphical display of a
project that shows the division of work in a multi-level system.
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”. The WBS
visually defines the scope into manageable chunks that a project team can
understand, as each level of the work breakdown structure provides further
definition and detail. In simple terms WBS can be defined as the process
Planning and Scheduling Techniques 23

dividing complex projects into simpler and manageable tasks. In WBS,

much larger tasks are broken down to manageable chunks of work, which
can be easily supervised and estimated. WBS is not restricted to a specific
field when it comes to application. This methodology can be used for any
type of project management.
The development of WBS is a continuing process that starts when
the project is first assigned to project manager and continues until all
work packages have been defined. It is used from the start to finish of the
project for planning, monitoring and control. It is an effective means of
defining the whole project by parts (whole to part) and providing effective
communication channels for exchange of information that is necessary for
managing the project. Following are some of the reasons for creating a WBS
in a project:

¾¾ Accurate and readable project organisation for better appreciation.

¾¾ Accurate assignment of responsibilities to the project team and
members.
¾¾ Indicates the project milestones and control points for successful
delivery.
¾¾ Helps to estimate the cost, time and risk for efficient implementation.
¾¾ Defines the project scope for a better understanding by the
stakeholders.

Essentially, WBS is top-down or whole to part approach. One can use

different forms to display WBS. Some use tree structure to illustrate it
whereas, others use lists and tables. A typical top-down approach to display
WBS as below:
This is essentially required since the project in itself is a conglomerate
of multiple actors, factors, activities and events which cannot be analyzed
and interpreted in totality in a single go. No doubt, with experience and
maturity, a PM may have a complete picture of those multiple elements
involved in the going of a project, yet it is not only the PM but the entire team
that runs the show. WBS therefore, not only is the technical requirement to
identify various sub-parts of the project, but also, an administrative necessity
as it helps in identifying the type of specialties, manpower requirement and
fixing accountability/responsibility of the personnel in project’s journey
through its various phases of implementation.
The development of WBS is an important first step that is often
neglected. Attempting to draw CPM diagram without preparing a WBS
usually leads to numerous revision to the diagram subsequently.
24 Project Planning and Management with CPM & PERT

Fig. 2.8: A typical WBS

2.3.1 Design Principles for WBS

(a) 100% Rule
n important design principle for work breakdown structures is called
A
the 100% rule, which is defined as below:
BS includes 100% of the work defined by the project scope and
W
captures all deliverables; internal, external and interim—in terms of
the work to be completed, including project management. WBS should
not include any work that falls outside the actual scope of the project,
that is, it cannot include more than 100% of the work.
here is no fixed rule defining as how to breakdown a task in WBS. It is
T
a matter of the project type and the management style followed for the
project. However, following are general guidelines for WBS:
Planning and Scheduling Techniques 25

(i) Two weeks’ Rule

nder this rule, nothing is broken down smaller than two weeks worth
U
of work. This represents that smallest work unit shall have period of
completion not less than two weeks.

(ii) 8/80 Rule

his rule implies that no task should be smaller than 8 hours of work
T
and also not larger than 80 hours of work.
I n summary form, WBS helps in breaking down the complex task into
manageable and measurable tasks for efficient implementation of the
project. The tasks so identified work as input for Gantt charts and
Network analysis.

2.4 Network System

Network is the natural extension of the milestone chart wherein the events
are connected by arrows in a logical sequence. In a network schedule, it
requires project team to break a project down into identifiable tasks and
to relate the tasks to each other in a logical sequence much greater than a
bar chart. The up-front planning and scheduling helps the project team to
identify conflicts in resources before they actually occur. It is up to the project
manager to use his own judgment and select the method of scheduling that
best defines the work to be performed and that effectively communicates
project requirements to all participants. There are two basic elements in
a network plan; activity and event. Activity is the time consuming element
and represents a job. The event is akin to milestone and also called as node
is the beginning or the end of a job. In network system, activities are denoted
by arrows whereas events are denoted by circles or rectangles. Technically,
when all the activities and events in a project are connected logically and
sequentially they form a pictorial diagram which is called network. This
network is the basic document in a network based management system.
Before moving further, a look at event and activity will be of much use
in understanding network analysis system.
2.4.1 Activity: This is defined as the performance of a task required to
complete the project. It is clearly defined element of a project or work
and forms an integral part of the project. It consumes time and resources
and always lies between two events. Conventionally, an activity is any
function that takes place between events whether work is involved or not
26 Project Planning and Management with CPM & PERT

e.g. setting or hardening of cement, awaiting approval of loan etc. Such

periods represent idle time and do not consume any resource except the
time element, yet these are activities. In a network diagram one activity
is spotted once only. Examples of activities are; excavation in foundation,
concreting in foundation, casting of plinth beams, progressing brick work in
super structure, casting of RCC slab, laying of electrical cable etc.
2.4.2 Event: An event is defined as an occurrence at a point in time
marking the commencement or completion of one or more activities. Since,
it is an instance in time, no time element is assigned to it. Technically, it
is a noteworthy achievement in the project and doesn’t consume time or
resource. In a network diagram, the events also appear in a logical sequence
similar to activities. A definite pattern is followed to assign numbers to the
events. Head events are marked with higher numbers whereas the tail
events are marked with lower numbers. For ease, following questions when
answered give the sequence of events in a network.

¾¾ What event must be completed before a particular event?

¾¾ What event(s) can follow a particular event?
¾¾ Which activities can commence or complete from/at the event?

n event is considered to have occurred when all the activities leading

A
to it are completed. Thus, an event is:

¾¾ The start or completion of a task

¾¾ A significant point or a milestone in a project
¾¾ Consumes no time or resources in itself

Symbol for an event may be a circle, square or a box. Examples of

events are: completion of excavation in foundation, commencement of
concreting work in roof slab, completion of auditing of documents etc.
2.4.3 Dummy activity: This is the activity which neither consumes time,
nor resources. This is essentially required in a network diagram to keep
the correct logic and sequence and also to keep designation of each activity
unique or different from the others for the purpose of recognition. This is
also known as zero time activity. In a network diagram dummy activity is
represented by dotted line.
2.4.4 Network: It is a diagram to represent the relationship of activities
to complete the project. The network may be drawn as either an “arrow
diagram” or a “precedence diagram”.
Planning and Scheduling Techniques 27

2.4.5 Duration (D): This represents the estimated time required to

perform an activity. The time should include all resources that are assigned
to the activity.
2.4.6 Critical Path: It is the path along which maximum time is consumed
for completion of the project. Float along the critical path shall be zero or
the least. Therefore, delay in any activity along the critical path will delay
the entire project. There may be more than one critical path in a network
diagram depending upon the nature of work involved and schedule of
sequencing decided by the PM.

2.5 Network Analysis System (NAS)

Technically, a network analysis system (NAS) provides a comprehensive

method for project planning, scheduling and controlling. NAS is a
graphical representation of activities and their interdependencies. It is
a representation in pictorial form defining and coordinating work as per
relevant sequencing of activities. Its sub-components may be activities and
events which are interlinked with one another as per the work schedule
planned for their performance to achieve the project objectives. Whenever
discussion on NAS comes, words like break down structure, interlinking,
sequencing, coordination, interdependence, interrelationships, control,
activities, events etc. are frequently encountered. Once the network is
prepared words like float, slack, critical path are frequently used. Broadly,
CPM and PERT network are in practice among the professionals. Looking
at the gradual evolution of practices for project monitoring and controlling,
there had been systematic progress as per following sequence:
Bar chart → Milestone chart → Work Breakdown Structure → Network
system (CPM & PERT)
2.5.1 Critical Path Method (CPM) Network: This technique was
developed by Du Pont company in 1956 with Ramington company Rand
as consultant. This is essentially a deterministic approach for project
scheduling and most commonly finds its application in engineering and
construction industry. This method provides interrelationships of activities
and scheduling of cost and resources. It is also an effective technique for
overall project scheduling and detailed scheduling of construction activities
clearly defining the interdependencies and interrelationships among the
activities along with their sequencing. However, it has a limitation when
applied to detailed engineering design work during the early stages of a
28 Project Planning and Management with CPM & PERT

project because it requires an extensive description of the interrelationships

of activities. No doubt, CPM technique requires more efforts for preparation
than a bar chart, but it provides more detailed information that is required
for effective project management.
The most difficult task in the use of CPM and development of the CPM
network diagram is identifying and interfacing the numerous activities that
are required to complete a project.
2.5.2 Program Evaluation and Review Technique (PERT): This
technique was developed in 1957 by the US Navy with Booz, Allen &
Hamilton Management Consultants. This is a probabilistic approach to
scheduling. It is more commonly used by the manufacturing industry;
however, it can be used for risk assessment of highly uncertain projects.
PERT technique is a method of minimizing trouble spots, programme
bottlenecks, delays and interruptions by determining critical activities
before their occurrence so as to coordinate various activities in the project
successfully. PERT is event based network system where an event is defined
as an instantaneous point in time signifying completion or beginning of an
activity. Thus, in PERT system, focus is on the start and completion of the
events and not on the activities, and therefore the activities that take place
between the events are not specified.
These events shall be put in a logical and sequential pattern to develop
PERT network. One such pictorial form of PERT network is shown in
Fig. 2.10.

Fig. 2.10: PERT network

Both these techniques i.e. CPM and PERT are often referred to as
network analysis system. With time, the difference between CPM and PERT
net work system is fading away and with minor modification both CPM and
PERT networks have led to development of some other programmes.
Planning and Scheduling Techniques 29

A typical network diagram showing activities and events is shown in

Fig. 2.11.

Fig. 2.11

Questions
1. Broadly describe the techniques used for planning and scheduling of a
project.
2. What is a work breakdown structure in Construction Project
Management? Define and explain in brief. Further, how Work
Breakdown Structure is classified into different levels for making the
job convenient? Explain with an example. (ESE-2018 : 12 marks)
3. What is bar chart? Explain how it can be used to monitor progress of a
project. What are the limitations of a bar chart? (CS—2002 : 12 marks)
4. What do you mean by scheduling of a civil engineering project? What are
the advantages of scheduling? Discuss the classification of scheduling.
(CS—2015 : 15 marks)
5. What is Gantt chart? What are its weaknesses?
6. How milestone chart is an improvement over Gantt chart? How can
project progress be reflected on a Gantt chart?
7. Bring out the evolution of various project management techniques.
Which one is the best technique?
8. Differentiate between activity and event in reference to CPM and
PERT.

Problems
1. Prepare Gantt charts for the following projects for which various
activities and their durations are shown below:
30 Project Planning and Management with CPM & PERT

(i) Constructing a house (single storeyed)

Digging foundation 10 days
Laying lean concrete in foundation 02 days
RCC work in foundation up to plinth level 30 days
RCC work up to and including roof level 60 days
Brick work up to roof 70 days
Internal services and flooring work 60 days
Plastering and painting 45 days
Testing and handing over 15 days

(ii) Stitching of a suite by tailor (concurrent jobs)

Purchasing cloth and taking measurement 02 days
Cutting the cloth as per measurement 02 days
Stitching the suite 10 days
Trial of the suite 02 days
Handing over the suite 01 day

(iii) Construction of a Basket ball court

Levelling of the ground 02 days
Digging for base 03 days
Lean concrete in base 01 day
Concreting for the court 05 days
Fixing of poles, boards and baskets 07 days
Painting of the court 03 days
Handing over 01 day

2. From Fig. 2.11 list out the following:

(i) Which are concurrent activities?
(ii) Which are preceding activities to activity ‘g’?
(iii) Which are succeeding activities to activity ‘b’?
(iv) Which all activities should be completed, before start of activity ‘g’?
3. Prepare a network diagram for Problem 1(i) above.
4. Prepare a bar chart for constructing a boundary wall 1 km in length
constructed in RCC frame and brick work. Period of completion of the
work is six months.
3
Critical Path Method

3.1 Introduction

In Chapter-2, we have discussed briefly about CPM network. This is the

technique wherein, the emphasis is laid on the activity part of a network.
Truly, any network diagram dealing with project management essentially
deals with activities and events both. However, it is the ingenuity of the
project manager to decide as to which system shall be followed i.e. whether
activity based or event based system. Event base network system is known
as PERT as briefly discussed in Chapter-2 and shall be discussed in details
in the subsequent chapters.
Technically, CPM is a mathematically ordered system of planning,
scheduling and controlling for project management which makes possible a
balanced and optimum time-cost schedule at one end and assures timelines
and minimum use of resources at the other.
Historically, CPM technique was first used by E.I. du Pont de Nemours
& Co in 1957 to improve the planning, scheduling and co-ordination of
its new plant’s construction efforts. Reportedly, the technique saved the
company $1 million in the first year of its implementation. The method was
so useful that it spread to large construction companies, development of
technologies, plant maintenance, industrial projects, building construction
and research projects. During those periods, companies were concerned
with the increasing cost and time required to bring new products from
research to production i.e. technological breakthrough. This technique
is often used in large manufacturing and construction projects but they
are also applied to tasks like new product development cycles, marketing
campaigns, software process modelling and research programs. This
technique proved to be very handy and helpful to the companies dealing
with aforesaid fields.
32 Project Planning and Management with CPM & PERT

CPM technique focuses attention on the activities required for

completion of a project. Activities are in fact the processes required,
actions to be taken, measures to be followed or works to be performed for
attainment of the requisite project targets. There are numerous activities
involved in a project which need to be performed for its completion.
Those activities need to be identified for successful planning, organizing,
coordinating, monitoring, controlling and finally implementing the project.
It is not that all the activities shall be performed at the same time, rather a
judicious approach is necessitated to ensure their proper sequencing. Role
of a project manager becomes important at this juncture as meticulous
planning efforts in terms of activities’ identification, their sequencing,
interdependencies and interrelationships will write the story for success of
the project. Developing WBS is an important first step for preparing a CPM
network of a project. Attempting to draw a CPM diagram without a WBS,
usually leads to numerous revisions to the diagram.
In this technique, the primary concentration is on the activities or jobs
to be performed, therefore, the entire procedure revolves around them.
Activities involve time and resources and thus form the most important
feature of CPM network.
Some of the examples of activities are:

¾¾ Digging of the foundation

¾¾ Laying of lean concrete in foundation
¾¾ Putting formwork/shuttering for beams or columns
¾¾ Taking car to garage for washing
¾¾ Assembling different parts of a machine

CPM method is based on network principle. In such network, events

are shown by circles and activities are designated by arrows leading from
one event to its successor events. Activity represents the time and resources
required for it to progress from one event to the other. An event represents
specific programme accomplished at a point in time.

3.2 Basic Characteristics of CPM Network

There are various network modules for project management viz. CPM,
PERT, PEP (Program Evaluation Procedure), LCES (Least Cost Estimating
and Scheduling), and SCANS (Scheduling and Control by Automated
Network System). Each of them has its own characteristics which are
Critical Path Method 33

accordingly analyzed to get the final outcome. CPM network has following
distinct characteristics:

(a) It is built on the basis of jobs or activities and not the events.
(b) It is a deterministic model and doesn’t take into account the
uncertainties involved in the estimation of time for the execution of
a job or an activity.
(c) In this system, times are related to costs. In another terms,
time is related to resources for accomplishment of the job or
activity.

The primary focus under CPM is on the activities. The CPM–user is

assumed to be on lesser uncertain footings and expected to have some prior
knowledge and experience of the activities comprising the project. Time
estimates from different activities as made by him are not random but
expectedly based on certain logics and past experience. Those are assumed
to be quite specific and made with a fair degree of confidence, maturity
and judgment. On the similar lines, cost (resources) associated with the
activities is also based on fair degree of definiteness emanating from the
prior experience, knowledge, judgment, and confidence level of the person
drawing the network.

3.3 How to Draw a CPM Network?

There are two basic methods of drawing CPM diagrams:

(a) The arrow diagram also known as activity on arrow (AOA)

(b) The precedence diagram also called as activity on node (AON)

Both these methods have their own merits and demerits, but they
achieve the same results as described below:

3.3.1 The Arrow Diagram (AOA):

In this technique, activities are represented by arrows that connect the
events through its tail and head. Tail represents beginning of the activity,
whereas head represents its end i.e. finishing. To achieve proper sequencing
of activities, dummy activities are also used in the network diagram.
Generally, this technique is widely used in Indian construction industry as
there is a minimum or nil confusion in its preparation. Therefore, AOA has
been discussed in detail in this chapter.
34 Project Planning and Management with CPM & PERT

3.3.2 The Precedence Diagram (AON)

In this technique, activities are represented by nodes. Some project
managers opt for this technique, as it does not require use of dummy
activities. This method can also provide the start-to-start, finish-to-finish,
start-to-finish and finish-to-start relationships of the activities which
significantly reduce the number of activities in a network diagram. However,
it has a serious drawback, because of potential confusion in the network
scheduling.
In any network diagram, there are multiple activities for accomplishing
the given project. It is not that all the activities will commence from one point
or finish at another point, rather, there is a logical sequencing necessitated
due to interdependencies and interrelationships of the activities in the
network diagram. Evidently, such sequence of activities shall be governed
by the knowledge, skill, maturity and experience of the person preparing
the CPM network, but it is for sure that following questions need to be
answered while preparing an activity network:

(i) Is this the start activity?

(ii) Is this the finish activity?
(iii) Which activity or activities must be completed before a particular
activity can commence?
(iv) What activity or activities follow this activity?
(v) What activity or activities can be performed simultaneously or
concurrently with this activity?

o get answer to these queries, it is essential to know the basic steps

T
involved in construction of CPM network. These are as follows:

¾¾ Break the entire project into smaller systems, known as tasks.

¾¾ For each task, determine the activities and events required to be
performed.
¾¾ For each activity, determine the preceding, succeeding and
concurrent activities.
¾¾ For each activity, determine the time and other resources required.
¾¾ Draw a network diagram, showing activities by arrows and events
by circles.
Critical Path Method 35

While constructing the CPM network, following guidelines are followed:

¾¾ An event cannot occur until all the activities leading to it are

completed and similarly, an activity cannot commence until its
preceding event has occurred.
¾¾ An event cannot be repeated i.e. once having occurred an event
cannot occur again, which signifies that there cannot be a network
looping back to the previously accomplished event.
¾¾ Time flow is from left towards right. Initial event is assigned zero
time which increases to other event as one proceeds from left to
right in the network diagram.

CPM network is activity based. Therefore, to draw a network diagram

under CPM, it requires the knowledge of specifying which activities must
be completed before other activities can be started, which can be performed
in parallel and which activities succeed other activities. The activities are
represented by arrows and are logically interconnected as per the pre-
decided sequence of operation. The tail i.e. beginning and the head i.e.
end of the arrow is attached to nodes that symbolize the events that are
numbered in some logical sequence.
Certain terminology as below needs to be understood before moving
further to understand CPM network.
Predecessor activity: The activity or activities that come immediately
before another activity without any intervening activities is called
predecessor to that activity.
Successor activity: The activity or activities that fall immediately after
an activity without any intervening activities is called successor to that
activity.
Concurrent activities: The activities those start simultaneously from
one node are called concurrent activities.
Dummy activity: This is the activity consuming neither time nor
resources, but represents the logical relation among the activities.
Various examples of above terminologies used in CPM network are
shown as in Fig. 3.1 below:
36 Project Planning and Management with CPM & PERT

S/N Diagram Logic

Activity ‘A’ precedes activity ‘B’
A B
1 Activity ‘B’ can start once ‘A’ is completed.
Activity ‘B’ is successor activity to ‘A’
Activity ‘E’ cannot start until both the
C
E activities ‘C’ and ‘D’ are completed.
2 D Activity ‘E’ is successor activity to both ‘C’
and ‘D’
Activities ‘G’ and ‘H’ are concurrent.
F
G None of them can start until activity ‘F’ is
3 H completed.

None of the activities ‘K’ and ‘L’ can

I K start until both the activities ‘I’ and ‘J’
4 J L are completed. But ‘K’ and ‘L’ can start
independently.

Activity ‘P’ cannot start until both ‘M’ and

M N
‘O’ are complete. Activity ‘N’ can start
Q after completion of ‘M’. Activity ‘Q’ shown
5
in dotted line arrow is a dummy activity.
O P
It does not consume any resources, but
specifies the interrelationship.

Fig. 3.1: CPM network examples

3.4 General Rules for Drawing Networks

In general, most of the rules for drawing network diagram are based on
common sense. However, certain important considerations for drawing
networks are described below:

(i) Movement in a network shall be from left towards right. First

event shall be on the left most side whereas, the last event shall
be on the right most side of the network.
(ii) As far as possible, activity arrows should not cross one another.
Fig. 3.2(a) is incorrect and should be corrected as Fi.g 3.2(b).
(iii) Arrows of the activities must be straight and not curved.
Fig. 3.2(c) should be corrected as Fig. 3.2(d)
(iv) There should not be looping in the network as shown in
Fig. 3.2(e).
(v) Angles enclosed at the event(s) should not be too small.
Critical Path Method 37

e 3 f
b 3 4 5
b e
g
1 c g 1
a f 4
a d
d c
2 5
2

(a) (b)

3 a d
b 1 2 5
e
a d 5 c
1 2 b f
c f
e
4 3 4

( c) (e)

c
3 4
b d
a
1 2 Loop 5
f e

(e)

Fig. 3.2

3.5 Understanding a CPM Network

To understand a CPM network, let us consider a randomly taken network
diagram as shown in Fig. 3.3 below:

E
3 6
F H
B G
A C J L
1 2 5 7 8

D K

Fig. 3.3
38 Project Planning and Management with CPM & PERT

In this network, activities are represented by arrows and events by

circles. From this network, following points are drawn:

¾¾ Activities B, C & D cannot take place until activity A is completed.

¾¾ Activities B, C & D can be started simultaneously.
¾¾ Activity A is a predecessor activity to activities B, C & D.
¾¾ Activity J is successor activity to activities F & C.
¾¾ Activity H cannot start until completion of activities E, F, & C.
¾¾ Activity G is a dummy activity.
¾¾ Activities J, H & K are predecessor to activity L.
¾¾ Events in the network have been shown from 1 to 8.
¾¾ Activities and events are moving from left to right in a pre-decided
sequential manner.

Example 3.1: We may take a simple example of plastering a building,

where following activities are necessary for accomplishing the given target:
Activity name Activity description
A Preparing form work
B Progressing internal plaster work
C Progressing external plaster work 1st coat
D Progressing external plaster work 2nd coat
E Removing form work

CPM network as below is drawn:

3
Dummy
C activity
A B D E
1 2 4 5 6

Fig. 3.4: CPM network for plastering

In this example, activities of internal plaster and 1st coat of external

plaster can be started concurrently to save time. However, time duration for
internal plaster may be more than that for external plaster’s 1st coat. Activity
D i.e. 2nd coat of plaster shall start after completion of the internal plaster
and 1st coat of external plaster. Therefore, such a condition in the network
is put by the dummy activity between events 3 and 4.
Critical Path Method 39

Example 3.2: An example of a proposed boundary wall is taken for

which sketch and activities are as below:
Top beam
RCC
Column
Brick Brick
wall wall

GL Plinth beam

PCC
RCC
Foundation

Fig. 3.5: Boundary wall

Activity name Activity description

A Excavation/digging in foundation
B Lean concrete & RCC in foundation up to and including plinth
beam
C RCC up to full height of columns including top beam
D Brick work below and above the plinth beam
E Plastering/Pointing work
F Painting work
G Site clearance

4 6 Dummy
C E activity

A B D F G
1 2 3 5 7 8

Fig. 3.6: CPM network for a Boundary wall

In this example, dummy activity between events 6 and 7 is necessary,

as site clearance cannot commence without completion of the plastering
work and painting work.
40 Project Planning and Management with CPM & PERT

3.6 N
umbering of Events in a Network Diagram by
Fulkerson’s Method

A network whether CPM or PERT comprises of activities and events. To

have their distinct identities, activities are assigned some names viz. A, B,
C ….or a, b, c….whereas, events are assigned some numbers viz. 1, 2, 3 …
or 10, 20, 30……etc. While assigning numbers to the events, it is necessary
that they reflect in some way their logical sequence of occurrence in the
network diagram. Dr D R Fulkerson has given following procedure for
numbering the events:
Step 1: I dentify an initial event i.e. from which arrows are coming out,
but none of the arrows entering to it. Evidently, in a network,
such event shall be one only. This event is assigned number 1.
Step 2: Delete all the arrows emerging from event-1 and move towards
subsequent events. This will create at least one initial event as
per step 1.
Step 3: N
umber these initial events as event-2, event-3…and so on.
Step 4: Delete all emerging arrows from these new initial events that
will create new initial events.
Step 5: Repeat step-3 above
Step 6: The process shall be repeated till last event is numbered in the
process.
To understand Fulkerson’s method following CPM network may be
referred:

e
C F
f h
b
a c g n
A B E J L
d o
j l
D G K

k m

Fig. 3.7(a)
Critical Path Method 41

(i) In this network, there is no arrow entering at event ‘A’ and

also it has only emerging arrows from it. Therefore, it will be
numbered 1.
(ii) From ‘A’ i.e. event-1, there is only one arrow emerging. Deleting
this arrow yields event ‘B’ which has no entering arrow but has
only emerging arrows. This event shall be numbered 2.
(iii) From ‘B’ i.e. event-2, there are three emerging arrows b, c and
d. Deletion of these arrows gives us events C, D & E. Events C
& D have no entering arrows but have only emerging arrows,
thus, these both are initial events at this point. Event E however,
has one entering arrow and thus it cannot be an initial event.
Therefore, event C shall be numbered 3 and event D as 4.
(iv) From ‘C’ i.e. event-3 there are two emerging arrows e and f,
and from ‘D’ i.e. event-4 also there are two emerging arrows j
and k. By deleting these arrows, we get events E, F, G & H as new
initial events. These events E, F, G & H shall be numbered as 5,
6, 7 & 8 respectively.
(v) From ‘F’, ‘E’, ‘G’ and ‘H’, one arrow each emerges from each
node i.e. h, g, l, & m. Deletion of these arrows give events J & K as
new initial events. These will be numbered as 9 & 10 respectively.
(vi) From ‘J’ & ‘K’, one arrow each emerges from each node i.e. n & o.
Deletion of these arrows brings one to the last event L which shall
be numbered as 11.
The above network diagram with respective event numbers shall
accordingly be as below:
Symbol has been used to show replacement of the existing event
names with correct event numbers.

e
3 6
h
b C f F

a c g n
1 2 5 9 11

A B d E J o L
j l
4 7 10

D k G K
m

H
Fig. 3.7(b): Numbering of events in a network
42 Project Planning and Management with CPM & PERT

3.6.1 Skip numbering: In the above example, there were only 11 events
which could be easily incorporated in the network diagram sequentially, duly
reflecting the consistency in it. In practice, a network requires numerous
activities and events for its formulation where extensive modifications and
re-doing may be required both before and after finalization of the network
and also during progress of the work on ground. Under such situations,
network if prepared from numbers 1, 2, 3, 4, ……, i.e. without leaving any
numbers in between, addition of any new event would necessarily require
inclusion of new event number after the end event number of the already
drawn network.
For example, in the above case, if there is a requirement of additional
events between events 6 & 9 and 4 & 8, then number to the former event
shall be 12 and to the later it will be 13 i.e. after the last event i.e. 11 of the
existing network. Evidently, a number 12 between 6 & 9 and 13 between
4 & 8 shall not only look unsystematic and inconsistent but also would be
breaking the symmetry and sequence of the diagram.
To avoid such situation, numbering of the events is done by skipping the
numbers and putting events’ number in that pattern viz. 10, 20, 30, ……
etc. Thus, at a later date if there is requirement of new events’ number, that
can be given from amongst the numbers falling between already assigned
numbers. Another system may be leaving certain numbers at a regular
interval viz. 5, 6, 7; 15, 16, 17; 25, 26, 27 and so on in the initially drawn
network and subsequently using them as event numbers for the redrawn,
updated or corrected network diagram. One can use any other possibilities
to cater for such ground requirements; the choice is wide open. This type of
numbering is known as skip numbering.

3.7 Estimation of Time in CPM Network

CPM network is characterized by deterministic time estimates. Time for
completion of individual activity and for the entire project under a CPM
network is based upon the experience, knowledge, maturity and judgment
of the person responsible for drawing it. There is no room for probability,
uncertainty or speculation and therefore, the person preparing the CPM
shall take inputs from expert professionals, project managers, literature and
technically competent personnel to firm up the time for individual activities
and for the entire project in totality. These inputs are genuinely based upon
the fair degree of confidence and maturity and thus, a firm time line for
performing an activity is drawn. Accordingly, there is only one time estimate
for each activity in CPM. This point is brought out in Fig. 3.8.
Critical Path Method 43

Relative Relative
frequency frequency
of of
occurrence occurrence

to=5 15 tp=25 to= 12 15 tp=18

Time Time

Fig. 3.8-(a) Fig. 3.8-(b)

Note: ‘to’ and ‘tp’ represent optimistic time and pessimistic time
estimates respectively and shall be discussed under PERT-network.
Fig. 3.8-(a) shows that there is more uncertainty whereas in Fig. 3.8 (b)
uncertainty is less and the system tends to be a more deterministic model.
CPM network is most commonly used in engineering construction
projects and repetitive types of works.
Example 3.3: To begin with, we will take a simple work of concreting in
foundation, having following activities:
Activity Activities description Duration
Name (weeks)
a Digging in foundation 4
b Formwork and shuttering for concreting in foundation 2
c Concreting in foundation 3

From this table, network diagram is prepared as shown in Fig. 3.9

T=0 T=4 T=6 T=9

a b c
1 2 3 4
t=4 t=2 t=3
weeks weeks weeks

Fig. 3.9

In developing this network, following points have been considered:

¾¾ Activity name has been given to each activity description.

¾¾ Sequence of the activities has been decided and network diagram
prepared through arrows (activities/jobs) and circles (events/nodes).
44 Project Planning and Management with CPM & PERT

¾¾ Names of the activities have been written at the centre above the
arrows.
¾¾ Time durations of the activities is placed at the centre below the
arrows.
¾¾ Earliest time for events is mentioned on the top of the respective
events.
¾¾ Earliest time for accomplishment of the entire work is 9 weeks.

Various entities involved in this network are described as hereunder:

An activity commences from an event and finishes at an event. Event at
the tail end of the arrow is the beginning one i.e. predecessor event and one
at the head of the arrow is the end event i.e. successor event. Accordingly, if
i denotes the predecessor event and j denotes successor event of a particular
activity i-j, then its duration is represented by tij. Earliest time at which
events 1 & 2 can be accomplished is 0 and 4 weeks respectively.
In the example under Fig. 3.9, for activity ‘a’ following are the important
features:

¾¾ Activity under consideration: ‘a’ i.e. activity 1-2

¾¾ Predecessor event is 1 i.e. at the tail end of the activity
¾¾ Successor event is 2 i.e. at the head end of the activity
¾¾ Event 2 is also the beginning of the activity 2-3 i.e. ‘b’
¾¾ Duration (time) of the activity 1-2 is 4 weeks (i.e. t12 = 4 weeks)
¾¾ Earliest event time for event 1 is 0 and for event 2 it is 4 weeks
¾¾ Earliest event time for successor event is equal to earliest event
time for predecessor event plus time duration for the activity in
between the events i.e.
TE (successor event) = TE (predecessor event) + tE (activity)

3.7.1 Earliest Event Time: Earliest event time for an event is the time
when an event can be said to have occurred at the earliest. In the above
example shown under Fig. 3.9, the network was simple, linear and straight
forward without any concurrent or parallel activities. One has to simply
move in the network from left towards right, add the time duration and
derive earliest event time for the respective events. This example was to
acquaint the reader with various aspects associated with the activities and
events in a CPM network. In general, while preparing a CPM network for
any construction project, there is multiplicity of the activities and events
Critical Path Method 45

necessitating their interdependencies and interrelationships which makes

the job of the planner quite tedious and cumbersome in order to make the
network worthy of understanding, working and implementation.
Example 3.4: To explain this issue we will take example of the network
shown in Fig. 3.10-(a) where time for the activities is taken in weeks.

TE = 6 TE = 10
e
3 5
4 g
c
TE = 0 TE = 3 3 TE = 13 TE = 15
3
a b h
1 2 6 7
3 8 2
d f
4 5
4 TE = 7

Fig. 3.10-(a)

In this network there are 8 activities and 7 events. To accomplish the

entire project, there are three possible paths i.e. 1-2-3-5-6-7, 1-2-6-7 and
1-2-4-6-7. Event number 6 can be arrived through three paths namely 1-2-
3-5-6, 1-2-6 and 1-2-4-6. The question here shall be as what shall be the
earliest event time for event-6. Taking the help of the equation discussed
above earliest event times for event-6 shall be derived.
TE (successor event) = TE (predecessor event) + tE (activity)

•• By choosing the first path i.e. 1-2-3-5-6, event-6 can occur at time
T = 13 weeks.
•• By following the second path i.e. 1-2-6, event-6 can occur at time
T = 11 weeks.
•• By selecting the third path i.e. 1-2-4-6, event-6 can occur at time
T = 12 weeks.

As per the guidelines for CPM network under Para 3.3 above, no event
can be considered as occurred or reached until all the activities leading to it
have been completed.

¾¾ Thus, assigning earliest event time to event-6 equal to 11 weeks

would reveal that all the activities along the path 1-2-3-5-6 and 1-2-
4-6 have not been completed.
46 Project Planning and Management with CPM & PERT

¾¾ Assigning earliest event time to event-6 equal to 12 weeks would

reflect that all the activities along the path 1-2-3-5-6 have not been
completed.
¾¾ However, if the earliest event time to event-6 is taken as 13 weeks,
it means that all the activities leading to this event have been
successfully completed.

Therefore for event number-6, earliest event time is 13 which is denoted

as T6E = 13
Example 3.5: Let us make another trial by changing the network shown
under Fig. 3.10-(a) as below:

TE = 6 TE = 10
e
3 5
4 g
c f
TE = 0 TE = 3 3 4 TE = 10 3 TE = 15 TE = 17
a b h k
1 2 6 7 8
3 4 5 2
d j
4
5
4
TE = 7

Fig. 3.10-(b)

In this network; event-6 can be reached from two paths i.e. 1-2-3-6 and
1-2-6.

•• By choosing the first path i.e. 1-2-3-6, event 6 can occur at time
T=10.
•• By following the second path i.e. 1-2-6, event 6 can occur at time
T=7.
¾¾ Assigning earliest event time T=7 to event-6 would reveal that
although all the activities along the path 1-2-6 have been completed
but all the activities along the path 1-2-3-6 have not been completed.
¾¾ However, if event-6 is assigned earliest event time T=10, all
the activities along both paths i.e. 1-2-3-6 and 1-2-6 have been
completed.

Therefore, earliest time of occurrence for event-6 shall be T=10. We

denote it as T6E =10.
Similarly, event-7 can be reached by following four paths namely 1-2-3-
5-7, 1-2-3-6-7, 1-2-6-7 and 1-2-4-7.
Critical Path Method 47

•• Path 1-2-3-5-7 gives earliest occurrence time to event -7 as T=13.

•• Path 1-2-3-6-7 gives earliest occurrence time to event 7 as T=15.
•• Path 1-2-6-7 gives earliest occurrence time to event 7 as T =12.
•• Path 1-2-4-7 gives earliest occurrence time to event 7 as T = 12.
¾¾ Assigning earliest event time T=12 to event-7 would mean that
the activities along paths 1-2-3-5-7 and 1-2-3-6-7 have not been
completed.
¾¾ Assigning T= 13 to event-7 would reveal that although activities
along the paths 1-2-3-5-7, 1-2-6-7 and 1-2-4-7 have been completed
but the activities along the path 1-2-3-6-7 have not been completed.
¾¾ However, if event-7 is assigned T=15, it means all the activities
along all the paths leading to event-7 have been completed.

Therefore earliest event time to event-7 is 15 which is denoted as T7E =

15.

3.7.2 Key to Evaluate Earliest Event Time (TE ): From above examples
under Fig. 3.10(a) and 3.10(b), it is evident that whenever, there is more
than one path to reach an event, value of TE for the said event shall be
maximum of the time taken out of different paths reaching that event.
Therefore, following equation holds the key to calculate TE for an event.
TE (successor event) = M
aximum of {TE (predecessor event) + t(activity)}
TjE = Maximum of (TiE + tij)
In a pictorial form this can be depicted as below;

e
T E = 10
E

eg g
f t =3
T E = 10 T E = 15

F G
fg
t =5

dg
t =5
D d
T E=7

Fig. 3.11
48 Project Planning and Management with CPM & PERT

This part of network has been derived from Fig. 3.10(b). Events D, E, F
& G in Fig. 3.11 correspond to events 4, 5, 6 & 7 of Fig. 3.10(b).
Time duration for activity EG, FG and DG is 3, 5 and 5 weeks
respectively.
Event-G can be reached by three paths i.e. EG, FG and DG. Thus,
earliest event time for event-G shall be the maximum value from amongst
the following;

•• TeE + teg = 10 + 3 = 13 weeks

•• TfE + tfg = 10 + 5 = 15 weeks
•• TdE + tdg = 7 + 5 = 12 weeks

The maximum of these values is 15 weeks and thus, earliest event time
for event-G is 15 weeks. We denote this as TgE = 15 weeks.
Therefore, to calculate the earliest event time for an event which can
be reached from various paths/routes, following step- by – step approach
shall work as a guiding tool.
Step-1: Identify the paths/routes reaching at this event.
Step-2: Calculate the earliest event time for its immediate predecessor
events on those identified routes.
Step-3: Add the interconnecting activity’s time to the immediate
predecessor event time on those identified routes.
Step-4: The maximum of the value attained in step-3 shall be Earliest
Event Time to the event under consideration.
In equation form, this is represented as below:
TjE = Maximum of (TiE + tij)
Where, i-j is the activity connecting the events i and j.
3.7.3 Latest Allowable Occurrence Time: Latest event time for an
event as the title suggests is the latest time by which an event must be
completed in order to keep the project on schedule. The necessity of this
time has been generated due to certain time margin i.e. float available for
performing an activity. This aspect shall be discussed subsequently. In the
case of Earliest Event Time (TE), efforts are to accomplish the tasks at the
earliest whereas, in Latest Allowable Occurrence Time of an event, there
is a margin/play available to complete the event. This will be clear as we
proceed with examples. For presentation purpose, latest allowable time is
denoted as TjL.
Critical Path Method 49

Let us take a simple example of Fig. 3.9 as reproduced below:

TE = 0 TE = 4 TE = 6 TE = 9
a b c
1 2 3 4
t=4 t=2 t=3
weeks weeks weeks
TL = 0 TL = 4 TL = 6 TL = 9

Fig. 3.12

In this case, network is simple, unidirectional and straight. Total

project time is 9 weeks and earliest event times (TE) for each event is shown
on the top of the respective nodes. Earliest event time for the end event is
9 weeks which is also the project completion time since there is no margin
or play available for the activities to be delayed. Thus, the latest allowable
occurrence time for the end event is 9 which is denoted as T4L = 9. Starting
back-word in the network, activity 3-4 takes 3 weeks for its completion.
Therefore, latest time by which this activity 3-4 starts is 6 weeks (i.e. 9–3).
Evidently, this is the latest allowable occurrence time for event-3.
Similarly, for event-2 we will take activity 2-3 which takes 2 weeks for
its completion. This means that activity 2-3 can start latest by 6 – 2 = 4
weeks. This is evidently the latest allowable occurrence time for event-2.
On the same pattern, activity 1-2 takes 4 weeks for completion. This
means that activity 1-2 can start latest by 4–4 = 0 weeks. This automatically
becomes the latest allowable occurrence time for event-1.
In this network diagram, there is no margin or play or float available for
any activity and therefore, TE and TL time for individual events i.e. at each
node are identical.
In this example, there was single activity coming out of the event. Further,
there was no margin or play available for possible late commencement
of any activity or job in the network. Therefore, there was no difficulty
encountered in calculating TL values of the events. In the networks where
there are more than one activity emerging out from any event, calculating TL
for the events becomes slightly tricky and challenging. We will take example
of the network under Fig. 3.10(b) with slight modification of activity time
durations and event numbers as below:
50 Project Planning and Management with CPM & PERT

TE = 6 TE = 10
TL = 6 TL = 10
3 6
TE = 0 TE = 3 4 TE = 14 TE = 16
TL = 0 TL = 3 2 TE = 8 4 TL = 14 TL = 16
3
TL = 11
1 2 5 7 8
3 5 3 2

4
6
4
TE = 7
TL = 8

Fig. 3.13

In this network, TE for the last event i.e. event 8 is 16 weeks. This is
the project completion time. Latest event occurrence time TL for the last
event is considered to be equal to TE for the last event i.e. T8L = 16. This
necessarily has to be so unless some condition is placed to have different
values of TE and TL for the last event. With this presumption, TL for the
preceding events shall be calculated as below:
Event-7 is the preceding event to event-8. Time taken for completion
of the activity 7-8 is 2 weeks. This means that latest time by which event-7
can be completed is T8L–2 i.e. 16–2 =14 weeks. Thus, T7L= 14 weeks.
On the similar analogy,

¾¾ T6L = T7L – 4 = 14 – 4 = 10 weeks.

¾¾ T5L = T7L – 3 = 14 – 3 = 11 weeks.
¾¾ T4L = T7L – 6 = 14 – 6 = 8 weeks.

While calculating TL values for these events, straight equations were

used since all the preceding events had single emerging arrow and single
succeeding event.
The case for event-3 and event-2 shall not be so simple since event-3
is the preceding event to event-5 and event-6. Similarly, event-2 is the
preceding event to events-3, 4 and 5. TL values for event-3 and event-2 shall
be calculated as below:

TL value for Event-3

•• Moving backwards from event-5 to event-3, latest event time for
event-5 is T5L = 11 weeks. Time taken in completing the job 3-5 is
2 weeks. Thus, from this path, latest event time for event-3 shall be
T3L = 11 – 2 = 9 weeks.
Critical Path Method 51

•• Moving backwards from event-6 to event-3, latest event time for

event-6 is T6L = 10 weeks. Time required for accomplishing the
activity 3-6 is 4 weeks. Thus, from this path, latest event time for
event-3 shall be T3L = 10 – 4 = 6 weeks.
Thus, we have two values of TL for event-3 i.e. 9 weeks and 6 weeks
respectively.
•• If we take TL value for event-3 as 9 i.e. T3L = 9 weeks, value of
TL for event-6 should be 13 weeks, so that by moving backwards
from event-6 to event-3, value of TL for event-3 shall be 13 – 4 = 9
weeks.
Such change in the TL values of the subsequent events will also lead
to change in the TL value of the last event which we had otherwise
assumed equal to TE i.e. earliest event time of the last event. This in
turn will result in a complete change of the network diagram, thus
forfeiting the very purpose of planning.
To avoid such a situation, and for completion of the project in a
pre-decided timeframe, the earlier time (i.e. TE values) is more
demanding, and therefore, the latest occurrence time for event-3
shall be the least of the TL values derived from different possible
paths. Accordingly, for event-3, T3L = 6 weeks.

TL value for Event-2

•• Moving backwards from event-3 to event-2, latest event time for
event-3 is T3L = 6 weeks. Time taken in completing job 2-3 is 3
weeks. Thus, latest time by which event-2 can be performed shall
be T2L = 6–3 = 3 weeks.
•• Moving backwards from event-5 to event-2, latest event time for
event-5 isT5L= 11 weeks. Time taken in completing the job 2-5 is 5
weeks. Thus, latest time by which event-2 can performed shall be
T2L = 11–5 = 6 weeks.
•• Further, moving backwards from event-4 to event-2, latest event
time for event-4 is T4L = 8 weeks. Time taken in completing the job
2-4 is 4 weeks. Thus, latest time by which event-2 can be performed
shall be T2L = 8–4 = 4 weeks.

Thus, we have three TL values for event-2, i.e. 3 weeks, 6 weeks

and 4 weeks respectively.
52 Project Planning and Management with CPM & PERT

•• If we take TL as 4 weeks for event-2, then values of TL for event-5

should be 9 weeks, so that by moving backwards from event-5 to
event-2, value of TL for event-2 shall be 9 – 5 = 4 weeks. In the
process latest occurrence time of the subsequent events and overall
project completion time shall be changed. With the same logic, by
taking TL as 4 weeks for event-2, the values of TL for event-3 should
be 7 weeks so that by moving backwards from event-3 to event-2,
value of TL for event -2 shall be 7–3 = 4 weeks. This will affect the
latest occurrence times of the subsequent events leading to delayed
completion of the entire project.
•• Similarly, if TL is taken as 6 weeks for event-2, there will be
consequent changes in the subsequent events’ times and also on
the overall completion time of the project as per the logic described
above.
•• If TL = 3 weeks for event-2, there will be neither change in the
TL values of subsequent events nor on the completion time of the
project.

Therefore, for completion of the project in time, under such situation,

when there are more than one latest occurrence times for an event, the
smallest of the values is taken as the latest occurrence time. Accordingly, in
this case, for event-2 latest occurrence time T2L shall be 3 weeks.
3.7.4 Key to Evaluate Latest Allowable Occurrence Time (TL): With
the discussion as above, it is evident that TL value for the events in a network
diagram requires a clear vision of the project and its completion time. It
needs a systematic approach and meticulous planning effort. Following
step-by-step approach shall be of help in arriving at TL values of the events.
Step-1: Identify the various paths/route reaching the event in backward
direction from its immediate successor events.
Step-2: Check the time consumed in the identified paths.
Step-3: Calculate the TL values for the said event by subtracting the
time duration consumed in the identified path from the TL
values of the immediate successor events.
Step-4: The minimum of the TL values derived in step-3 shall be the TL
value for the said event.
TiL = Minimum of (TjL – tij)
Where, i-j is the activity connecting the events i and j.
Critical Path Method 53

3.8 Introduction to Slack Time

In the true grammatical meaning slack time refers to relaxed or loose time.
In network diagram also it has similar connotation. Technically, slack time
is more commonly used in event controlled network viz. PERT, but it is
equally applicable to CPM network also. While calculating the slack time
of events, it will be revealed that it helps in identifying the critical path of
the network. Slack time is the difference between the Earliest Event Time
and Latest Occurrence Time of an event. It is denoted by ‘τjs’ or ‘s’ where j
denotes the jth event of the network and τjs or ‘s’ represents the slack time
for the said event. In the equation form it is shown as:
τjs = s = (TjL – TjE)
3.8.1 Calculating Slack Time in Tabular Form: In the network
shown in Fig. 3.13, values of TE and TL have been calculated in a logical
manner to give their correct values to the respective events. The same can
be calculated in a tabular form for ease and deriving certain other specific
information as below:
Table 3.1

Activity (i-j) Activity

(TjE) as TjE as TiL TjL Slack time
Suc- Prede- Duration derived cor- Ԏjs
cessor cessor rected = (TjL–TjE)
tij
event - j event - i
8 7 2 16 16 14 16 0
7 6 4 14 #
14 #
10 14 0
7 5 3 11 14# 11 14 0
7 4 6 13 14 #
08 14 0
6 3 4 10 10 6 10 0
5 3 2 08* 08* 09 11 +3
5 2 5 08* 08* 6 11 +3
4 2 4 07 07 04 08 +1
3 2 3 06 06 03 06 0
2 1 3 03 03 00 03 0

Note: Slack time for event-5 is 3 weeks and for event-4 it is 1 week. Path
following the events having zero slack values is the critical path and shown in
thick lines.
# shows maximum of the TE values for event-7.
* shows maximum of the TE values for event-5. In this case both are equal to 8
54 Project Planning and Management with CPM & PERT

T3E = 6 6
T E = 10
T3L = 6 T6L = 10
S=0 S=0

T1E = 0 T2E = 3 3 6 7
T E = 14 T8E = 16
4 7
T1L = 0 T2L = 3 T L = 14 T8L = 16
2 4
S=0 S=0 3 T5E = 8 S=0 S=0
5
T L = 11
1 2 5 7 8
3 5 S = +3 2

4 6
4 T4E = 7
T4L = 8
S = +1

Fig. 3.14

Path 1-2-3-6-7-8 is critical path in this network diagram.

3.8.2 Pictorial Explanation of Slack Time (Randomly Taken

Network)

Time in
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
weeks
TE = 7 TE = 10
EL = 7 EL = 10

3 5
TE = 3 3
TE = 0 TE = 12 TE = 14
EL = 0 EL = 3 2 EL = 12 EL = 14
4

1 2 6 7
3 2
4 4
3
3
TE = 7 4 4
EL = 9
Slack
Time
(2 weeks)

Fig. 3.15: Slack Time on a network

hat slack time denotes has been discussed already, but how it impacts
W
the network can be understood by drawing a net work and studying it
as per Fig. 3.15.
Critical Path Method 55

In this figure solid circle, i.e. 4 shows TE = 7, whereas, dotted circle

4 shows TL = 9. Thus, earliest event time is 7 weeks and latest occurrence
time is 9 weeks.

¾¾ If the event-4 is completed on 7 week’s time (i.e. earliest event

time), then there is time space of 5 weeks for completion of activity
4-6 (i.e.12 weeks for event-6–7 weeks for event-4) . However,
time required for completion of this activity 4-6 is 3 weeks only.
This reveals that there is a margin or space or play of 2 weeks for
performance of activity 4-6 (5 weeks time space – 3 weeks required
for completion). This margin is referred as float which will be dealt
with subsequently.
¾¾ However, if the event-4 is completed on 9 week’s time (i.e.
latest occurrence time), then there is a time space of 6 weeks
for completion of the activity 2-4 (i.e. 9 weeks for event-4 – 3
weeks for event-2). However, time required for completion of this
activity 2-4 is 4 weeks only. Thus, there is a margin of 2 weeks for
performance of the activity 2-4. This is float time and will be dealt
with subsequently.

It is important to note that for all other events, values of TE are equal
to TL individually and therefore, solid circles would cover the dotted circles
as they will fall on each other. Critical path shall be along the events where
there is zero slack time. Accordingly, path 1-2-3-5-6-7 shown in dark thick
lines shall be the critical path in this network.

3.9 Float
We have so far discussed the time element associated with the events and
on that basis slack time for the events were calculated and critical path for
the network identified. Equally important is the time element associated
with the activities or jobs of the network diagram. For an activity i-j, there
are four time estimates as below:
Earliest Start Time (EST): The EST refers to the time before which
the activity cannot begin. Thus, it is the earliest occurrence time for the
event from which the activity or job arrow shall originate. It is denoted as
TiE. Thus, EST=TiE.
Earliest Finish Time (EFT): When time duration of the activity i-j is
added to the earliest occurrence time of the event from which activity arrow
originates, EFT is arrived at. Thus, EFT = TiE+tij.
Latest Start Time (LST): This is the time arrived at by subtracting the
activity time duration from the latest occurrence time of the event at which
the activity arrow terminates. Thus, LST = TjL - tij.
56 Project Planning and Management with CPM & PERT

Latest Finish Time (LFT): This is the latest occurrence time for the
event at which the activity arrow terminates. It is denoted as LFT = TjL.
Thus, EST is synonymous to Early Event Time of the node from which
activity arrow originates and LFT is synonymous to the Latest Occurrence
time of the node at which the activity arrow terminates. Following figure
depicts these four time estimates pictorially.

i
TE

EST ij EFT
t TL
j

LST LFT
tij
Time in
weeks 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

TE = 0 TE = 12 TE = 14
EL = 0 EL = 12 EL = 14
EST=3 LST = 5
1 2 2 6 7
3 2
4
3
4 3
4 4

EFT = 7 LFT = 9

Fig. 3.16

Fig. 3.16 is derived from Fig. 3.15 and shows part network for the
purpose of defining EST, EFT, LST & LFT. Activity 2-4 has been taken for
this purpose. Arrow originates from event-2 and terminates at event-4.
Time duration for activity 2-4 is 4 weeks.
Considering the overall network of Fig. 3.15, Latest Event Time for
event-4 is 9 weeks and Earliest Event Time for event-2 is 3 weeks. Thus, for
activity 2-4, total time availability from the network viewpoint is 6 weeks (i.e.
9 weeks – 3 weeks) whereas it takes only 4 week’s time for its completion.
This means there is a margin/gap/space/play of 2 weeks (6 weeks – 4 weeks)
for performing this activity. This margin is the main reason for study of EST,
EFT, LST & LFT which are helpful in deriving floats for the activities.
If the job 2-4 is completed on the EFT i.e. at 7 weeks, it is left with 2 week’s
time for commencement of its subsequent job i.e. 4-6. These time spaces are
defined as float and shall be discussed in subsequent paras.
There are three types of floats in a net-work diagram; total float,
independent float and free float.
Critical Path Method 57

3.9.1 Total Float: For an activity i-j we have four time estimates as
discussed above; EST, EFT, LST & LFT as shown in the following figure.

Time
(days) 1 2 3 4 5 6 7 8 9 10 11 12

Total Float
1
i j
ij
t = 6 days
EST=2 EFT=8
i
TE
i j
tij = 6 days
LST=4 LFT=10
TjL
Total time available for activity–ij= 8 days
Actual time required for completing activity–i j = 6 days
Total Float time for activity–ij = 86 = 2 days

Fig. 3.17
This figure depicts following:
The maximum time available for performing job i-j is the difference
between its earliest start time and latest finish time i.e. TjL–TiE, which is
equal to 10 – 2 = 8 days. However, the time required for actual completion
of this activity i-j is 6 days only. Thus, we have 2 days’ extra time (i.e. 8 – 6
= 2 days) over and above the actual time required for completion of the job
i-j. This extra time is termed as float.

¾¾ EST for the activity i-j is 2 days i.e. it cannot begin before 2
days. This is also the earliest event time for i. Time duration for
completion of activity i-j = 6 days. Therefore, EFT for activity i-j
shall be; EST + 6 = 2 + 6 = 8 days. EST and EFT are shown with
firm circles.
¾¾ LFT for activity i-j is 10 days i.e. it cannot go beyond 10 days. This
is also the latest event time for j. Time duration for activity i-j = 6
days. Therefore LST for activity i-j shall be; LFT – 6 = 10 – 6 = 4
days. LFT and LST are shown with dotted circles.
¾¾ Total float for the activity i-j shall be 2 days.
Total float for activity i-j = Maximum time available – Actual time
for the activity i-j required for
the activity
i-j
= (TjL – TiE) - tij
= (TjL – tij) - TiE
58 Project Planning and Management with CPM & PERT

= LST – TiE
= LST of the activity–EST of the activity
= L atest Start Time of activity i-j – Earliest
Start Time of activity i-j
Total float has been shown by a dark arrow in the network above.

3.9.2 Free Float: The bottom line in free float is that all events are
considered to have occurred on their earliest event times. It is one of
the possibilities that may happen in a network. This evidently means
that all the activities shall start at their EST. This is explained in
Fig. 3.18.

Time
(days) 1 2 3 4 5 6 7 8 9 10 11 12
i
Free EST (T E)=1 EST (TjE)=5
Float
i j k
tij=3 days tjk=4 days

j
T E=5 days

TiE+tij=1+3=4 days

Free
Float

Independent Float TiE TiL TjE TjL

h i j k
hi
t =2 tij=2 jk
t =1

TjE - TiL

i
TE TjE =8

h i j k
i j
Independent float for i-j =
i
j i
TE – TL – t
ij
T L =5 TjL
= 8–5–2
= 1 day TiL is assumed 5 days for this case

Fig. 3.18: Pictorial presentation of Free float and Independent float

Critical Path Method 59

In this network, activities i-j and j-k have been considered wherein
activity j-k is the successor activity to i-j. As brought out above, the events
are assumed to have occurred on their earliest event times, therefore we will
assign earliest event times to each event i and j as TiE and TjE respectively.
This evidently reveals that;
EST for activity i-j = TiE. = 1 day
EST for activity j-k =TjE.= 5 days
Time available for the activity i-j = TjE – TiE.
Actual time required for completing activity i-j = tij
Free float for activity i-j = TjE – TiE-tij
= TjE – (TiE+tij)
= TjE – Earliest Finish Time (EFT) of activity
i-j
In the above example, tij = 3 days
EFT for activity i-j = TiE+ tij= 1 + 3 = 4 days
Free float for i-j = 5 – 4 = 1 day
Thus, free float of an activity is the difference between the earliest start
time (EST) of its succeeding activity and the earliest finish time (EFT) of
the activity under consideration.
3.9.3 Independent Float: The basis of consideration in this type of float
is that for an activity under consideration, it is assumed that its preceding
activity is completed at the latest finish time and its succeeding activity
starts at the earliest start time.
To understand this, Fig. 3.18 may be referred. It shows three activities
h-i, i-j and j-k. Time duration for these activities are thi, tij and tjk respectively.
Since independent float is based on latest finish time of the preceding
activity, therefore, for activity i-j, we will target latest finish time (LFT) of
the preceding activity h-i which is TiL in this case. Next point of interest is
the earliest start time (EST) of the succeeding activity j-k which is TjE. The
margin/space available for the activity i-j shall be between (TjE – TiL) and tij,
which is defined as independent float.
Calculations for independent float for activity i-j may be done as
hereunder:
Time duration for activity i-j = tij
Latest finish time for its predecessor activity h-i = TiL
Earliest start time for its successor activity j-k = TjE
Total time available for activity i-j = TjE – TiL
60 Project Planning and Management with CPM & PERT

Actual time required for completion of the activity i-j = tij

Independent float for activity i-j = TjE – TiL – tij
= (TjE – TiL) – tij
If negative, the independent float is taken as zero.
3.9.4 Interference Float: Interference float is the difference between
total float and free float.
Interference float = Total float – Free float
Example 3.6: Floats will be better understood through an example and
its tabular entry as shown below:

3
TE=8 T5E = 14
T3L = 8 T5L = 15
3 6 6
T1E = 0 TE=4
2 6
T E = 11
8
T E = 18
9
T E = 20
T1L = 0 T2L = 4 4 3 3 T8L = 18 T9L = 20
T6L = 11
1 2 5 8 9
4 6 7 2

5 0
6 4 5
4 7
4
T4E = 9 7
T E = 13
T4L = 10 T7L = 14

Fig. 3.19
Table 3.2: Three types of Floats in a tabular form

1 2 3 4 5 6 7 8 9 10 11
Activity Duration Earliest Latest Total Free Independent Remark
Beginning Ending Start Finish Start Finish Float Float Float (IF)
(j) (TF) (FF)
(i)
1 2 4 0 4 0 4 0 0 0
Critical Path Method

1 4 6 0 6 4 10 4 3 3
2 3 4 4 8 4 8 0 0 0
2 4 5 4 9 5 10 1 0 0
2 5 6 4 10 5 11 1 1 1
3 5 3 8 11 8 11 0 0 0
3 6 6 8 14 9 15 1 0 0
4 7 4 9 13 10 14 1 0 –1* ‘IF’=0
being (-)ve
5 7 0 11 11 14 14 3 2 2
5 8 7 11 18 11 18 0 0 0
6 8 3 14 17 15 18 1 1 0
7 8 4 13 17 14 18 1 1 0
7 9 5 13 18 15 20 2 2 1
8 9 2 18 20 18 20 0 0 0
9 next - 20 - 20 - - - - For ref only
61
62 Project Planning and Management with CPM & PERT

3.10 An Introduction to Activity on Node (AON)

As discussed in Para 3.3.2 above; in this technique, activities are represented

by nodes and not by arrows. Along with the activity description, its number,
duration, Earliest Start, Earliest Finish, Latest Start and Latest Finish are
also reflected in the network diagram. Following example will make it clear.
Example 3.7: Consider activities in the table given below. The
predecessors of each activity and duration of the activities are given.
Prepare a network diagram by AON technique. Also show the critical path.
Activity Predecessors Duration (days)
A - 3
B A 2
C B 5
D B 4
E C 9
F C, D 2
G E, F 1

5 10 10 19
C,5 E,9
5 10 10 19

0 0 3 3 5 19 20 20
Start A,3 B,2 G,1 End
0 0 3 3 5 19 20 20

13 17 17 19
D, 4 F, 2
5 9 10 12

Legends: ES – Earliest start time for activity

EF – Earliest finish time for activity
LS LF LS – Latest start time for activity
Name, Time
LF – Latest finish time for activity
ES EF Name – Activity name
Time – Activity duration

Fig. 3.20: Activity on Node (AON) Network

Critical path from this network is A-B-C-E-G and shown by a thick line.
Critical Path Method 63

Questions
1. Is CPM an improvement over Gantt chart and WBS structure? Explain,
how?
2. What is critical path? How it is calculated?
3. List the rules of identifying critical path of a network.
(CS-2003 : 10 marks)
4. Can a network have more than one critical path? Show with examples.
5. Differentiate between slack and float. How these are useful in a
network?
6. What is the difference between ‘Free Float’ and ‘Total Float’? Explain
the significance of each term. (ESE- 1997 : 15 marks)
7. In a network, there are two paths from start to completion. Along path-1,
earliest event time and latest finish time are identical for all the events
falling on this path whereas for path-2, these times are not identical for
some intermediate events. Possibility of float and slack values shall be
in which of the paths?
8. Why dummy activities are necessary in a network? Is it possible to have
a network without dummy activities?
9. What are the main advantages of Activity on Node (AON) over Activity
on Arrow (AOA) networks? (ESE-2016 : 8 marks)
10. Identify activity and event from the following:
(a) Digging in foundation
(b) Foundation completed
(c) Bending and laying of reinforcement bars
(d) Taking car to garage
(e) Reinforcement bars laid
(f) Car servicing completed
(g) Plastering the wall
(h) Painting work completed.
11. Define :
EST; LFT; Total Float; Free Float; Interfering Float. (CS-2011 : 10
marks)
64 Project Planning and Management with CPM & PERT

Problems
1. Draw a CPM network diagram for construction of a semi underground
RCC water storage tank having following activities and durations:
(a) Site layout and marking on ground 01 week
(b) Digging for foundation 02 weeks
(c) Laying of rebars & RCC work up to ground level 06 weeks
(d) RCC up to roof top 05 weeks
(e) Water connection including fittings and fixtures 04 weeks
(f) Water proofing treatment including plastering;
internal & external 04 weeks
(g) Testing of the tank for leakage/seepage including
rectification if any 02 weeks
(h) Returning filling below ground level 02 weeks
(i) Handing over 01 week

Draw the critical path for the network and find the completion time.
2. You have to organise a One day’s Technical Seminar in your office
on a given topic which will be attended by speakers and guests from
different parts of the country. Seminar booklet shall have minimum
ten technical papers. There will be six speakers reading their technical
papers. Following is the time schedule.
(a) Fix/deciding the date of Seminar 7 days
(b) Calling for technical papers 28 days
(c) Receipt of technical papers 42 days
(d) Fixing the rates for magazine with publisher 14 days
(e) Proof checking of technical papers and their finalization 21 days
(f) Request letters to guest speakers for seminar 14 days
(g) Send magazine for printing and collect printed booklet 21 days
(h) Arrange accommodation and meals for seminar 14 days
(i) Arrangement of transportation 7 days
(j) Arrange venue and PA system 3 days
(k) Conduct Seminar 1 day
(l) Prepare Seminar proceedings and dispatch 7 days

Prepare CPM network for this Seminar and determine critical path.
Critical Path Method 65

3. Prepare a network diagram for construction of a security wall with

following configuration:
(i) Brick wall with RCC framework having RCC columns with RCC
plinth beam at ground level and RCC beam at the top of the wall.
(ii) ‘Y’ angle will be cast with RCC column at top. Barbed fencing shall
be provided on these ‘Y’ angles.
(iii) Brick wall shall be plastered on its both faces. Cement based paint
shall be applied on the plastered wall.
(iv) Angle iron ‘Y’ shaped shall be painted with synthetic enamel paint.
(v) Total time for completion of the entire project is six months.
4. From the following data, prepare the network diagram, find the
critical path and the least duration (without crashing any activity) for
completion of the project. Find also slack for all activities. (CS-1998: 40
marks)
Activity Duration Activity Immediately
(days) Preceding following
A 5 None B, D
B 3 A C
C 6 B F, I
D 5 A E, G, J
E 4 D F, I
F 2 C, E H
G 3 D H
H 6 F, G L
I 4 C, E K
J 5 D L
K 4 I L
L 4 H, J, K None
5. Draw the network and calculate various time values and floats using
CPM analysis for a project described below:
Activity 1-2 1-3 2-4 2-5 4-5 3-6 4-7 5-7 6-7
Duration
4 5 4 2 0 4 5 7 3
(days)
(CS-2006 : 10 marks)
66 Project Planning and Management with CPM & PERT

6. A construction project has following characteristics:

Activity Preceding Activities Duration (weeks)
A 5
B A 2
C A 6
D B 12
E D 10
F D 5
G D 5
H B 9
I C,E 1
J G 2
K F, I, J 3
L K 9
M H, G 7
N M 9
(i) Draw a network for this project.
(ii) Find various paths and the critical path as well as the project
completion time.
(iii) Prepare an activity schedule showing Earliest Start time, Earliest
Finish time, Latest Start time, Latest Finish time and float for each
activity.
(iv) Will the critical path change if activity G takes 10 weeks instead of
5 weeks? If so, what will be the new critical path? (ESE- 2018 : 12
marks)
4
PERT–Network

4.1 Introduction

In the Critical Path Method (CPM), duration of each activity is usually defined
with a reasonable degree of certainty based on the previous experience,
technical knowhow, maturity and judgment of the person preparing the
network. The emphasis in CPM is on the activities for performing the given
project in totality. In PERT network, emphasis is on the events that is on
the specific achievements, targets or milestones which may be in the form
of commencement or completion of the given tasks. For example followings
may be referred;

•• Excavation for foundation commenced

•• Reinforcement bars bending completed
•• Foundation concreting completed
•• Plastering work started
•• Work completed

These examples indicate start or completion of the specific tasks which

are important and significant points in the overall going of a project. It is
not that the project objectives attainable by CPM shall not be attained by
PERT rather, the objectives are attainable by both the techniques; the only
difference is of the approach which is activity oriented in CPM and event
oriented in PERT.
PERT was introduced by US Navy, which was concerned with the
performance trends on large military development programs and used this
technique on its Polaris Weapon System in 1958 after the technique was
developed with the help of a consulting firm in the US. Since that time PERT
has spread rapidly throughout the defence forces in most of the countries
as well as to large industrial projects. Although, this technique is not used
68 Project Planning and Management with CPM & PERT

extensively in engineering and construction projects, it provides valuable

information for assessing the risk of a schedule slippage of a project.

4.2 Time Estimates

This technique is based on probabilistic approach of scheduling as firm

time estimates cannot be made in advance due to inherent complexities
involved in the projects dealt in by this method. This is most widely used in
manufacturing industry, research & development projects etc. where there
is high degree of uncertainty involved. The fact that there is high degree of
uncertainty and unpredictability associated in dealing with such projects,
a reasonable time with confidence cannot be predicted for achieving the
targets. Even the most experienced manager can give only an educated
guess of the estimated time, which is subject to a wide margin of error.
Further, complex programmes, such as weapon system, mission to moon or
other planets, development of missile programme, new technology for fast
moving planes etc. require time for technological breakthrough that needs
to be incorporated in the overall schedule of the project. Evidently, it is like
predicting certainty in an environment of uncertainty which undoubtedly
is beyond human apprehension. Therefore, PERT technique uses three
time durations for each activity and the fundamental statistics to determine
the probability of a project finishing earlier or later than the expected
time. Accordingly, it is known as probabilistic model. No doubt, these time
estimates associated with each activity need to be estimated by experience,
work measurement and intelligent guess.
These three time estimates are:

(a) The Optimistic Time Estimate: This is the time estimate for
an activity under the most optimistic circumstances and thus is
the shortest time for performing the said activity under ideal
conditions. It is assumed that there will be no delays, hiccups and
setbacks and the work shall be completed as originally planned.
Better than the normal conditions are assumed to prevail during
the going of the job. There is no iota of doubt or confusion at
any point of time during the course of the job about the ground
realities. This is the time estimate assuming that everything will go
well and is evidently the minimum, but has a very low chance of
being realized in actual practice. This is when unusual good luck is
experienced, and everything goes right the first time. There is only
a very small chance of completing the activity in less than this time.
This is represented as to.
PERT–Network 69

(b) The Pessimistic Time Estimate: This is the maximum time

that is required for accomplishing the given task under most
adverse conditions. Ground situations beyond normal working are
presumed for working that may delay the job. The entire planning
action is considered to have gone for a six despite the best efforts
to bring it back on track. This is the time estimate based on the
assumption that everything sort of catastrophe is going to occur
and eventually is the maximum time, but has low chance of being
realized. It is based on the assumptions that if a thing can go wrong,
it will, and when the things are going fine, something has to go
wrong. This maximum time reflects the possibility of initial failures,
fresh starts, catastrophic events, hazards and risks inherent in the
activity. However, extra ordinary situations created due to acts of
God viz. earthquake, floods, cloud burst etc. are beyond the ambit
of such estimates. There is only a very small chance of expecting
the activity to exceed this time. This is represented as tp.
(c) The Most Likely Time Estimate: This estimate takes into
consideration the ground situations as most practical wherein the
working goes as normal with minor unavoidable hiccups, with no
unusual happening and with acceptable lapses. There is nothing
like exciting situation creating an atmosphere of confusion, doubt
and suspicion that would result in undue delay in the deliverables.
Effectively, the situation is normal, circumstances as usual and
working on the ground as practically possible for completion of
the job. It is the time that an activity would take more often than
any other time. This time estimate, therefore, lies in between the
optimistic time and pessimistic time estimates. This is represented
as tm.

4.2.1 Significance of Three Time Estimates: In CPM network, time

duration for an activity can be assigned based on the experience, knowledge,
maturity and judgment of the project manager. There are certain thumb
rules, empirical equations or existing solutions to determine the time
required for a job. Additional information to reinforce the time duration
as fixed by such informal and formal means may be had from discussion
among similarly place project managers, project management exerts or
academic institutions. Such time estimates are reasonably correct and
become the guiding tools for assigning the time durations to the activities in
CPM network diagram.
70 Project Planning and Management with CPM & PERT

In sharp contrast to CPM network, projects dealt under PERT network

are subject to uncertainty, risks and unpredictability. Their time estimates
cannot be done with reasonable confidence despite the best brains working
on those projects. Taking an example of missile program of a country, the
project director of the program cannot commit a firm date by which the
program will be implemented as it requires technological breakthrough,
coordinating the scheme with other equally unpredictable sub-projects,
monitoring and controlling the overall project till its logical conclusion. In
fact, developing a technology for a new project is like hunting for certainty
in an environment of uncertainty and converting the seemingly impossible
into possible. Thus, despite the unparalleled dedication, unflinching
commitment, deep knowledge and maturity of the project manager, a firm
date is not possible in such projects. Therefore, three time estimates i.e.
optimistic, pessimistic and most likely estimates are taken as the guiding
tools in the analysis of PERT network. It is however, necessary to understand
that imposing an impractical time schedule on the concerned project staff
shall be dangerous both for the project and staff as well. It is important
to note that the optimistic time and the pessimistic time may not deviate
by the same amount from the most likely time. In simple mathematical
terms, optimistic time and pessimistic time may not be symmetrical about
the most likely time.
4.2.2 Weighted Average of the Time: Three time estimates as discussed
above, would require extensive time to calculate the overall completion
time of a project. Therefore, for the purpose of evaluating time schedule of
PERT network, a weighted average of the three times is calculated to find
out the overall project duration. This average is called the expected time, te
and denoted by the following equation:
to + 4tm + tp
te = te = Eqn – 4.1
6
where te is expected time of the activity.
The results obtained by Eqn. 4-1 approximate those obtained from the
analysis of a beta-distribution and work satisfactorily in practice. This will be
seen in subsequent paras.
4.2.3 Average and Expected Time of an Activity: Equation 4.1 is the
most important equation in PERT network around which the entire analysis
is based. This shows the expected time for the activity under consideration.
This expected time is synonymous to average time. It indicates that there is
fifty-fifty possibility of getting that job done within that time.
PERT–Network 71

4.3 Statistical Data and PERT Network Analysis

PERT is necessarily a probabilistic model and therefore requires certain

statistical features and figures for analysis and understanding various
aspects associated with it. These include, mean, mode, variance, standard
deviation, probability, frequency distribution curve, probability distribution
curve, normal distribution curves, skewed distribution curves, beta
distribution curves etc. It is necessary to understand these statistical facts
and figures that are necessary to understand PERT analysis. The important
ones those are significant are described below:
4.3.1 Mean Value or Average Value: This is the average of the values
that are available for analysis. If there are ‘n’ numbers of data for analysis,
mean value shall be calculated as:

(X1 + X2 +X3 + …………..+ Xn )

Xmean =
𝑛𝑛

4.3.2 Range: This is the difference between the longest and the shortest
time taken for completing a job. For an example a job (i-j) is for digging the
foundation for a building having area of 200 sq m. Different experts may
give varying time estimates for the said task say 20 days, 22 days, 25 days,
28 days & 35 days. Thus, for the same task there is a range of 20–35 days.
One may say the range for task (i-j) is 15 days. It can also be put other way
round i.e. if the optimistic time for the task is 20 days and pessimistic time
as 35 days, the range for the job shall be 15 days.
4.3.3 Spread and Dispersion: In the case of range, there is information
about the longest and the shortest time, but has no value addition in the
information due to other intermediate values lying in between these two
values. For example, in the example under 4.3.2 above, time estimates
are 20, 22, 25, 28 and 35, but the range i.e. 15 days doesn’t bring out any
information about the type of spread of data, their individual position vis-
a-vis other values or average value and so on. Therefore, the concept of
spread or dispersion was necessitated by the statisticians. To cater for this, a
more satisfactory measure i.e. variance has been included.
4.3.3.1 Variance: It is the measure of dispersion of the data from the
mean value. It gives a fair idea about the spread of data from the mean
value and gives wider information to the observer. Variance is the square
of the standard deviation value of the data analyzed and is calculated as
hereunder:
72 Project Planning and Management with CPM & PERT

(i) Calculate the mean value of the data available for distribution.
(ii) Determine the deviation of each individual value from the mean
value.
(iii) Square the individual variations so arrived and add them all.
(iv) Find the mean of the square deviations arrived at (iii) above.

Figure arrived at (iv) is variance for the entire data values under
consideration and is denoted as σ2.
4.3.3.2 Standard Deviation: The square root of the variance is called
standard deviation and is denoted by σ. This also adds to the information to
the observer about the spread and dispersion of the data.
4.3.4 Probability: Probability is often connected with the words chance,
uncertainty and likelihood. It is like a dice which has six faces, when rolled
once while playing, the probability of getting a side with 4 number shall
be 1/6. It cannot be said with confidence that while rolling the dice one
would get a pre-decided face with absolute certainty, rather there is always
an element of uncertainty and chance which gives rise to probability.
Another example may be of mobile phones where a vendor has a large
number with him and roughly 20 % of them are defective. If someone picks
10 mobile phones from the vendor, the chances are that 2 may be defective.
However, if another 10 are picked, the chances may be that all are defect
free. Similarly, if another 10 are picked, it may have 4 defective. However,
if the entire lot is taken in totality there will be 20% defective pieces. Thus,
mathematically, if ‘n’ is the number of defective pieces in a lot of ‘N’ then
probability of picking a defective piece shall be = n/N.
4.3.5 Frequency Distribution Curve: This is the graph/curve plotted
between the available data against their frequencies of occurrence in the
set of data. For example, rainfall in mm at a station has following values
during a particular period:
400 600 500 550 680 700 550 600 550 440 580 680 650
580 750 450 600 650 580 600 580 600 580 800 700 600
680 580 650 600 450 450 680 600 500 650 680 650 500
475 600 500 550 580 600 500 680 550 500 550 475 700
550 500 500 600 680 500 600 600 600 500 500 600 600
PERT–Network 73

Frequency of occurrence of these 65 values is as shown below:

Value Time Value Time Value time
400 1 550 7 700 3
440 1 580 7 750 1
450 3 600 16 800 1
475 2 650 5
500 11 680 7

This frequency can be brought in a particular range pattern as below:

Table 4.1
Range (mm) Frequency (nos)
400 - 449 2
450 - 499 5
500 - 549 11
550 - 599 14
600 - 649 16
650 - 699 12
700 - 749 3
750 - 799 1
800 - 849 1

Above information has been shown on a bar chart as below. In this

case, range for the data has been taken as equal, therefore, area of each
rectangle shall be in proportion to the frequency distribution. Such a bar
chart is known as histogram.

20

15

10
Frequency

0
49 99 49 99 49 99 49 99
0-4 0-4 0-5 0-5 0-6 0-6 0-7 0-4
40 45 50 55 60 65 70 75

Rainfall range (mm)

Fig. 4.1: Histogram for the rainfall data

74 Project Planning and Management with CPM & PERT

In this histogram, the vertical axis gives the frequency of occurrence in

a given range as shown. For the purpose of drawing Fig. 4.1, two adjacent
ranges viz. 400–449 and 450–499 have been made to touch each other i.e.
no gap is left between them. In the present case, we have taken range for
rainfall as 50. However, if range value is changed, a different histogram
shall be achieved.
If the mid points of the top of these vertical bars are joined by straight
lines, we get a diagram known as frequency polygon. If the rainfall data
is large and the range value is reduced from present 50, the frequency
polygon will consist of a large number of straight lines of varying heights. By
further reducing the range, the frequency polygon shall assume the shape
of a smooth curve that is also known as frequency distribution curve. In the
limiting case, such curve may be as shown in Fig. 4.2.

25

20

15
Frequency
10

0
0 2 4 6 8 10
Rainfall range (mm)

Fig. 4.2: Frequency distribution curve

4.3.6 Normal Distribution Curve: When the data are spread equally
on either side of the mean value they are said to be distributed in a normal
manner and when shown on a frequency distribution curve they are
symmetrically placed on either side of the mean value.
PERT–Network 75

No.
of
jobs

A B

to tm tp
Time estimates

Fig. 4.3(a): Normal distribution

Fig. 4.3(b): Skewed distribution

4.3.7 Probability Distribution Curve: If the frequency distribution

curve is scaled down in such a manner that the area covered under it is
equal to unity, it is called probability distribution curve. It is called so since
the sum of the probabilities of an event occurring and not occurring is equal
to 1.
Probability distribution curve plays a very significant role in PERT
analysis as this helps in determining the probability of completion of a
project within allocated time.

4.4 R
elationship between Beta-Distribution Curve and
Variance

It has been established by the PERT analysts and statisticians that

Beta distribution (β–distribution) gives reasonably satisfactory results
for most of the situations in PERT related analysis. The shape of a
β–distribution curve is as shown in Fig. 4.4.
76 Project Planning and Management with CPM & PERT

Probability

to tm tp
Time duration

Range (tp – to)

Fig. 4.4: β-distribution

From β-distribution curve, following important points are derived

which are of significance for PERT analysis:

•• Range of the data is equal to the difference between the pessimistic

value and optimistic value = tP – to.
•• Standard deviation is approximately equal to 1/6th of the ‘Range’
value.
tp –−to
tp to
σ=
6
•• Variance is square of standard deviation.
Variance = σ2
2

t −t 
= p o 
 6 
•• Mode of the data values is made to correspond with the most likely
time tm.

As discussed under Para 4.3.3.1 above, variance is the measure of

dispersion of the data. Further, since variance depends on the range of data
i.e. (tP – to) as shown above therefore, larger value of variance shall reflect
larger range and consequently more uncertainty as revealed in the following
example:
Example 4.1: Time estimates for a particular activity say, excavation in
foundation for a proposed building of 2000 sq m plinth area was given by
PERT–Network 77

three persons as hereunder: Calculate range, variance and expected time

for the time estimates given. Which of the tree persons is more certain
about his time estimates?

Table 4.2
Person to tm tP Range σ= Variance te =
(weeks) (weeks) (weeks) (tP – to) (tP – to) (σ2) (to + 4tm + tp)
6 6
P-1 5 7 10 5 0.83 0.69 7.17
P-2 6 9 12 6 1 1 9
P-3 5 7 9 4 0.67 0.44 7

Variance in the case of P-3 is the least of the three values and highest
in the case of P-2. Thus, P-3 is more certain about his estimates followed by
P-1 and P-2 in that order.
→ Certainty of the estimates, P-3 > P-1 > P-2

4.4.1 Example of three time estimates and expected time for a

project
Example- 4.2: A network having three time estimates for its various
jobs is shown in Fig. 4.5. Find the critical path, variance and expected time
for each activity.

Teo = 12
TEm = 17 Teo = 18
TEp = 22 TEm = 24
6-7-10
3 6 TEp = 32 Teo = 30
TEm = 39 Path-1
Teo = 15 4-5-8
TEp = 51
TEo = 0 7-10-12 TEm = 18 Teo = 24 Teo = 22 Teo = 32
TEm = 0 TEp = 22 Path-2 TEm = 30 TEm = 29 Path-1 TEm = 40 Path-2
TEp = 0 TEp = 35 TEp = 40 TEp = 46
5-7-10 10-11-12 9-12-13 8-10-11
1 2 5 8 9
Teo = 34
Teo = 5 TEm = 39 Path-3
9-10-11 10-11-12 TEp = 45
TEm = 7 8-9-12
TEp = 10
Teo = 30
TEm = 36 Path-4
TEp = 46
Teo = 13 4-9-12
TEm = 16 4 7 Teo = 24
TEp = 22 Teo = 20 TEm = 28 Path-3
TEm = 25 Path-4 TEp = 33
TEp = 34

Fig. 4.5
78 Project Planning and Management with CPM & PERT

In this network, there are four paths along which the entire work can
be completed. These four paths and time taken i.e. to, tm and tp along them
is shown in Table 4.3.

Table 4.3

Path Path route Optimistic Most likely Pessimistic

time to time tm time tp
Path-1 1-2-3-6-8-9 30 39 51
Path-2 1-2-5-8-9 32 40 46
Path-3 1-2-5-7-9 34 39 45
Path-4 1-2-4-7-9 30 36 46

Looking at this table, the maximum time taken for completing the
project shall be:

¾¾ By optimistic time estimate it is 34 days and Path-3 is the longest

route.
¾¾ By most likely time estimate it is 40 days and Path-2 is the longest
route.
¾¾ By pessimistic time estimate it is 51 days and Path-1 is the longest
route.

As discussed earlier, the longest route for completing the project is called
critical path and it consumes the maximum resources. Table 4.3 shows three
critical paths and they are under three different time estimates. Technically,
there may be more than one critical path but they should be under similar
time estimates. This is essentially required for logical planning, monitoring
and control of the project.
In the present case, the scenario is different i.e. three critical paths
under different time estimates. Such a situation, not only create confusion
and misunderstanding but also will lead the decision makers in diverse
directions thus defeating the very purpose of project planning and
management. It is in this context that there is a requirement of a single
time estimate catering for the aforesaid three time estimates (to, tm, tp) as
per their weights to resolve the complexity arising out of such uncertainties.
Therefore, in PERT analysis expected time te is considered which is derived
as per Eqn. 4.1. Expected time te is also known as average time. This
equation is derived from β-curve and forms the basis for estimating the
expected time of a project.
PERT–Network 79

Having been conversant with the three time estimates and necessity of
a single time estimate for arriving at a logical conclusion regarding project
delivery schedule, te values for various activities shall be calculated in
tabular form and there after critical path shall be determined i.e. the path
consuming the maximum time for accomplishing the entire project.

Table 4.4

Path Job to tm tp te Sum of te

values along
the path (Σ te)
Path-1 1-2 5 7 10 7.17
2-3 7 10 12 9.83
3-6 6 7 10 7.33 39.50
6-8 4 5 8 5.33
8-9 8 10 11 9.83
Path-2 1-2 5 7 10 7.17
2-5 10 11 12 11
39.67
5-8 9 12 13 11.67
8-9 8 10 11 9.83
Path-3 1-2 5 7 10 7.17
2-5 10 11 12 11
39.17
5-7 9 10 11 10
7-9 10 11 12 11
Path-4 1-2 5 7 10 7.17
2-4 8 9 12 9.33
36.67
4-7 7 9 12 9.17
7-9 10 11 12 11

A comparison of Table 4.3 and Table 4.4 gives entirely different result.
Critical path from the estimates based on te i.e. expected time values is
Path-2 and it takes 39.67 days for completion of the entire project. Another
important feature of Table 4.4 is the closeness of the Σ te values along the
four paths i.e. Path-1 = 39.50, Path-2 = 39.67, Path-3 = 39.17 and Path-4
= 36.67 days. These values are in sharp contrast to the values obtained in
Table 4.3 which were 51, 40 and 34 days respectively along the paths-1, 2
and 3. This justifies the rationale for deriving te values based on Eqn. 4.1.
80 Project Planning and Management with CPM & PERT

4.5 Pictorial Representation of te and tm

A question always arises in the mind of readers regarding the actual

difference between expected time (te) and most likely time (tm). The
difference is derived from the fact that most likely time is the time estimate
for completion of the job under the most practical situations whereas, the
expected time which is also the average time is the weighted average of the
three time estimates; optimistic, most likely and pessimistic. This will be
discussed both for normal and skewed distribution patterns.
4.5.1 Normal Distribution: If the three time estimates are following a
normal distribution pattern, then expected time shall be equal to most likely
time estimates.

Probability

to tm & te tp

Time duration

Fig. 4.6: Normal distribution curve

Fig. 4.6 shows a Normal distribution curve, where data are identically
spread on either side of the central point. This shows that data between
tm & to and tm & tp are symmetrically placed. Under this condition, value of
expected time or average time te shall be equal to the value of tm as can be
seen from the example given below:
Example 4.3: An activity i–j has three time estimates 10-12-14 days,
i.e. optimistic time-most likely time-pessimistic time in that order. Calculate
the values of average time or expected time for completion of the said
activity. What inference is drawn from this?
PERT–Network 81

Solution: to = 10,   tm = 12,   tp = 14

to + 4tm + tp
Expected time, te =
6
10 + 4 × 12 + 14
=
6
= 12
Thus, in this case average time or expected time ‘te’ is equal to the
value of ‘tm’ i.e. 12 days. Looking at the three time estimates i.e. 10-12-14,
it shows that the values are distributed in a normal distribution pattern
wherein the central value is equally spaced from either of the values on its
left and right.
Inference: If the data are distributed in a normal distribution pattern,
value of te and tm are equal. For such a symmetrical distribution of data and
corresponding curve, the value of te or tm shall be equal to the mean of the
values of to and tp.
4.5.2 Skewed distribution Pattern: Skewed distribution may be either
towards left or right as shown in the Fig. 4.3(b) above. In either of the cases,
te and tm shall be different. β-distribution for skewed data values shall be
clarified by following example:
Example 4.4: Three time estimates for performing an activity a-b are
9-10-15 , i.e. optimistic time-most likely time-pessimistic time in that order.
Calculate the values of average time or expected time for completion of the
said activity.
Solution: to = 9,   tm = 10,   tp = 15
to + 4tm + tp
Expected time, te =
6
9 + 4 × 10 + 15
=
6
= 10.67
Thus, in this case average time or expected time ‘te’ is 10.67 days
whereas, the value of ‘tm’ i.e. 10 days. Looking at the three time estimates
i.e. 9-10-15, it shows that the values are distributed in a skewed distribution
pattern i.e. skewed towards right. The central value is not equally spaced
from either of the values on its left and right. These values are shown in
Fig. 4.7.
82 Project Planning and Management with CPM & PERT

Probability

to = 9 tm = 10 te = 10.67 tp = 15

Time duration

Fig. 4.7: Skewed distribution curve

Example 4.5: Prepare a PERT network for construction of a single

storied building with following events and time estimates. Calculate
expected time for the activities, variance, standard deviation and total time
required for completion of the project.

Table 4.5

S/N Event description to days tm days tp days

1 Lay out commenced          
2 3 4
2 Lay out completed
3 Excavation in foundation completed 5 7 8
4 RCC work in foundation and up to plinth
10 11 14
beam level finished
5 Brick work started           
45 50 56
6 Brick work completed
7 RCC work up to and incl. roof level completed 45 48 51
8 Plastering work completed 15 17 19
9 Services work completed 60 64 70
10 Painting work completed 18 20 25
11 Project completed & handed over 2 4 6
PERT–Network 83

Solution: PERT network is drawn as shown in Fig. 4.8.

45-50-56 15-17-19
5 6 8

dummy
dummy

2-3-4 5-7-8 10-11-14 45-48-51 18-20-25 2-4-6

1 2 3 4 7 10 11

dummy
60-64-70
9

Fig. 4.8: PERT network for a Single Storied Building

Further calculations are as below:

Table 4.6

Path Activity/ to tm tp te (Σ te) Range Standard Variance

Job (tp– to) deviation σ2
σ = (tp– to)
6
01-20 2 3 4 3 2 0.33 0.11
Path-1 02-30 5 7 8 6.83 3 0.5 0.25
1-2-3- 03-40 10 11 14 11.33 4 0.67 0.45
93.66
4-7-10- 04-70 45 48 51 48 6 1 1
11 07-10 18 20 25 20.5 7 1.17 1.36
10-11 2 4 6 4 4 0.67 0.45
1-2 2 3 4 3 2 0.33 0.11
2-3 5 7 8 6.83 3 0.5 0.25
Path-2
3-4 10 11 14 11.33 4 0.67 0.45
1-2-3- 4-5 0 0 0 0 0 0 0
4-5-6- 92.33
5-6 45 50 56 50.17 11 1.83 3.36
8-10-
6-8 15 17 19 17 4 0.67 0.45
11
08-10 0 0 0 0 0 0 0
10-11 2 4 6 4 4 0.67 0.45
1-2 2 3 4 3 2 0.33 0.11
Path-3 2-3 5 7 8 6.83 3 0.5 0.25
1-2-3- 3-9 60 64 70 64.33 78.16 10 1.67 2.77
9-10 09-10 0 0 0 0 0 0 0
10-11 2 4 6 4 4 0.67 0.45
84 Project Planning and Management with CPM & PERT

Activities, 4-5, 8-10 and 9-10 are dummy activities and hence no time
is shown against them.
Total completion time for the project is 93.66 days and it is along the
Path-1.

4.6 PERT and CPM Network for the Same Project

Having drawn a PERT network as above, it is imperative to compare this

network with a CPM network. In fact, many of the details of CPM network
discussed in Chapter 3 are also valid for PERT network. To understand these
similarities, let us take Example 4.5 above and prepare a CPM network for
it. Accordingly, Table 4.7 has been prepared to describe the activities and
their durations and Fig. 4.9 is the CPM network for the said project.

Table 4.7

S/N Activity in progress Activity Duration

Name (days)
1 Lay out of the building a 3
2 Excavation work in foundation b 7
3 RCC work in foundation and up to plinth level c 11
4 RCC work up to roof level d 48
5 Brick work e 50
6 Plastering work f 17
7 Services work g 64
8 Painting work h 20
9 Handing over of project j 4

e f
6 8
50 17
dummy
0
a b c d h j
1 2 3 4 5 9 10
3 7 11 48 20 4

dummy
0
g
7
64

Fig. 4.9: CPM network for a Single Storied Building

PERT–Network 85

The major difference between the PERT and CPM network for a
project as visible from Fig. 4.8 and Fig. 4.9 are as below:

(a) In the PERT network Fig. 4.8, there are 12 arrows (including 3
dummy activities) and 11 nodes whereas, in the CPM network
Fig. 4.9, there are 11 arrows (including 2 dummy activities) and
10 nodes. Both, these networks can be made to look indentical
by slightly adjusting the nodes and activities. Evidently, it is up to
the person drawing the network, as how much similarities can be
brought in these networks for the same project.
(b) Achieving similarities in these networks may be for academic
interest and not for practical consideration as the object of
network analysis is to monitor the project whether based on
PERT or CPM technique.

As a general rule, PERT and CPM network for a project will look much
alike with minor differences. However, different person may not draw exactly
similar network for a project due to their personal experience, priorities and
prevailing circumstances.
Example 4.6: A ‘PERT’ network is shown in Fig. 4.10 below. Put the
number of the events as per Fulkerson’s rule. Calculate expected time for
each activity, range, standard deviation and variance. Find out the total
time required for completing the project. Find out the activities having
maximum and minimum certainty? Also find out the activities having the
normal distribution or skewed distribution.

7-9-10 10-12-15
20 50 80

5-8-10 4-6-8
0-0-0

4-6-7 6-8-11 5-6-7 5-7-8

10 40 60 100 110
7-9-10
7-9-12
0-0-0 6-8-9

30 8-9-11 90
10-14-17
70

Fig. 4.10
Table 4.8
86

Path Activity/ to tm tp te (Σ te) Range Standard Variance

Job (tp- to) deviation σ2
σ = (tp- to)

6
Path-1 10-20 5 8 10 7.83 5 0.83 0.69
10-20-50-80- 20-50 7 9 10 8.83 3 0.50 0.25
100-110 50-80 10 12 15 12.17 41.66 5 0.83 0.69
80-100 4 6 8 6 4 0.67 0.44
100-110 5 7 8 6.83 3 0.50 0.25
Path-2 10-40 4 6 7 5.83 3 0.50 0.25
10-40-60-100- 40-60 6 8 11 8.17 5 0.83 0.69
26.83
110 60-100 5 6 7 6 2 0.33 0.11
100-110 5 7 8 6.83 3 0.50 0.25
Path-3 10-40 4 6 7 5.83 3 0.50 0.25
10-40-60-90- 40-60 6 8 11 8.17 5 0.83 0.69
31.00
110 60-90 7 9 12 9.17 5 0.83 0.69
90-110 6 8 9 7.83 3 0.50 0.25
Path-4 10-30 7 9 10 8.83 3 0.50 0.25
10-30-70-90- 30-70 11 14 17 14 6 1.00 1.00
39.83
110 70-90 8 9 11 9.17 3 0.50 0.25
90-110 6 8 9 7.83 3 0.50 0.25
Project Planning and Management with CPM & PERT
PERT–Network 87

•• Total time required for project completion: Total time

required for completion of the project shall be the maximum of the
time taken along all the three paths. In this case, it is along Path-1
and is equal to 41.66 days.
•• Maximum certainty: Maximum certainty shall be for the activities
having minimum variance (σ2). In the instant case, minimum
variance is 0.11 and the activity having minimum variance value is
60-100. Thus, activity 60-100 has the highest certainty.
•• Minimum certainty: On the similar lines minimum certainty
shall be for the activity having the highest value of variance (σ2).
In this example, activity 30-70 has the highest value of variance i.e.
equal to 1.00. Thus, this activity has the highest uncertainty.
•• Activities with normal distribution: Activity 80-100 has three
time estimates as 4-6-8 which reveal that tm is equally spaced from
to and tp. Therefore, this activity has normal distribution pattern.
On the similar lines, activity 60-100 has 5-6-7 and activity 30-70
has 11-14-17 as three time estimates and their individual tm values
are equally spaced from their respective to and tp values. Therefore,
activities 80-100, 60-100 and 30-70 show normal distribution
pattern.
•• Activities with skewed pattern: All other activities of the
network are not showing to and tp values at equal distance from
their respective tm values. Therefore, those all activities are showing
skewed distribution pattern.

Questions
1. What is the significance of three time estimates? How we arrive at
weighted average of the mean?
2. Define and explain the terms: (i) Most likely time (ii) Mean time and
(iii) Expected time as related to various activities of a project.
(ESE-2002 : 15 marks)
3. Define PERT and discuss its significance. Explain different time
estimates used in PERT. (CS-2015 : 10 marks)
4. What is the difference between average value and expected value?
How these values differ from the most likely value. Draw a β- curve and
show all the three time estimates on it.
5. What is frequency distribution curve? How it differs from probability
distribution curve?
88 Project Planning and Management with CPM & PERT

6. How the spread or dispersion of the data can be better represented?

Give the answer with specific reference to ‘Range’, standard deviation
and variance.
7. Certainty of the time estimates shall be reflected by which measure of
the statistical analysis – range, standard deviation or variance and how?

Problems
1. Draw a network diagram for “Road construction” with following events
and time estimates. Number the events as per Fulkerson’s rule and
derive expected values for the events and total completion time for the
project.

S/N Event description to days tm days tp days

1 Site clearance started    
7 9 10
2 Site clearance completed
3 Level taking work completed 4 5 6
4 Excavation up to formation level 45 50 53
completed
5 Soling work incl. rolling finished 20 24 30
6 WBM work incl. rolling completed 18 22 25
7 Black topping incl. rolling completed 7 8 11
8 Work completed 3 4 5

2. A network diagram is shown in the figure below. Number the events

as per Fulkerson’s rule. Calculate expected time, range, variance and
standard deviation for each activity in a tabular form. What is the total
completion time for the project?

4-5-8 5-8-10

0-0-0 4-7-9
3-4-5

7-8-10 10-11-12 15-17-20

8-10-11 5-6-7
5-6-7

12-13-15 10-12-15 2-3-4

5
Earliest Expected Time (TE) and
Latest Allowable Occurrence
Time

5.1 Introduction

In the previous chapter, we had discussed about time estimates i.e. optimistic
time (to), pessimistic time (tp), most likely time (tm) and expected time (te)
or average time. It may be seen that all these time estimates were for the
activities or job and not for the events. In a simple and linear network,
activities and events simply move from left towards right and has a single
path for accomplishing the entire project. In such a network, determining
the critical path and calculation of the time for accomplishing the project is
simple, easy and straightforward.
A network consists of the activities and events both. Accomplishment
of the event signifies major achievement which may be in terms of the
milestones or set targets. Events do not consume any resources but they
are as important in the network as activities, rather, they complement
each other. As, an event is the starting or finishing point of the activity, it is
important to know about its earliest expected time and latest occurrence
time. These times are denoted by TE and TL respectively and help in
understanding various issues related to network and completion time of the
project.

5.2 Earliest Expected Time

This refers to time when an event can take place at the earliest. Technically,
until all the activities leading to the said event have been completed, the
event cannot be said to have been reached at. Thus, earliest expected time
90 Project Planning and Management with CPM & PERT

for an event shall be the time by which all the activities reaching at the
event have been accomplished.
Example 5.1, A simple network: A network as shown in
Fig. 5.1 is considered wherein te values (in days) have been calculated from
the available three time estimates.

te = 0 te = 7 te = 15.17 te = 27.50
5-7-9 7-8-10 10-12-16
i j k l
teij = 0 jk
te = 8.17
kl
te = 12.33

Fig. 5.1

In this network, there are four events namely i, j, k & l. Expected

times for the activities connecting these events are shown below the activity
arrows. Network starts from event-i. Thus, the earliest event time for event-i
= 0.

•• Expected time for accomplishing the activity i-j is 7 days. The

earliest expected time for event-j shall be 7 days since event-j can
be performed only after completion of the activity i-j.
•• Similarly, expected time for the activity j-k is 8.17 days. Event-k can
take place only after the accomplishment of the activities i-j and j-k.
Thus, the earliest expected time for event-k shall be the sum of the
expected times of the activities i-j & j-k i.e. 7 + 8.17 = 15.17 days.
•• On the similar lines, event-l can take place only after the completion
of the activities along the paths i-j, j-k & k-l. Therefore, the earliest
expected time for event-l shall be = 7 + 8.17 + 12.33 = 27.50 days
•• These earliest expected times are represented by TE and are
shown at the top of the respective events’ bubble. Consecutive TE
values denote a relationship with each other i.e. TE value for the
subsequent event is equal to TE value for its preceding event plus
time taken by their interconnecting activity. This relationship is
expressed by the following equation:
TjE = TiE+ teij     ...(Eqn. 5.1)

However, if the network is complex, and has multiple routes for arriving
at the final event with possibility of more than one critical path, it becomes
a challenging task for the planner and project manager to determine the
critical path and find out the time for completion of the project in totality.
This will be clear from the following example:
Earliest Expected Time (TE) and Latest Allowable Occurrence Time 91

Example 5.2 A complex network: Let us consider a network as shown

in Fig. 5.2 below: Three time estimates for the activities are shown above
the activity arrows whereas expected time for the activities is shown below
the activity arrows.

3
T E = 15 T6E = 22.83
6-8-9
3 36
6
te = 7.83
6-8-10 15-16-17
23
te = 8 3-5-7 68
1
TE=0 T2E = 7 35 te = 16 8
T E = 38.83
te = 5
5-7-9 10-11-14 12-14-17
1 12
2 25
5 58
8
te = 7 te = 11.33 te = 14.17
5-6-8 T5E = 20
78
24
te = 6.17 9-11-12 te = 10.83
11-14-16
T4E = 13.17 4 7
47
te = 13.83 T7E = 27

Fig. 5.2

The figure shows two paths (1-2-3-5 and 1-2-5) entering at event-5
and four paths (1-2-3-6-8, 1-2-3-5-8, 1-2-5-8 and 1-2-4-7-8) at event-8.
Each path may give different values of earliest expected time to event-5 and
event-8, but we cannot have more than one value of earliest expected time
for an event. Therefore, such a situation requires closer look at the network
to arrive at the appropriate value of the earliest expected time (TE) for the
affected events. In the present case, TE values for the events have been
calculated as per the Equation 5.1, TjE = TiE + teij. Accordingly, those values
are derived as below:
T1E = 0
(This is the 1st event and assumed to have value as zero
signifying commencement of the project.)
T2E = T1E + te12 = 0 + 7 = 7 days
T3E = T2E + te23 = 7 + 8 = 15 days
T4E = T2E + te24 = 7 + 6.17 = 13.17 days

Event-5 is reached from two paths and shall have two values of T5E.
Which route shall give correct value of T5E? This is discussed as below:

(i) T5E = T2E + te25 = 7 + 11.33 = 18.33 days (Path 1-2-5) Which one is the
(ii) T5E = T3E + te35 = 15 + 5 = 20 days (Path 1-2-3-5) correct value of T5E?
92 Project Planning and Management with CPM & PERT

Under Para 2.4.2 in Chapter-2, we have discussed that an event

is considered to have occurred when all the activities leading to it are
completed. Therefore, in this case if T5E is taken as 18.33 days, it would
imply that the activity te35 has not been completed or in other words, the
path 1-2-3-5 has not been accomplished.
However, if T5E= 20 days, this signifies that the entire activities along
both the paths (i.e. Path 1-2-3-5 and Path 1-2-5) have been accomplished.
Therefore, higher value out of the both paths shall be assigned to T5E i.e.
20 days.
T6E = T3E + te36 = 15 + 7.83 = 22.83 days
T7E = T4E + te47 = 13.17 + 13.83 = 27 days

Event-8 is reached from four routes. Which route shall govern the
correct value of T8E shall be discussed as hereunder:

(i) Route-1 = 1-2-3-6-8

T8E = T6E + te68 = 22.83 + 16 = 38.83 days
(ii) Route-2 = 1-2-3-5-8
T8E = T5E + te58 = 20 + 14.17 = 34.17 days
Which one is the
(iii) Route-3 = 1-2-5-8 correct value of T8E?
T8E = T5E + te58 = 20 + 14.17 = 34.17 days
(iv) Route-4 = 1-2-4-7-8
T8E = T7E + te78 = 27 + 10.83 = 37.83 days

If T8E is taken as 34.17 days → All the activities along Route-1 and
Route-4 have not been accomplished.
If T8E is taken as 37.83 days → All the activities along Route-1 have not
been accomplished.
If T8E is taken as 38.83 days → All the activities along all the possible
routes reaching event-8 have been accomplished.
Therefore, T8E= 38.83 days. Note that it is the highest of the values
along the four possible routes.
5.2.1 General Rule for Evaluating Earliest Expected Time (TE): With
the discussion and calculations as above we conclude that for a simple
network value of TE for the events shall be derived by the following formula:
TE (successor event) = T
E (predecessor event) + te (activity connecting
the events)
Earliest Expected Time (TE) and Latest Allowable Occurrence Time 93

If predecessor event is ‘i’ and successor event is ‘j’ and they are
connected by an activity i-j, earliest expected time for the successor event
shall be calculated by the Equation 5.1:

i1 tei1 j

tei2 j j
i j i2
ij
te
j i ij
tei3 j j i
T E = Max of (T E + te )
ij

T E = T E + te i3

Earliest expected time Earliest expected time

One activity at one event Multiple activities at one event

Fig. 5.3

TjE = TiE + teij

If there is more than one activity reaching at an event, then the earliest
expected time for the event shall be the maximum of the values of TE out of
all possible paths.
TjE = maximum of (TiE + teij)   ...(Eqn. 5.2)

5.2.2 Earliest Expected Time through Tabular Entry: Whatever

we have discussed above regarding calculation of the earliest expected
time of event can be presented in a tabular form that is easy to evaluate,
understand, interpret and comprehend. Let us take the Example 5.2 above
for tabular entry. We will start from event-1 by keeping it at the top of the
table and finish at event-8 which has been put at the bottom of the table.
Some project manager start from the end by putting the end event at the
top of table and finish at the start event by keeping it at the bottom of the
table. However, the result in either case shall be similar. The table has been
prepared as below:

Table 5.1

Activity (i-j) to tm tp te TjE Remark

Predecessor Successor
Event (i) Event (j)
1 2 5 7 9 7 7
2 3 6 8 10 8 15
2 4 5 6 8 6.17 13.17
94 Project Planning and Management with CPM & PERT

2 5 10 11 14 11.33 18.33 Higher value

3 5 3 5 7 5 20 is T5E

3 6 6 8 9 07.83 22.83
4 7 11 14 16 13.83 27
5 8 12 14 17 14.17 34.17 Higher value
6 8 15 16 17 16 38.83 is

7 8 9 11 12 10.83 37.83 T8E

The network has two significant points i.e. event-5 and event-8. Event-5
can be reached from two paths and preceding event to it are event-2 and
event-3. Higher of the two TE values shall be T5E. This is mentioned in the
‘Remark’ column and higher value is shown in bold under the respective
column.
Similarly, event-8 can be reached from four paths and preceding events
to event-8 are event-5, event-6 and event-7. Reason for three preceding
events from four available paths is the convergence of two paths at event-5.
The highest of the TE values from the three paths shall be T8E. This is
mentioned in the ‘Remark’ column and the highest value is shown in bold
under the respective column.

5.3 Latest Allowable Occurrence Time

This is the second type of time estimate related to the events in a network.
The object of the planner and project manager shall be to complete the
project on the pre-decided time frame. Planning, organizing, coordinating,
monitoring and control of the project revolve around timely completion of
the project within estimated cost and acceptable quality standards. Latest
occurrence time for an event is the time by which the event must occur in
order to keep the project on schedule. It is denoted by TL.
In the simplest terms, if a project is planned to be completed in a
specific time period, say ‘N’ days, but due to various complex ground
conditions, entire team including the client decides that 15 extra days be
given for completing the project. Thus, the project must be completed in (N
+ 15) days. As per the original planning (i.e. when ‘N’ days were planned),
there would been specific dates for accomplishment or occurrence of
various events. However, due to change in schedule to (N + 15) days, a
margin or allowance of 15 days is permissible which implies that some or all
the events may have slippage in their individual occurrence time in such a
way that sum of all those slippages doesn’t exceed 15 days. It will put a cap
Earliest Expected Time (TE) and Latest Allowable Occurrence Time 95

on the completion schedule of the individual event, specifically implying

that the event has to be completed latest by a specific date. This latest time
by which an event must occur in order to keep the project on schedule is
known as latest occurrence time for the event (TL).
Example 5.3, A simple network: To understand it further, let us take
Example 5.1 and Fig. 5.1 above. The figure has been repeated as Fig. 5.4
wherein total completion time of the project is 27.5 days as per the initial
estimates. However, while finalizing the contract, let it be decided that
30 days’ time is permitted for completion of the work. This means that
stipulated date of completion is 30 days from the date of commencement
which is also known as contractual obligation time and denoted by Ts. This
statement has following interpretation:

ti E = 0 tjE = 7 tkE = 15.17 tlE = 27.50

5-7-9 7-8-10 10-12-16
i ij
j k l
jk kl
te = 7 te = 8.17 te = 12.33
tiL = 2.50 j
t L = 9.50 tkL = 17.67 tlL = 30 = Ts

Fig. 5.4

¾¾ The project must be completed after 30 days of commencement.

This means that the last event (event-l) must be completed 30 days
after the start of the project.
1
¾¾ Contractual obligation time is 2 2 days more than the earliest event
time of the last event. This is the margin available for the events
in the network i.e. any one event or more than one event in the
network has the margin to be delayed such that sum of the total
1
delay of all events shall not exceed 2 days.
2
¾¾ Activity k-l takes 12.33 days for completion. This means event-k can
occur latest by 17.67 days (30 – 12.33 days) after commencement
of the work. In other words, event-k cannot occur later than 17.67
days once the work has commenced. Thus, the latest allowable
time for event-k shall be TkL= 17.67 days.
¾¾ Activity j-k takes 8.17 days for completion. Thus, event-k cannot
occur later than 17.33 – 8.17 = 9.50 days after commencement of
the work. This value has been derived as TkL – tejk. Therefore, latest
occurrence time for event-j shall be TjL = 9.50 days.
¾¾ Activity i-j takes 7 days for its completion. Therefore, event-i cannot
occur later than 9.5 – 7 = 2.5 days after commencement of the
96 Project Planning and Management with CPM & PERT

work. This value is equal to TjL – teij. Thus, latest event time for
1
event-i is TiL = 2 days.
2
Thus, in this case as a general rule, we noticed that TiL = TjL – teij.

5.3.1 Practical Significance of Latest Occurrence Time of Event, TL

¾¾ In the above example Fig. 5.4, let us assume that the project starts
as per schedule i.e. activity i-j starts on day ‘zero’. It reveals that
event-i has occurred on day zero. Activity i-j takes 7 days for its
completion if goes as per plan. Thus, earliest event time for event-j
shall be TjE = 0 + 7 = 7 days. Since we have assumed that work
is progressing as planned, there is no delay in the occurrence of
event-j. This implies that although, event-j has latest occurrence
time as 9.50 days, there was no requirement to touch this margin of
2.50 days due to the fact that the said event has been accomplished
on its earliest event time.
¾¾ Further, activity j-k takes 8.17 days for its completion if work goes
as planned. Thus, the earliest event time for event-k shall be TkE
= TjE + 8.17 =7 + 8.17 = 15.17 days. However, there may be
a situation that due to certain ground problems (i.e. shortage of
materials, labour or equipment etc.) there is possibility of delay and
consequently, work of activity j-k cannot go as planned. The question
comes as to how much delay shall be tolerable for occurrence of
the event-k under such situation if the project has to be completed
in 30 days as per contractual obligation time.

Answer to such query is got from the latest occurrence time of the
event. In the instant case, latest occurrence time for event-k is TkL= 17.67
days. Also, the earliest time by which the event-k could have occurred is TkE
= 15.17 days. Therefore, there is a margin of 2.5 days (17.67 – 15.17 days)
by which the event-k can be delayed and that is the tolerable level if the
project has to be completed as per contractual obligation time of 30 days. In
other words, after the occurrence of the event-j, maximum delay that can
be tolerated is 2.5 days.
Similar analysis may be carried out for other activities and events.
It is however, not necessary that only one activity shall have such
possibility of time margin. In fact, the total available time margin may be
distributed among the requisite events in such a manner that sum of the
tolerable time of individual events doesn’t exceed the overall available time
margin.
Earliest Expected Time (TE) and Latest Allowable Occurrence Time 97

0 3 6 9 12 15 18 21 24 27 30

i j k l
TE = 0 TE = 7 T E = 15.17 T E = 27.50
5-7-9 7-8-10 10-12-16
A i j k l
ij jk kl
te = 7 te = 8.17 te = 12.33
i j j j
TL = 0 T L = 9.5 T K = 17.67 T L = 30

B i j k l
ij jk kl
te = 7 te = 8.17 te = 12.33
TiL = 2.5 TjL = 9.5 TjL = 17.67 TlL = 30

C i j k l

TiL = 1 j
TL = 9 TkL = 17.67 TlL = 30

D i j k l

TiL = 0 TjL = 8 TkL = 16.5 TiL = 29

Fig. 5.5

Note: Sum of individual delay = 2.5 days

In this figure vertical dotted lines have been drawn to depict earliest
expected time and latest occurrence time of the events i, j, k & l. Events of
the network may take place in various manners i.e. A, B, C, D etc., but the
guiding principle shall be that none of the events can take place before its
earliest expected time or beyond its latest occurrence time. Also, the sum of
the individual delays cannot be more than 2.5 days.
Example 5.4, A complex network: In the example above we have
dealt with a simple network where there was single TL value for an event.
There was single path emerging from each event hence there was no issue
of conflict due to multiple paths and activities. However, in a network,
where there are more than one path emerging from an event, the situation
becomes different as decision is required to find out the correct value of TL
for the event out of the multiple paths coming to it. Let us take the example
given in Fig. 5.6. (Time values are taken in days)
98 Project Planning and Management with CPM & PERT

4 4
T E = 13 T L = 13
4
4-6-8 4-5-6
5
1
TE=0 2
TE=4 45 T E = 18
24
te = 6 te = 5
3-4-5 34 5
1 2 te = 3
12
te = 4 2-3-4 5
1
2
TL=4 5-7-9 T L = 18
TL=0 5-6-7
35
23
te = 6 te = 7

3
3 3
T E = 10 T L = 10

Fig. 5.6

In this network, there are two events (event-2 and event-3) from where
more than one activity is emerging. Thus, while calculating TL values for
these events, one has to be careful that will be clear as we proceed further.
In this figure, three time estimates are shown above the activity arrows
and expected values are shown below the activity arrows. TE values of the
events are shown near the respective event circles. TE value for the end
event (event-5) is 18 days and for the purpose of calculations and unless
otherwise specified, this value is considered as the latest occurrence time
(T5L) for the end event and that is taken as contractual obligation time.
Thus, T5L= 18 days.
Activity 4-5 takes 5 days (te45 = 5) for its completion, therefore, T4L shall
be = T5L – te45= 13 days from the equation TiL = TjL – teij.
Event-3 is the predecessor event to two events i.e. event-4 and event-5.
Therefore, T3L shall have two values i.e. one by considering path 3-5 and
another one by following path 3-4. Evidently, value of T3L shall be guided by
these both subsequent events and paths as below:
Path 3-5: T3L = T5L – te35 = 18 – 7 = 11 days
Path 3-4: T3L = T4L – te34 = 13 – 3 = 10 days
If T3L is taken as 11 days: This means that if event-5 cannot occur
later than 18 days from the start of the project, then event-3 cannot occur
later than 11 days from the start of the project as activity 3-5 takes 7 days.
If T3L is taken as 10 days: This implies that if event-4 cannot occur
later than13 days from the start of the project, then event-3 cannot occur
later than 10 days from the start of the project as activity 3-4 takes 3 days.
It is important to note that event-4 and event-5 can occur only once the
event-3 has occurred. This also implies that event-3 cannot be stretched
Earliest Expected Time (TE) and Latest Allowable Occurrence Time 99

beyond 10 days. Evidently, smaller of the T3L values derived above shall
fulfill this requirement. Therefore, T3L = 10 days.
Similarly, event-3 and event-4 are the subsequent to event-2. Therefore,
T L shall be paths 2-4 and 2-3 as hereunder:
2

Path 2-4: T2L = T4L – te24 = 13 – 6 = 7 days

Path 3-4: T2L = T3L – te23 = 10 – 6 = 4 days
If T2L is taken as 7 days: This means that if event-4 cannot occur
later than 13 days from the start of the project, then event-2 cannot occur
later than 7 days from the start of the project as activity 2-4 takes 6 days.
If T2L is taken as 4 days: This implies that if event-3 cannot occur
later than10 days from the start of the project, then event-2 cannot occur
later than 4 days from the start of the project as activity 2-3 takes 6 days.
However, event-3 and event-4 can occur only once the event-2
has occurred which implies that event-2 cannot be stretched beyond
4 days. Evidently, smaller of the T2L values derived above shall fulfill this
requirement. Therefore, T2L = 4 days.
To derive T1L, there is no involvement of multiple paths and hence
derived from the simple equation:
T1L = T2L – te12 = 4 – 4 = 0 days
T1L = 0

Pictorial representation of TL Value

T4L = 13
2
TL=7 4
4-5-6
2 4-6-8
te = 6 te = 5
3-4-5 5
1 2
te = 4 2-3-4 5
2 T L = 18
T1L = 0 TL=4 5-6-7 5-7-9
te = 3
te = 6 7
te =

T3L = 10 3 3 3
T L = 11

Fig. 5.7

Fig. 5.7 is the modified version of Fig. 5.6 to derive the value of TL for
event-2 and event-3 which have two TL values.
100 Project Planning and Management with CPM & PERT

Event-3 and its TL value

For Path 3-4, event-3 in firm circle has been shown with T3L= 10.
For Path 3-5, event-3 in dotted circle has been shown with T3L= 11.
T3L = 11 satisfies the path 3-5 but not the path 3-4. If T4L = 13, then
value of T3L = 11 signifies that value of te for activity 3-4 must be equal to 2.
Such changes in the activity durations are not permitted as those are fixed
and firmed up at commencement stage. Thus, T3L= 10.

Event-2 and its TL value

For Path 2-3, event-2 in firm circle has been shown with T2L= 4.
For Path 2-4, event-2 in dotted circle has been shown with T2L= 7.
T2L = 7 satisfies the path 2-4 but not the path 2-3. If T3L = 10, then,
value of T2L = 7 signifies that value of te for activity 2-3 must be equal to 3.
Such changes in the activity durations are not permitted as those are fixed
and firmed up at commencement stage. Thus, T2L= 4.
5.3.2 Guiding Principle to Derive Latest Occurrence Time for an
Event (TL value) When There are Multiple Paths Emerging out of
it: With the above example and analysis, one can derive the value of TL for
an event having more than one path emerging out of it. If the predecessor
event is ‘i’ and ‘j’ is the successor event and ‘teij’ is the expected time for
activity i-j, then latest occurrence time for event ‘i’ shall be derived from the
following equation:
TiL = Minimum of (TjL – teij)
Example 5.5: In the network; Fig. 5.8, values of te are shown below the
activity arrows. Numbering of the events has been done as per Fulkerson’s
rule.
Earliest Expected Time (TE) and Latest Allowable Occurrence Time 101

(T2L = 8) (T5L = 13)

4-5-6
2 5 2-3-4
te = 5 8
(T L = 16)
3-4-5 te = 3
te = 4 8
7-8-9 4-5-6
1 te = 8 0-0-0 (T10E = 21)
te = 5
2-3-4 te = 0
1
(T L = 0) 10
te = 3 2-3-4 6
3
3
te = 3
(T L = 3) (T6L = 10) 4-6-8
3-5-7 (T10L=21=Ts)
te = 6
3-4-5 te = 5
te = 4
9
2-4-6
(T9L = 16)
4 3-5-7 te = 4
(T L = 7) 4 7
te = 5
(T7L = 12)

Fig. 5.8

With the given te values, earliest expected time of the events shall be
calculated. However, since our focus is on calculating TL values, earliest
expected time of the end event only has been shown in the network i.e.
T10E = 21. Stipulated time or the contractual obligation time has not been
mentioned in this case, therefore, under such situation, earliest expected
time of the end event is considered as the latest occurrence time for the
end event i.e. T10L= 21= Ts=T10E. With this we will derive TL values for
different events of this network. Wherever, there is more than one activity
emerging out from an event, latest event time shall be calculated by the
following equation:
TiL = Minimum of (TjL – teij)
For event-9
T9L= T10L – te910 = 21 – 5 = 16
For event-8
T8L= T10L – te810 = 21 – 5 = 16
For event-7
T7L= T9L – te79 = 16 – 4 = 12

For event-6, there are two routes; Path 6-8 & 6-9
102 Project Planning and Management with CPM & PERT

Path 6-8; T6L = T8L – te68 = 16 – 0 = 16 Minimum of the

Path 6-9; T = T – t
6 9 69
= 16 – 6 = 10 values shall be T6L
L L e

Therefore, T6L = 10

For event-5
T5L= T8L – te58 = 16 – 3 = 13
For event-4
T4L= T7L – te47 = 12 – 5 = 7

For event-3, there are three routes: Path 3-4, 3-5 & 3-6
Path 3-4; T3L = T4L – te34 = 7 – 4 = 3
Minimum of the
Path 3-5; T3L = T5L – te35 = 13 – 8 = 5
values shall be T3L
Path 3-6; T3L = T6L – te36 = 10 – 3 = 7

Therefore, T3L = 3
For event-2
T2L= T5L – te25 = 13 – 5 = 8

For event-1, there are two routes: Path 1-2 & 1-3
Path 1-2; T1L = T2L – te12 = 8 – 4 = 4 Minimum of the
Path 1-3; T L = T L – te
1 3 13
= 3 – 3 = 0 values shall be T1L

Therefore, T1L = 0

5.4 L atest Allowable Occurrence time through Tabular Entry

In the example above, each event had to be tackled individually to calculate

the TL values for the events. This exercise can be performed in a tabular
form wherein the results are available in one go. This has been done in
Table 5-2 for this example:
Earliest Expected Time (TE) and Latest Allowable Occurrence Time 103

Table 5.2

Activity (i-j) toij tmij tpij teij TjE@ TjE TiL TjL
Suc- Prede-
cessor cessor
Event (j) Event (i)
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10)
10 9 3 5 7 5 21 21 16 21
10 8 4 5 6 5 19 21 16 21
9 7 2 4 6 4 16 16 12 16
9 6 4 6 8 6 12 16 10 16
8 6 0 0 0 0 6 14 16 16
8 5 2 3 4 3 14 14 13 16
7 4 3 5 7 5 12 12 7 12
6 3 2 3 4 3 6 6 7* 10
5 3 7 8 9 8 11 11 5* 13
5 2 4 5 6 5 9 11 8 13
4 3 3 4 5 4 7 7 3* 7
3 1 2 3 4 3 3 3 0 3
2 1 3 4 5 4 4 4 4 8

Note: TjE@ represents Earliest Expected Time of the event from each path
according to the rule.
TjE shows the appropriate value for Earliest Expected Time and derived from
the equation TjE = Maximum of (TiE + teij)
For easy understanding, entry for column (7) i.e. TjE@ has been
done from the bottom of the table. For any event which has more than
one predecessor event, the highest of the values has been considered
and shown in bold numbers. For example, event-5 is reached from two
predecessor events i.e. event-2 and event-3. From event-2, value of
T5E = 9, whereas, from event-3 we get T5E = 11. The maximum of them is
11 that is shown in bold letters.
To calculate TiL values i.e. column (9), we proceed from the top of the
table. As stipulated obligation time Ts in this case is 21 days, so, the latest
occurrence time for the event-9 shall be T9L = 21 – 5 = 16. Similarly, T8L =
21 – 5 = 16. (Note – time duration of activity 8-10 and 9-10 is 5 days each).
It is worth noting that in the tabular form, the entries under TiL refer to
predecessor event and calculation for the same is governed by the following
equation:
104 Project Planning and Management with CPM & PERT

TiL = Minimum of (TjL – teij)

In the network under column (9), this rule can be checked for activities,
6-8 and 6-9. Two values of T6L are 10 and 16.The minimum value is 10 and
shown in bold numbers meaning that appropriate value of T6L is 10. The
same has been reflected in the network.
Similarly, activities 3-4, 3-5 and 3-6 show three values of T3L i.e. 3, 5
and 7 respectively (marked with *). The lowest value being 3 shall be the
appropriate value of T3L and hence shown in bold numbers in the table and
reflected in the network.
Column (10) shows the value of TjL is the rearrangement of the entries
of column (9). This is the sum of column (9) and column (6). This is
essentially required to bring TiL and TjL in the same row.

(T2E = 4) (T5E = 11)

2 5
te = 5
2 5
(T8E = 14)
(T L = 8) (T L = 13) t = 3
e
(T1E = 0) te = 4 8
8
te = 8 (T L = 16)
1
(T10E = 21)
1 (T3E = 3) te = 0 te valu
(T L = 0)
te = 3 10
3 6
te = 3
(T3L = 3) (T6L = 10) (T10L=21=Ts)
te = 6 (T9E = 16)
te = 5
te = 4
9
4
(T E = 7) (T7E = 12) (T9L = 16)
4 7 te = 4
te = 5
7
4
(T L = 7) (T L = 12)

Fig. 5.9

Fig. 5.9 has been derived from Fig. 5.8 with the difference that
it shows both TE and TL values of the events. Three time estimates over
the arrows have been deliberately removed and only te i.e. expected time
value as derived from the three time estimates has been shown. This is
done to make the network diagram easily readable and understandable.
It may be seen that the results derived in Table 5.2 are reflected in
Fig. 5.9.
Earliest Expected Time (TE) and Latest Allowable Occurrence Time 105

From Table 5.2, it may be seen that wherever, there is more than one
value for TE, they have been covered through a bracket. The highest of the
values has been considered as TE and the same has been marked in bold.
Similarly, for TL, whenever, there is more than one value, all those
have been covered through a bracket and the lowest of the values has
been considered as TL and marked in bold. However, for event-3 there are
three values of TL i.e. 7, 5 & 3 but as all these three values could not be
accommodated one after the other in a sequence, thus could not be covered
through a bracket, and therefore, these values are marked with * and the
lowest value is shown in bold with * mark.

5.5 Forward Pass and Backward Pass

Forward pass is a technique to move forward through network diagram to

determine project duration and finding the critical path or free float of the
project. In this technique all calculations are performed while moving in the
network diagram from left towards right. Taking a look at the calculations of
earliest expected time as done in Example 5.2 above, it may be seen that all
calculations have been carried out from left to right. The methodology was
to start from the initial event and end with the last event. The term forward
pass refers specifically to the essential and critical project management
component in which the PM and his team attempt to determine the early
start and early finish dates for all the uncompleted segments of work for
all network activities. Determination of the early start and early finish
dates allows for the earliest possible allocation of the resources that may be
needed for completion of the project and the activities contained therein.
Backward pass on the other hand represents moving backward to
calculate late start or to find if there is any slack in the activity. In Example
5.5 above, while calculating the latest occurrence time for an event, we have
moved in the reverse direction i.e. from right to left. The methodology was to
start from the end event and end with the initial event. With backward pass
method, latest finish and latest start time for the events are easily calculated
which gives requisite information to the PM and his team members as up
to what time duration an event can be delayed without causing any delay in
the overall completion time of the project.
106 Project Planning and Management with CPM & PERT

Questions
1. Is it possible to analyze a network in totality by following either forward
pass or backward pass method? How?
2. Briefly answer the following:
(i) How can an existing bar chart be modified to depict the project
progress made?
(ii) Differentiate between the terms ‘Activity’ and ‘Dummy’.
(iii) Differentiate between ‘Forward Planning’ and ‘Backward Planning’
for network construction.
(iv) Differentiate between ‘Optimistic time estimate’ and ‘Pessimistic
time estimate. (ESE- 2017 : 5 x 4 = 20 marks)

Problems
1. Information on the activities required for a medium size Civil
Engineering project is as follows:
Name of A B C D E F G H I J K
Activity
Node No. 1-2 1-3 1-4 2-5 3-5 3-6 3-7 4-6 5-7 6-8 7-8
Duration in 02 07 08 03 06 10 04 06 02 05 06
(months)
Draw the network and calculate the followings:
(i) Earliest and latest event time.
(ii) Earliest and latest start time
(iii) Earliest and latest finish time.
(iv) Critical path (ESE-2009 : 20 marks)
2. The three time estimates for activities of a network are indicated as
below. Number the events of the network and Calculate
(i) The average or expected time te and variance for each activity.
(ii) Earliest expected time and latest occurrence time for each event .
(iii) Make the entries in a tabular form.
Earliest Expected Time (TE) and Latest Allowable Occurrence Time 107

3-5-8

4-6-9
2-4-5 1-2-3
0-0-0
2-3-4
6-8-10 3-4-5

2-4-6
5-7-9 2-3-4
0-0-0

3-4-7
3-4-6
2-4-6
6
Slack Value, Critical Path and
Probability of Completion

6.1 Introduction

The idea behind a network analysis is to have a systematic flow of events and
activities duly maintaining their interdependence and interrelationships
in a logical manner in order to complete the given work within stipulated
time period. To achieve this, it is necessary to identify the critical path
for the network. Critical path in the PERT network is identified through
slack values of the events and therefore, before coming to critical path, it is
necessary to understand slack value and procedure for its calculation.

6.2 Slack

In Chapter-5, we have discussed two time estimates for an event in a PERT

network; (i) Earliest expected time denoted as TE and (ii) Latest occurrence
time denoted as TL. It was also noticed that for certain events TE and TL are
equal whereas for others they are not equal and this very fact indicates
presence of some specific entity in the network. If TE and TL are equal, it
signifies that there is no margin/time/allowance available to the events to
be delayed. However, if TE and TL are not equal, it indicates that certain
margin/time/allowance is available for the occurrence of the events. This
difference between TE and TL values for an event is called slack time for the
event and denoted by ‘τ’ or ‘τs’ or ‘s’.
Slack Value, Critical Path and Probability of Completion 109

E
i i
TE TE

i ij
j
te
TiL TiL

Fig. 6.1

For event-i,  slack value ‘s’ = τis = TiL – TiE

For event-j,  slack value ‘s’ = τjs = TjL – TjE
Let us examine slack time through an example shown in Fig. 6.2 (Time
in days):
Example 6.1

TE = 7

30
TL = 10
te = 3 te = 4 TE = 14
TE = 0 TE = 4 TE = 17

10 20 50 60
te = 4 te = 10 te = 3
TL = 0 TL = 4 TL = 14 TL = 17

te = 6 TE = 10
te = 5
40
TL = 12

Fig. 6.2

To calculate slack time for the events, it is imperative to first derive the
earliest expected time (TE) and latest occurrence time (TL) of each event
in the network.
Forward Pass Method:
110

Table 6.1

Activity (i-j) te TjE TjE TjL TjL Slack

Predecessor Successor (3) from for event from for event Ԏjs
event (i) event (j) individual individual (8)
path path
(1) (2) (4) (5) (6) (7) Col(7) – Col(5)
10 20 04 04 04 04 04 0
20 30 03 07 07 10 10 3
20 40 06 10 10 12 12 2
20 50 10 14 14
14 14 0
30 50 04 11 14
40 60 05 15 17
17 17 0
50 60 03 17 17
Project Planning and Management with CPM & PERT
Backward Pass Method:

Table 6.2

Activity (i-j) te TjE TjE TjL TjL Slack

Successor Predecessor from for event from for event Ԏjs
event (j) event (i) individual individual (8)
path path (7)
(1) (2) (3) (4) (5) (6) Col(7)– Col(5)
60 50 3 17 17
17 17 0
60 40 5 15 17
50 30 4 11 14
14 14 0
50 20 10 14 14
40 20 6 10 10 12 12 2
30 20 3 7 07 10 10 3
20 10 4 4 04 04 04 0
Slack Value, Critical Path and Probability of Completion
111
112 Project Planning and Management with CPM & PERT

Tables 6.1 and 6.2 show slack time for event-30 as 3 days and for
event-40 as 2 days. This signifies that there is 3 days’ play/margin/space
available for the event-30. Similarly, for event-40, there is a play/margin/
space of 2 days.
These both slack values may be understood by Fig. 6.3:

TE = 7 TL = 10

30 30
te = 3 TE = 4

Slack = 3 days
TE = 0 TE = 4 TE = 17
TE = 14
10 20 50 60
te = 4 te = 10 te = 3
TL = 0 TL = 4 TL = 14
TL = 17
TE = 10 TL = 12

40 40
te = 6 te = 5

Time in days Slack = 2 days

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

Fig. 6.3: Time-scale version of Network

From Fig. 6.3, one can derive two interpretations from the slack values
so achieved:

(i) Earliest expected time for event-30 is 7 days. However, even if this
event occurs on completion of 10th day (latest occurrence time), the
overall schedule completion time of the project shall not change.
(ii) Earliest expected time for event-40 is 10 days. However, even if this
event occurs on completion of 12 days (latest occurrence time),
overall scheduled completion time of the project shall not change.
These interpretations can also be understood as below:
(a) Once the event-30 has occurred at its earliest expected time,
activity 30-50 can be delayed by 3 days.
(b) Once the event-40 has occurred at its earliest expected time,
activity 40-60 can be delayed by 2 days.
Slack Value, Critical Path and Probability of Completion 113

Slack values of the events have been shown through a dark arrow
The crux is that slack value of an event is the free time available within
which the event occurrence time or its subsequent activity’s time can be
varied without affecting the total completion time of the project.
While drawing the time scale version of a network, as far as possible,
efforts must be made to ensure that critical activities are placed in one line.
In this case, events 10, 20, 50 and 60 have slack value = 0 as TE and TL values
are equal for the individual event. These are therefore critical activities and
placed in one line for easy understanding and better appreciation.

6.3 Critical Path

Critical path is the route that takes the maximum time for completion of
the project. Evidently, it is the longest route in the network diagram for
successful implementation of the project. Ideally, the events falling in the
critical path must have zero slack values. However, if permitting slack to
critical events is unavoidable, then it should be the minimum along the
critical path.
In the network shown in Fig. 6.2 the entire project can be accomplished
through three paths:

Table 6.3

Path Path Total time Slack Remark

description (days)
Path-1 10-20-30-50-60 14 3 days for event-30 -
Nil for other events
Path-2 10-20-50-60 17 Nil for all events Critical
Path
Path-3 10-20-40-60 15 2 days for event-40 -
Nil for other events

This table shows Path-2 as the longest path and events along this path
have zero slack values. These events having zero slack values are termed as
critical events and the path that is the longest and has critical events in it is
called as critical path. Thus, Path-2 is the critical path for this network and
has been shown with thick dark line.
114 Project Planning and Management with CPM & PERT

TE = 7

30

TL = 10
te = 3 te = 4
TE = 0 TE = 4 TE = 14 TE = 17

10 20 50 60
te = 4 te = 10 te = 3
TL = 0 TL = 4 TL = 14 TL = 17

te = 6 TE = 10
te = 5
40

TL = 12

Fig. 6.4

6.4 Network with more than One Critical Path

In general, there is only one critical path in a network. However, sometimes,
in a large network, there may be more than one critical path for the project.
In some networks, although at the initial stage, there may be only one
critical path, but during execution stage of the project, because of certain re-
scheduling on account of the ground situations, more than one critical path
may be formed. The fundamental requirement for a critical path however,
is that slack of the events along this path has to be zero or minimum and
it must be the longest route for accomplishment of the entire project in
totality.
In the network Fig. 6.2, if te for activity 40-60 is changed to 7 days
from the existing 5 days, we get network as shown in Fig. 6.5. In
this, TL value of event-40 has changed to TL=10, which earlier was
TL=12. With this, there are two critical paths as shown in Fig. 6.5 and
Table 6.4.

TE = 7
30

TL = 10
te = 4
TE = 0 te = 3 TE = 14
TE = 4 TE = 17

10 20 50 60
te = 4 te = 10 te = 3
TL = 0 TL = 4 TL = 14 TL = 17

te = 6 TE = 10
te = 5
40

TL = 10

Fig. 6.5
Slack Value, Critical Path and Probability of Completion 115

Table 6.4

Path Path Total time Slack Remark

description (days)
Path-1 10-20-30-50-60 14 3 days for event-30 -
Nil for other events
Path-2 10-20-50-60 17 Nil for all events Critical path
Path-3 10-20-40-60 17 Nil for all events Critical path

6.5 Critical Path through Examples

To get familiar with critical path, certain more examples will be taken.
Example 6.2: For the network shown in Fig. 6.6 below, find the slack
values for events and critical path for the network.

TE = 6
TE = 2
40
20 te = 4
TL = 9
S=3
TL = 3 te = 9
S=1 te = 5
TE = 0 TE = 14 TE = 18
te = 2
10 te = 3 50 60
te = 4
TL = 0 TL = 14 TL = 18
S=0 S=0 S=0
TE = 6 te = 8
te = 6
te = 10
30
TL = 6
S=0

Fig. 6.6
Table 6.5
116

Activity (i-j) te TjE TjE TjL TjL Slack

Successor Predecessor from for event from for Ԏjs
event (j) event (i) individual individual event (8)
path path
(1) (2) (3) (4) (5) (6) (7) Col(7) – Col(5)
60 50 04 18 18 18 0
60 40 09 15 18 18
60 30 10 16 18
50 30 08 14 14 14 0
14
50 20 05 07 14
40 20 04 06 06 09 09 3
30 20 03 05 06 06 0
06
30 10 06 06 06
20 10 02 02 02 03 03 1
Project Planning and Management with CPM & PERT
Slack Value, Critical Path and Probability of Completion 117

Events along the Path 10-30-50-60 have zero slack values, thus, those
are critical events. Also, this path is the longest path to complete the project
and thus, it is critical path. It may be noted that although the events along
the path 10-30-60 also have zero slack values, but this is not the longest
path, and thus, it is not the critical path. Table 6.6 shows various paths and
critical path for this network.

Table 6.6

Path Path Total time Slack Remark

description (days)
Path-1 10-20-40-60 15 1 day for event-20
3 days for event-40 -
Nil for other events
Path-2 10-20-50-60 11 1 day for event-20
-
Nil for other events
Path-3 10-20-30-50-60 17 1 day for event-20
-
Nil for other events
Path-4 10-30-50-60 18 Nil for all events Critical Path
Path-5 10-30-60 16 Nil for all events -

Example 6.3: An Overhead RCC tank and pump house building is to

be constructed with following events. Prepare a PERT network. What is the
earliest expected time for completion? Show the critical path.

Table 6.7

Event Event description (te) in

weeks
10 Layout commenced 0
20 Layout completed 1
30 Excavation finished 2
40 RCC work in foundation (raft) and up to 12
bottom ring beam completed
50 Pump house building completed 9
60 RCC of tank portion up to top dome 10
completed
70 Pumps installed 2 Fig. 6.7(a):
80 Plastering completed 3 Overhead RCC Tank

90 Testing of pumps & tank completed 1

100 Painting work completed 3
110 Site cleared & Project completed 1
118 Project Planning and Management with CPM & PERT

Solution:

TE = 24 TE = 26 TE = 27
S=4 S=4 S=4
50 70 90

TL = 28 TL = 30 TL = 31

TE = 0 TE = 1 TE = 3 TE = 15 TE = 25 TE = 28 TE = 31 TE = 32

10 20 30 40 60 80 100 110
1 2 12 10 3 3 1
TL = 0 TL = 1 TL = 3 TL = 15 TL = 25 TL = 28 TL = 31 TL = 32
S=0 S=0 S=0 S=0 S=0 S=0 S=0 S=0

Fig. 6.7(b): PERT network for Overhead RCC Tanks construction

In Fig. 6.7(b), there are two paths (i) 10-20-30-40-60-80-100-110 and

(ii) 10-20-30-40-50-70-90-100-110. Slack time for the events 50, 70 & 90 is
4 weeks each whereas, for all other events slack time is zero. Thus, events
10, 20, 30, 40, 60, 80, 100 and 110 are critical events. Earliest expected
time for completion of the project is 32 weeks. Critical path is Path (i) and
shown in thick lines.

6.6 Semi- critical or Sub-critical Path:

There is no limit to the number of critical paths in a network. The longest

path in the network is critical path. The paths other than the longest one are
called sub-critical or semi-critical paths. These two deserve attention of the
management in network analysis. It is advisable to meticulously examine all
possible critical and sub-critical path(s) in the network. The reason is quite
simple. If critical path is shortened for any reason, sub-critical path(s) may
become equal to it and thus become critical path(s). Similarly, if there is
delay in the sub-critical path, it may become critical path.
Example 6.4: From the network diagram shown below in Fig. 6.8,
find out the critical path and sub-critical path(s), if the stipulated time of
completion is 21 days. ‘s’ denotes slack value.
Slack Value, Critical Path and Probability of Completion 119

TE = 4
TL = 4 TE = 10
S=0 2 6 TL = 10
te = 6 S=0
TE = 14
TL = 13 te = 3
te = 4
TE = 0 TE = 11 S=1
TL = 1 1 TL = 10 5 7 9
S=1 S=1 te =3 te =6
TE = 22
te = 3 TL = 21
te = 6 te = 2 te = 5 S=1

TE = 5 3 4 8 TE = 17
TL = 4 te = 3 te = 6
TL = 16
S=1 TE = 8
S=1
TL = 8
S=0

Fig. 6.8

Solution: In this network, values of TE, TL and slack (s) have been
shown against each event.
From the definition, path joining the events having minimum slack
values that corresponds to the maximum time for completion shall be the
critical path for the network. In this case minimum slack value is (–)1 and
corresponds to the events 1, 3, 5, 7, 8 and 9. Therefore, path 1-3-5-7-8-9 is
the critical path.
Next minimum slack value is zero and corresponds to events 2, 4 and
6. Therefore, paths passing through these events shall be sub-critical or
semi-critical. Accordingly, paths 1-2-6-7 and 3-4-5 shall be sub-critical
or semi-critical path(s). For identification, sub-critical path(s) have been
shown with one firm and one dotted line.

6.7 Significance of Negative Slack Value and

Super–critical Events

While defining the critical path for a network, minimum slack value for the
events is the focus of attention. One may come across negative slack values
for certain events (slack < 0) as in Fig. 6.8 above. In simple terms, negative
slack value of an event indicates TL< TE. This reveals that the said event is
behind the schedule by the time period equal to its slack value. Any further
delay in the said event(s) will cause more delay in project delivery time.
120 Project Planning and Management with CPM & PERT

Therefore, such events need special attention for timely implementation of

the project. Accordingly, these events are called super critical events.

6.8 Difference between CPM & PERT Analysis

CPM and PERT analysis are two closely related operation and research
techniques that make heavy use of networks to help plan and display the
coordination of all the activities. They also normally use a software package
to deal with all the data needed to develop schedule information and then
to monitor the progress of the project. The original version of PERT and
CPM had some important differences. However, they also had a great deal
in common, and the two techniques have gradually merged further over
the years. In fact, today’s software packages often include all the important
options from both original versions. Consequently, practitioners now
commonly use the two names interchangeably, or combine them into the
singly acronym PERT/CPM. Looking at the basic concepts of PERT and
CPM, they differ mainly on the following points:

(i) In CPM, time estimates for completion of activities are with fair
degree of accuracy, while in PERT system, time estimates are not
so accurate and finite.
(ii) In CPM, cost optimization is given prime importance. The time
duration for completion depends on this cost optimization.
The cost is not directly proportional to time, rather the cost is
minimum corresponding to a certain optimum time duration
and cost increases if the time duration is either increased or
decreased.
On the other hand, in PERT system, it is assumed that cost varies
directly with time. Attention is therefore paid to minimize the
time so that minimum cost is achieved.
Thus, in CPM, cost is direct controlling factor whereas, in PERT,
time is controlling factor.
(iii) Critical path in CPM plays an important role in planning and
scheduling. A critical path, time wise is the longest path in
the network. A critical path is the one passing through critical
activities which is determined on the basis of minimum float for
each activity.

Critical path in PERT is the path that joins the critical events,
which is determined on the basis of slack value at each event.
Slack Value, Critical Path and Probability of Completion 121

In other words, in CPM, critical path is determined on activity-

oriented float philosophy whereas, in PERT system, critical path
is determined on the event-oriented slack philosophy.

6.9 Probability of Completion on Scheduled Date

We have so far discussed that CPM is a deterministic model, whereas,

PERT is a probabilistic model. The genesis of three time estimates i.e.
optimistic, pessimistic and most probabilistic in PERT analysis takes its
roots to this probability aspect that is an integral part of PERT. Technically,
one cannot give a firm date for completion of a project due to large number
of uncertainties, unpredictability and contradictions involved in the going of
a project. Therefore, it is necessary to know the probability of achieving the
completion date of a project through PERT analysis.
In Chapter-4, we have discussed the expected time also known as
average time (te) for an activity (i-j) is calculated by the following equation:

to + 4tm + tp
te =
6

This equation is based on Beta (β) distribution curve that is assumed

for each activity. The average time indicates that there is fifty-fifty chance
of getting that job (i-j) done within that time period te. Thus, te divides the
curve plotted between expected time (X-axis) and probability function
(Y-axis) into two equal halves as shown in Fig. 6.9. This means that 50%
area falls between te & to and 50% between te & tp. Since, te divides the area
into two equal halves i.e. 50% probability, therefore, this can be shown as
the area covered by the curve PQR divided by the area of curve PQT as
below:

area under PQR

p= 50%
area under PQT
Similarly, for any other value of time, say ‘X’ under β-distribution
curve, the probability of completing the activity i-j shall be equal to the area
covered under PQS divided by area covered under PQT.

area under PQS

p=
area under PQT
122 Project Planning and Management with CPM & PERT

Q
R

Probability
function
S

P T

to te X
Time elapsed

Fig. 6.9: Probability function for an Activity

It is important to note that β-distribution is considered for each activity

and not for the entire project.
For a project consisting of several activities, it is assumed that it will
have a normal distribution pattern in totality, i.e. start to finish. As the
project is being considered in totality, we take TE value i.e. earliest expected
time of the project as the mean value in the normal distribution curve as
shown in Fig. 6.10 and this value coincides with the modal value.

Probability
function
S

P T

TE TS

Modal value
Time elapsed

Fig. 6.10: Probability function for the entire Project (Normal distribution pattern)
Slack Value, Critical Path and Probability of Completion 123

In this normal distribution curve also, the probability of completing

the project within its earliest expected time, TE is 50% i.e. 1/2, that is
represented by the following equation:
area under PQ 1
p=
area under PQT 2
In the same manner, if the stipulated time of completion is TS which
is meeting at point ‘S’ in Fig. 6.10, then probability of completion of the
project within this time (TS) shall be derived as below:

area under PQS

p=
area under PQT
Similarly, probability of completion of the project at any other point of
time shall be calculated by the ratio of the area covered up to the specified
time and total area covered by the entire curve.
6.9.1 Reducing the Random Curve of a Network to a Normalized
Curve: We have discussed above that in general, a project consisting of
several activities will have a normal distribution pattern. Therefore, to get
the probability of completing a project within a specific time, it is necessary
to reduce the random curve obtained from a network to a normalized form.
Standardized normal curve has:

¾¾ Area equal to unity

¾¾ Standard deviation equal to 1
¾¾ Symmetrical distribution about the mean value of TE

With this, characteristics of normal curve can easily be used to the

available data to arrive at the probability of project completion. To simplify
it, we will take a normal distribution curve, which is also referred as bell-
shaped distribution due to its bell like shape. It is taken as function of
standard deviation as shown in Fig. 6.11. It can be seen that the curve is
symmetrical about the point x = λ which is mean of the distribution.
124 Project Planning and Management with CPM & PERT

Probability
function

-3 -2 - + +2 +3

Time duration

Fig. 6.11

In this graph, λ and σ are parameters such that σ > 0 and λ lies between
+∞ to –∞. To have better appreciation of this curve, we may assume λ = 0
i.e., this denotes central point and values on its right side shall be +σ, + 2σ,
+ 3σ whereas on its left side values will be –σ, –2σ, –3σ respectively.
Having established this distribution of the available data, the task
becomes simpler. In Fig. 6.10, TE corresponds to the mean value and area
covered up to this value is 50% of the total area under PQT. When this Fig.
6.10 is superimposed over Fig. 6.11 i.e. normalized distribution, point ‘S’
may correspond to σ (assuming λ = 0). Thus, ‘S’ is at a distance of σ from
the mean value TE. These distances on either sides of the mean value are
taken in multiples of σ value for calculating the probability of completion of
the project by a pre-set date.
Table 6.8 gives the values of probability corresponding to normal
deviate in terms of multiple of σ and this is used to arrive at the probability
of completion of a project by stipulated time TS.

Table 6.8: PERT Probability Table

(Normal Distribution Function)

Normal deviate Probability Normal deviate Probability

(+) (%) (+) (%)
0 50.0 0 50.0
–0.1 46.0 +0.1 54.0
–0.2 42.1 +0.2 57.9
Slack Value, Critical Path and Probability of Completion 125

–0.3 38.2 +0.3 61.8

–0.4 34.5 +0.4 65.5
–0.5 30.8 +0.5 69.2
–0.6 27.4 +0.6 72.6
–0.7 24.2 +0.7 75.8
–0.8 21.2 +0.8 78.8
–0.9 18.4 +0.9 81.6
–1.0 15.9 +1.0 84.1
–1.1 13.6 +1.1 86.4
–1.2 11.5 +1.2 88.5
–1.3 9.7 +1.3 90.3
–1.4 8.1 +1.4 91.9
–1.5 6.7 +1.5 93.3
–1.6 5.5 +1.6 94.5
–1.7 4.5 +1.7 95.5
–1.8 3.6 +1.8 96.4
–1.9 2.9 +1.9 97.1
–2.0 2.3 +2.0 97.7
–2.1 1.8 +2.1 98.2
–2.2 1.4 +2.2 98.6
–2.3 1.1 +2.3 98.9
–2.4 0.8 +2.4 99.2
–2.5 0.6 +2.5 99.4
–2.6 0.5 +2.6 99.5
–2.7 0.3 +2.7 99.7
–2.8 0.3 +2.8 99.7
–2.9 0.2 +2.9 99.8
–3.0 0.1 +3.0 99.9

6.9.2 A
pplication of PERT Proability Table to Network through
Examples
Example 6.5: From the following network diagram, calculate the
probability of completing the project in 29 days.
126 Project Planning and Management with CPM & PERT

TE = 17 TE = 20

5 6
2-3-4
TL = 17 TL = 20
8-9-10
4-5-6 2-4-6
TE = 0 TE = 6 TE = 12 TE = 24 TE = 29

1 2 4 8 9
3-6-9 5-6-7 8-10-12 2-3-4
TL = 0 TL = 6 TL = 12 TL = 26 TL = 29

3-4-5 0-0-0
4-5-6
TE = 10 TE = 18

3 7
7-8-9
TL = 13 TL = 21

Fig. 6.12

Critical path is 1-2-4-5-6-9. Standard deviation of the activities along

the critical path is to be calculated to get the variance. This is done so,
since for the project under consideration, critical path shall be considered
to represent the project in totality.
From Chapter-4, variance = σ2
2
 tp − to 
σ == 
2

 6 
Table 6.9
Activity to tp σ2
1-2 3 9 1
2-4 5 7 0.11
4-5 4 6 0.11
5-6 2 4 0.11
6-9 8 10 0.11
Σ = 1.44

σ2 = 1.44
σ for the network = √1.44 = 1.2
Value of TE for the network is 29 days and scheduled completion time is
also taken as TS = 29 days. In this case, TS – TE = 0
TS – TE
Thus, normal deviate ‘z’ = =0
σ
Slack Value, Critical Path and Probability of Completion 127

It implies that earliest expected time and stipulated time divide the
normal distribution curve into two equal halves. From Table 6.8, for normal
deviate of zero value, probability of completing the project in the stipulated
time is 50%.
However, if we take stipulated time for the project completion as TS =
27 days, the entire calculations for the network shall change. The same has
been reflected in Fig. 6.13 network which has been slightly modified from
Fig. 6.12 for better appreciation of the problem.

TE = 17 TE = 20
5 6
2-3-4
TL = 15 TL = 18
6-7-8 8-9-10
4-5-6 2-4-6
TE = 0 TE = 6 TE = 12 TE = 24 TE = 29

1 2 4 8 9
3-6-9 5-6-7 8-10-12 2-3-4
TL = 2 TL = 4 TL = 10 TL = 24 TL = 27

3-4-5 5-6-7
4-5-6 4-5-6
TE = 10 TE = 18

3 7
7-8-9
TL = 11 TL = 19

Fig. 6.13

Critical path in this network remains the same as was in Fig. 6.12 i.e.
1-2-4-5-6-9. Therefore, value of σ for this path also remains the same =
1.2. The probability of completing the project in 27 days shall be calculated
as below:
TS – TE 27 – 29
Normal deviate z = = = –1.67
σ 1.2
From Table 7.1, for normal deviate z = –1.67, probability of completion
within stipulated time period is 4.8%.
Thus, there is 4.8% probability that the project will be completed in 27
days.
Similarly, other probability scenarios can be calculated.
Example 6.6: Probability of the project finishing beyond the earliest
expected time such as 31 days can be derived as below: (assuming that the
critical path remains the same i.e. 1-2-4-5-6-9)
128 Project Planning and Management with CPM & PERT

TS – TE 31 – 29
Normal deviate z = = = 1.67
σ 1.2
From Table 6.8, for normal deviate z = 1.67, probability of completion
within stipulated time period is 95.2%.
Thus, there is 95.2% probability that the project will be completed in
31 days.
Example 6.7: It is desired to calculate the number of days to complete
the said project based on 80% probability. Find out the number of days for
the same.
From Table 6.8, for 80% probability, normal deviate z = 0.8428
TS – TE TS – 29
Normal deviate z = = = 0.8428
σ 1.2
TS = 30.01 days
Thus, there is 80% probability that the project will be completed by
30.01 days.
6.9.3 Probability for Assessing the Risk of Finishing the Project
ahead of or beyond the Expected Duration: From the analysis under
Examples 6.5, 6.6 and 6.7 above, following table is derived:

Table 6.10

S/N TE TS σ z Probability of
completion %
(i) 29 27 1.2 –1.67 4.8
(ii) 29 28 1.2 –0.833 20.83
(iii) 29 29 1.2 0 50
(iv) 29 30.01 1.2 +0.8428 80
iv) 29 31 1.2 +1.67 95.2

Fig. 6.14 shows the normal distribution pattern for these data values.
Fig. 6.15 is the graphical plot of probability versus project duration. This
curve provides the full range of probabilities for assessing the risks of
finishing the project ahead of or beyond the expected duration of 29 days
i.e. earliest expected time.
Slack Value, Critical Path and Probability of Completion 129

Probability
Function
(Not to
scale)

26 27 28 29 30 31 32

Duration in days

Fig. 6.14

100 0

75 25

Probability
of 50 50 Risk
completion

25 75

0 100
0 10 20 30 40 50 60 70 80 90 100
Duration in days

Fig. 6.15: Curve showing full range of probabilities for assessing the risks

Example 6.8: A network is given in Fig. 6.16 below. Calculate the

probability of completion in 18 days. Draw a curve to show the full range
of probabilities for assessing the risks of finishing the project ahead of or
beyond the expected duration of 18 days.
130 Project Planning and Management with CPM & PERT

TE = 7

3 TE = 10
2-3-4
TL = 9 5
TE = 0 TE = 3 3-4-5 5-6-7 TE = 16
TL = 12
1 2 0-0-0 7
2-3-4 0-0-0
TL = 2 TL = 5 TE = 10 TL = 18 = Ts
TE = 8
4-5-6 3-4-5
6
4
1-2-3
TL = 14
TL = 12

Fig. 6.16

Solution: Critical path in this network is 1-2-3-5-7 and earliest finish

time for the project is, TE = 16 days. Stipulated completion time is 18 days.
Along the critical path we will derive σ for the network as below:
2
 tp − to 
σ == 
2

 6 
Activity to tp σ2
1-2 2 4 0.11
2-3 3 5 0.11
3-5 2 4 0.11
5-7 5 7 0.11
Σ = 0.44
σ2 = 0.44
σ for the network = √0.44 = 0.66
TS – TE 18 – 16
Normal deviate z = = = + 3.03
σ 0.66
From Table 6.8 for normal deviate z = + 3.03, probability of finishing
the project in 18 days is about 100%.
For other time durations, following table shows the probability of
completion of the project.
Slack Value, Critical Path and Probability of Completion 131

Table 6.11

S/N TE TS σ z Probability of
completion %
(i) 16 14 0.66 –3.03 0
(ii) 16 15 0.66 –1.51 6.60
(iii) 16 16 0.66 0 50
(iv) 16 17 0.66 +1.51 93.40
(iv) 16 18 0.66 +3.03 100

100 0

75 25
Probability
of 50 50 Risk
completion
25 75

0 100
14 15 16 17 18
Duration in days

Fig. 6.17: Curve showing full range of probabilities for assessing the risks

Example 6.9: From the network shown below in Fig. 6.18 find the
probability of completion of the project in 22 days and 27 days respectively.

TE = 7 TE = 11

4 8
3-4-5
TL = 11 TL = 15

3-4-5 0-0-0 6-7-8

TE = 0 TE = 3 TE = 7 TE = 24

1 3 6 10
2-3-4 2-4-6 7-9-11
TL = 2 TL = 6 TL = 10 TL = 22
TE = 14
3-5-7 7 3-5-7
0-0-0
TE = 19
TE = 5 TE = 11 TL = 12
4-5-6 9
2-3-4
2 5
4-6-8 TL = 17
TL = 3 TL = 9

Fig. 6.18
132 Project Planning and Management with CPM & PERT

Solution: When TS = 22 days:

Critical path in this network is 1-2-5-7-9-10 and earliest finish time
for the project is, TE = 24 days. Stipulated completion time is, TS =22 days.
Along the critical path we will derive σ for the network as below:
2
 tp − to 
σ2 ==  
 6 
Activity to tp σ2
1-2 3 7 0.45
2-5 4 8 0.45
5-7 2 4 0.11
7-9 4 6 0.11
9-10 3 7 0.45
Σ = 1.57

σ2 = 1.57
σ for the network = √1.57 = 1.25
TS – TE 22 – 24
Normal deviate z = = = –1.6
σ 1.25
From Table 6.8 for normal deviate z = –1.6, probability of finishing the
project in 22 days is about 5.5%.
When TS = 27 days:
For TS = 27 days, critical path remains the same i.e. 1-2-5-7-9-10,
therefore, σ remains the same i.e. 1.25.
TS – TE 24 – 24
Normal deviate z = = = + 2.4
σ 1.25
From Table 6.8 for normal deviate z = + 2.4, probability of finishing
the project in 27 days is about 99.2%.

Questions
1. Draw a comparison between PERT and CPM. (ESE-2005 : 10 marks)
2. Explain various steps involved in development of networks.
(ESE-2006 : 10 marks)
3. Define critical, semi critical, sub-critical and super critical paths in a
network. What is the significance of negative slack value?
Slack Value, Critical Path and Probability of Completion 133

4. What is a milestone chart? How does it differ from a Bar chart? Define
‘Earliest expected time’, ‘Latest allowable time’ and ‘slack’ for a PERT
network. (CS-1999 : 20 marks)
5. (i) Briefly discuss the Fulkerson rule of numbering events in a network.
(ii) What is the different between CPM and PERT in network analysis?
(CS-2009 : 6 + 6 marks)
6. What is the probability of completing an activity on its expected time te?
7. Which curve path is assumed to be followed by an activity individually
and a project in totality?
8. What is normal deviate and how it helps in finding the completion time
for a project?
9. What do you understand by a standardized normal curve?
10. While calculating the probability of finishing a project within the
scheduled time why only critical path activities are considered?
11. Why it is necessary to standardize the random curve obtained from a
network? How it is done?
12. Earliest expected time for a project is derived as TE. However, while
calculating the probability of completing the project within TE one gets
50% probability. How do you explain this statement?
13. If the stipulated completion date (TS) is ahead of or beyond the earliest
completion time of the project (TE), what effect will be on the critical
path and probability of completion of the project? Explain by an
example.

Problems
1. For the network shown below, find critical path and slacks for various
events, if the scheduled date of completion of the project in 36 days.
(CS-1996 : 20 marks)

3
tE = 12
tE = 8
tE = 3

1 2 4 7 8
tE = 5 tE = 9 tE = 12 tE = 5

tE = 4 tE = 2
tE = 10

5 6
tE = 8
134 Project Planning and Management with CPM & PERT

2. (a) Define ‘slack’. What does negative slack indicate in PERT network
analysis?
(b) The network shown in the figure below has the estimated duration
for each activity marked. Determine the total float for each activity
and establish the critical path.

E
2 t=5 6

A F
t=3 t=6 I t=1
B G
1 3 5
t=4 t=4

D t=3 H
C
t=1
t = 14
4

(ESE-1996 : 5 + 25 = 30 marks)
3. A building project comprises of seven activities and the relevant date is
given below:
Estimated Duration (days)
Activity Optimistic Most likely Pessimistic
Time time time
1-2 1 1 7
1-3 1 4 7
1-4 2 2 6
2-5 1 1 1
3-5 2 5 14
4-6 2 5 8
5-6 3 6 15
(i) Develop the network and identify the critical path.
(ii) Identify float and slack.
(iii) Calculate variance for each activity.
(iv) Calculate standard deviation of the project. (CS-2009 : 14 marks)
4. For a network as shown below, values of the expected time (in days) for
various activities have been shown along the arrows. If the scheduled
Slack Value, Critical Path and Probability of Completion 135

completion time of the project is 32 days, determine the slack time for
each event and identify the critical path and sub-critical path(s). Enter
the values in a tabular form.

tE = 9
2 4
tE = 6

tE = 0 tE = 8
1 6
tE = 12
tE = 5
tE = 6
tE = 9
3 5

5. For the network shown in figure below, three time estimates are shown
against each activity. Number the events and calculate the earliest
expected time for the project. Calculate earliest expected time and
latest occurrence time for each event and mark the critical path.

2-3-4
4-5-6

2-3-4
2-4-6
7-8-9 3-5-7
3-4-5 1-2-3

3-4-5
4-6-8

6. From the figure above in Problem-1, find out the probability of

completion of the project if the stipulated time is 19 days and 24 days
respectively. Plot a curve showing assessment of the risk corresponding
to the probabilities of completion on given stipulated days.
7. Draw a network for the following table of a project and find out following:
(a) Expected duration and variance of all activities.
(b) Variance of project duration
(c) Probability that the project will be completed at least 3 weeks earlier
than expected.
136 Project Planning and Management with CPM & PERT

Activity Estimated duration (Week)

i j Optimistic Most Likely Pessimistic
1 2 1 1 7
1 3 1 4 7
1 4 2 2 8
2 5 1 1 1
3 5 2 5 14
4 6 2 5 8
5 6 3 6 15
8. The interdependence of a job consisting of seven activities A to G is
given as:
Activity A B C D E F G
Predecessor - - A B A B C,D
activity
Successor C,E D,F G G -
activity
The time estimation in days for each activity is:

Activity Time estimates Z (+) % Probability

A 6-9-18 0.8 78.81
B 5-8-17 0.9 81.59
C 4-7-22 1.0 84.13
D 4-7-16 1.1 86.43
E 4-7-10 1.2 88.49
F 2-5-8
G 4-10-22

Draw the network and determine the probability of completing the job
in 35 days. (ESE–1995 : 15 marks)
9. A project is expected to take 20 months along the critical path having a
standard deviation of 2.5 months. What is the probability of completing
the project within (i) 20 months (ii) 25 months and (iii) 17.5 months?
The probability percentage for different values of probability factor is:
15.87% for –1; 50% for 0; 97.72 % for +2. (CS-1999 : 20 marks)
Slack Value, Critical Path and Probability of Completion 137

10. For a network shown below, calculate the probability of completion of

the project in 24 days.

3-5-7
2 5 5-7-10
2-4-6
6
1 2-5-8
0-0-0
2-3-5
3-4-6
3-5-8 4
3
7
Project Time-Cost Trade Off
and Updating

7.1 Introduction

Time, cost and quality are the basic ingredients of a project and form the
three vertices of the project ‘Iron Triangle’ as shown in Fig. 8.1. Therefore,
completion of a project on time, on cost and with acceptable quality
standards has remained the basic principle to determine its success or
failure.

Cost

PROJECT

Time Quality

Fig. 7.1: Iron Triangle of a Project

Change in any of the vertices shall result in changes in other two

vertices. For example, if project time schedule is curtailed, it may result in
cost escalation and quality deterioration. Similarly, if quality standards are
expected to be very high, it will result in time overrun and cost escalation
of the project.
Project Time-Cost Trade Off and Updating 139

A project consists of multiple activities and events. As an activity

consumes resources we will focus on activity part here. It is in this context
that duration of an activity can often vary depending upon the type and
amount of the resources that are deployed. For example, assigning more
workers to a particular activity will normally result in shorter duration
for accomplishing it. On the other end, faster speed may result in higher
cost and inferior quality. In fact, reducing both i.e. project cost and time
is critical in today’s market driven economy. This relationship between a
project’s time and cost is called time-cost trade off decision which has been
investigated extensively in the construction management literature. Time-
cost trade off decision is complex and requires selection of appropriate
construction method for each task of the project. In practical sense, time-
cost trade off is an important management tool to overcome one of the
limitations of the CPM i.e. of being unable to bring the project schedule to
a specified duration.

7.2 Object of Time-Cost Trade off Analysis

The basic object of time-cost-trade off analysis is to reduce the original

project duration determined from the critical path analysis, to meet a
specific deadline with minimum cost. There may be instances when a
project is required to be completed in a specific time for variety of reasons
such as:

•• Finish the project in a pre-defined deadline as defined in the

contract document.
•• Recover early delays.
•• Avoid liquidated damages.
•• Free key resources early for other projects.
•• Avoid adverse weather conditions that might affect the entire
schedule and cost.
•• Receive incentive for the company and bonus to the employees for
early completion.
•• Improve project cash-flow.
•• To complete early and move to other project site even at less profit
but to enhance company profile.
•• Establish market reputation for the company.
140 Project Planning and Management with CPM & PERT

There may be certain other compelling reasons as below which may

necessitate completion of a project in advance:

•• College building may be planned for completion by October end but

public pressure may be to complete it by June itself i.e. four months
ahead of schedule to commence the session one year in advance.
•• Certain infrastructure project would be necessitated to be
completed in advance due to ensuing election for showcasing the
achievement by the political party in power.
•• Survival of the population may be linked to a project viz. construction
of a dam for irrigation and flood control which may put excessive
pressure to complete it before time.

Such ground situations have a direct effect on the cost of a project as

it involves a complete rescheduling of resources; men, material, machinery
and money required for its completion.
Overall project duration can be reduced either by (i) reducing overlaps
of the activity (float time) or (ii) by reducing activities’ duration. Normally,
on reducing the activity duration, there is increase in the direct cost of the
activity concerned due to:

•• Overtime engagement of labour, equipment and machinery i.e.

working in the evening or night shifts and on week-ends. This
requires extra wages over and above the normal wages that causes
cost escalation.
•• Overtime work is more prone to accidents due to inherent reasons
associated to it necessitating extra safety measures, precautions
and care.
•• Overtime work necessarily has quality related issues necessitating
expenditure for repair, rectification and re-doing.

Despite all such problems, time-cost trade off has become the necessity
of the construction industry and forms one of the most important topics in
project management. The activity duration can be reduced by one of the
following actions:

•• Apply multiple shift work.

•• Working extended hours (over time working).
•• Offering incentive payments to increase the productivity
•• Working on week- ends and holidays
Project Time-Cost Trade Off and Updating 141

•• Using additional resources

•• Using materials with faster installation methods
•• Using alternate construction methods or sequence

7.3 Project Time-Cost Relationship

The iron triangle shown in Fig. 7.1 is an equilateral triangle having three
vertices as time, cost and quality. It shows that change in any one of the
ingredients has corresponding impact on the remaining two ingredients. If
one goes through the evolution phases of a project; schedule and budgeted
cost were the initial two basic components of a project. Therefore, for the
purpose of this study i.e. project cost and time analysis, we will concentrate
mainly on two ingredients i.e. time and cost for which there are nine possible
combinations as below:

Project completed on Cost:

Case 1: Project completed on cost and on time (T0, C0)
Case 2: Project completed on cost but before time (T1, C0)
Case 3: Project completed on cost but beyond scheduled time (T2, C0)

Project completed with Cost escalation:

Case 4: Project completed on time but with cost escalation (T0, C2)
Case 5:
Project completed before time but with cost escalation
(T1, C2)
Case 6: Project completed beyond time and with cost escalation (T2,
C 2)

Project completed on less Cost:

Case 7: Project completed on time but with less cost (T0, C1)
Case 8: Project completed before time but with less cost (T1, C1)
Case 9: Project completed beyond time and with less cost (T2, C1)
Case 1 to 6 are frequently encountered in project construction works,
but case 7, 8 and 9 are rarely encountered due to obvious reasons.
Example 7.1: When cost of a project reduced due to completion before
target date:
142 Project Planning and Management with CPM & PERT

Such cases are rare, but a look at following example is worth noting:
Option-1: Excavation for a boundary wall is required to be done
wherein 12 labourers and 01 excavating machine complete the excavation
in 10 days. The rates for them are:
Labour rate per day ` 500
Machine rate per day ` 7000
Cost for excavation per day = 12 × 500 + 01 × 7000 = `13,000
Cost of excavation for 10 days = 10 × 13,000 = `130,000 →Basic cost
Now, let there is a requirement to complete the excavation work in 8
days. To achieve this, project manager will have to deploy extra manpower
and machinery. He will look into following options:
Option-2: Increase the manpower: This can be calculated by
simple mathematics.
Labourers Machine Days
12 01 10
A 01 8
A/12 = 10/8
A = 15
Thus, 15 labours and 01 machine will complete the work in 8 days.
The cost for this iteration shall be
Cost per day = 15 × 500 + 1 × 7000 = ` 14500
ost for 8 days = 8 × 14500 = ` 116,000 → This is less than the basic
C
cost.
Option- 3: Decrease the man power and increase machinery inventory:
In this case, PM may reduce manpower to 5 and depute 2 machines
to accomplish the given task in 8 days. Financial implications shall be as
below:
Cost per day = 5 × 500 + 2 × 7000 = ` 16,500
ost for 8 days = 8 × 16500 = ` 132,000 → This is more than the
C
basic cost.
Option- 4: Decrease the manpower to 9, deploy one machine for all 8
days and another one machine with an operator for last 3 days only i.e. 6th,
7th and 8th day (assuming hiring rates for additional machine and operator
are same as for earlier ones).
Project Time-Cost Trade Off and Updating 143

Cost per day = 9 × 500 + 1 × 7000 = ` 11500

Cost for 8 days = 8 × 11500 = ` 92,000
ost of additional machine and operator for the last 3 days = 3(7000
C
+ 500) = ` 22500
otal cost for the task = 92,000 + 22500 = ` 114,500 → This is less
T
than the basic cost.
This exercise may be summarized as shown in Table 7.1.

Table 7.1

Option Labours Machine Days Cost Remark

Option-1 12 01 10 130,000
Option-2 15 01 8 116,000
Option-3 05 02 8 132,000
Option-4 09 01 8 114,500 * operator for 3 days
+01 *(addl) +01 **(addl) ** machine for 3 days

Thus, as a general rule, when normal time of completion of a project is

curtailed, its total cost may either increase or decrease depending upon the
nature of the job and the manner of achieving the reduction in time which
may be various combinations of the resources deployed.
In actual practice, it is experienced that reduction in the completion
time of a project results in cost escalation and not the other way round.
The Example 7.1 above however, shows that reduction in the overall time
of the project has resulted in overall saving in project through meticulously
deploying the resources for the job. Such situations however, are very rare
and may be encountered when machine time is generally more valuable
than operator time and machine output is significantly higher than that of
the labour force.
It is important that availability of machine for the work shall make a
significant impact on such an analysis. If one takes example of tunneling
work in Delhi and Srinagar (J&K), the situation will be entirely different.
In Delhi, easy availability of tunnel boring machine (TBM) and other such
machinery will result in time saving and cost effectiveness whereas, at
Srinagar deployment of such machinery will result in serious cost escalation.
7.3.1 Time-Cost Trade-off for Individual Activities: The first concept
for this approach is to crash the time duration of activities. Crashing of
an activity refers to taking special costly measures to reduce its duration
144 Project Planning and Management with CPM & PERT

below the normal value. These special measures might include using
overtime, hiring additional temporary help, hiring additional equipment
and machinery, using special time-saving materials, taking specialist
consultant’s services, etc. Crashing the project refers to crashing a number
of activities with an objective to reduce the overall duration of the project
below its normal value.
The CPM method of time-cost trade off is concerned with determining
how much (if any) to crash each of the activities with an eye to reduce the
anticipated duration of the project to a desired value. The data necessary for
this crashing is derived from the time-cost graph for the said activity. Figure
7.2 A and 7.2 B show typical time – cost graphs. In these figures, the normal
points on time- cost graph for an activity shows the time (duration) and cost
of the activity when it is performed in the normal manner. The crash point
at the other end shows the time and cost when the activity is fully crashed
which means that the activity is fully expedited with no further possibility
of time reduction. As an approximation, CPM assumes that these times and
costs can be reliably predicted without significant uncertainty.
7.3.2 Partial Crashing of the Activity: Project manager based on the
ground data may decide whether to crash an activity to the maximum
level or partially. Crashing the activity to its maximum level if not found
financially viable, partial crashing is resorted to. Such partial crashing of
the activity at any level will give a combination of time and cost that will
lie somewhere on the line segment between the two points i.e. normal and
crash points.
7.3.3 Time and Cost Pattern through Pictorial Representation:
There cannot be any universally accepted time-cost pictorial representation
for a project as it will depend on the client – consultant– contractor trio
as to what priority is fixed for the project and that decides the time-cost
pattern. The general practice however, is that reduction in the activity time
from its normal time shall result in cost escalation and that, time for an
activity cannot be curtailed beyond a certain limit due to inherent practical
necessity. A typical time-cost relationship for an activity is drawn in the Fig.
7.2 C below:
Project Time-Cost Trade Off and Updating 145

Crash Crash
Cost D

Activity cost

Normal Normal
cost C

B A

Crash time Normal time

Activity duration

Fig. 7.2(a)

Crash
Crash
Cost D

Activity
cost

Normal Normal
cost C
B A

Crash time Normal time

Activity duration

Fig. 7.2(b)
146 Project Planning and Management with CPM & PERT

Limit of analysis
Maximum trade off Point

Cost Reduced time allocation point

Project starting point

Beyond Trade off zone Fixed cost

trade off zone
zone Time

Fig. 7.2(c): Typical Time-Cost Curve

In these figures, normal time for the activity is ‘A’ and corresponding
cost for it is ‘C’. However, if the activity is to be expedited for its completion
by time ‘B’ (crash time), cost escalates from ‘C’ to ‘D’. It may also be noted
that the activity cannot be crashed further since cost of further crashing
shall tend towards infinity and also, certain minimum time is essentially
required for physical completion of the activity. Therefore, further crashing
of the activity time shall be a futile effort. Another interesting point of this
relationship is that if the time for completion of this activity is stretched
beyond ‘A’, there is no significant reduction in its cost and consequently,
such an effort shall also prove to be futile. Cost corresponding to normal
time is called normal cost whereas the cost corresponding to crash time is
called crash cost.
7.3.4 Pattern of Time-Cost Graph-curve Linear, Straight Line or
Segmented: In Fig. 7.2A and 7.2B above, straight line and curve linear
approximation of time-cost pattern have been shown for explaining the
typical interrelationship between these two ingredients of a project. However,
the pattern if drawn on a graph, this relationship may be approximated to a
straight line or at times to various segments of linear relationship as shown
in Fig. 7.3A, 7.3B, 7.4A and 7.4B. It is up to the project manager as to which
pattern he assumes as the most probable approximation for the project
under consideration.
Project Time-Cost Trade Off and Updating 147

Crash A
Crash A

Cost B
Cost
C
B D
Normal Normal
E

Crash Normal Crash Normal

Time Time
Fig. 7.3 A Fig. 7.3 B
Fig. 7.3(a) Fig. 7.3(b)

Crash A

A
Crash
Cost
Cost
B B
Normal
Normal C

Crash Normal Crash Normal

Time Time
Fig. 7.4 A Fig. 7.4 B
Fig. 7.4(a) Fig. 7.4(b)

7.3.5 Cost Slope

Figures 7.2 to 7.4 as shown above reveal that there is increase in the
cost due to crashing of the activity. The more we crash an activity, the more
is its cost. Slope of the time-cost graph is called cost slope and is defined as

Crash cost − Normal cost

Cost slope =
Normal time − Crash time

Cost slope is the rate of increase in the cost of the activity per unit
decrease in time. Steeper cost slope means steeper rise in the cost per unit
decrease in time.
148 Project Planning and Management with CPM & PERT

In Figures 7.3A, 7.3B, 7.4A and 7.4B, an effort has been made to show
different time-cost graph possibilities which may be encountered by the
project manager. If linear pattern is followed as in Figure 7.3A and 7.3B,
there is option either to take a single line slope or slope of the different
segments, the choice rests with the observer who is either managing the
project or advising the management of the project. Taking a single line slope
is simple, easier and straight forward approach to expeditiously arrive at
the solution. Segmented approach due to its very nature is little difficult,
tedious and time consuming wherein the decision delivery may not be
as prompt as in the case of a non segmented approach. Evidently, single
line slope approach is too rough approximation but speedier one whereas,
segmented approximation might be more accurate, but it definitely makes
calculations more involved. The same logic applies to Figure 7.4A and 7.4B
depicting single line slope and segmented slope for a non-linear time-cost
graph.
Practically, use of a single cost slope or a multiple cost slope shall
depend how non-linear is the cost-time curve. Additionally, it is a matter
of judgment and experience of the project manager to take decision out
of the two available options i.e. between less accurate-but-convenient and
more accurate-but-involved calculations. If the cost slope curve appears as
in Figure 7.4A, a segmented approach shall be more accurate than a single
line slope curve. On the other hand if the cost slope curve is as per Figure
7.4B. a single straight line approximation would be quite satisfactory. Same
analogy shall apply to Figure 7.3A and 7.3B.

7.4 Direct and Indirect Cost of a Project

Cost forms one of the basic ingredients of a project and represents one of the
three vertices of its iron triangle. The very first question about project, its
conceptualization and feasibility revolves around the cost i.e. funds required
for its implementation. Feasibility Reports (FR), Conceptual Project Reports
(CPR) and Detailed Project Reports (DPR) of various projects do not see the
light of day in the absence of funds required for their implementation. Cost
of a project may be taken as sum total of the amount required for resource
deployment in the form of men, material, machinery and money, interest
to banks for the money borrowed, depreciation of the machinery involved,
possible market escalation and multiple over head charges in addition to
the amount required to meet administrative charges and unforeseen
contingencies. Some of such costs are direct whereas others are indirect
which can be categorized as below:
Project Time-Cost Trade Off and Updating 149

7.4.1 Direct Cost: This is the cost that impacts a project directly and can
be calculated by direct measurement without any ifs and buts. Under this
category shall be:

¾¾ Cost on account of labour charges

¾¾ Cost involved due to deployment of equipment and machinery
¾¾ Cost involved on account of the material store inventory used in
the project
¾¾ Cost on account of the sub-contractors involved in the work.

Direct cost for crashed time duration shall be higher than the one for
normal time duration due to obvious reasons.
7.4.2 Indirect Cost: This is the cost impacting a project indirectly through
known or unknown sources. Some of such costs can be measured through
available known techniques whereas others may be known only once the
amount has actually been spent. In short, indirect costs are the necessary
costs of doing work which cannot be related to a particular activity, and in
some cases cannot be related to a specific project. Following costs fall in this
category:

¾¾ Overhead charges
¾¾ General and administrative charges
¾¾ Amount for insurance and interest payments
¾¾ Depreciation costs
¾¾ Compensation for accidents etc.

Indirect cost for a project shall increase if its time duration increases. In
other words, indirect cost of a project shall reduce if the project completion
time is crashed from its normal time. It is assumed to follow almost a linear
path as shown in Figure 7.5A.
If each activity was scheduled for the duration that resulted in the
minimum direct cost, the time to complete the entire project might be
too long which shall invite substantial penalties or liquidated damages
associated with delayed completion causing huge loss to the organisation.
Therefore, there is necessity of time-cost trade off analysis to shorten the
project duration. This can be done by selecting certain activities on the
critical path to shorten their duration.
Looking at the typical cost-time relationship of a project in Figures 7.2,
7.3 and 7.4, it is noticed that crashing the activity causes cost escalation.
150 Project Planning and Management with CPM & PERT

In a large project comprising of multiple activities, a judicious crashing of

activities shall result in successful delivery of the project on the expected
lines. However, if crashing of the activities is not carried out meticulously, it
may cause disaster for the project.

Total Cost

Cost
Cost Direct
Indirect Cost
Cost Indirect
Cost

Crash Normal Crash Optimum Normal

Time Time
Fig. 7.5 A Fig. 7.5 B
Fig. 7.5(a) Fig. 7.5(b)

7.5 Shortening the Project Duration

The minimum time to complete a project is called project-crash time.

This minimum completion time can be calculated by applying critical path
scheduling with all activity durations set to their minimum values. This
minimum time duration for project completion can be used to determine
the project crash cost. The procedure for shortening the project duration
can be summarized in the following steps:

(i) Draw the project network.

(ii) Perform CPM calculations and identify the critical path by using
the normal durations and corresponding costs for the activities.
(iii) Compute the cost slope for all the activities from the following
equation:
Crash cost
Crash cost−−Normal
Normal cost
cost
Costslope
Cost slope==
Normal duration
Normal duration −−Crash
Crash duration
duration

(iv) Start by shortening the activity duration on the critical path

which has the least cost slope and not been shortened to its crash
duration.
Project Time-Cost Trade Off and Updating 151

(v) Reduce the duration of the critical activities with least cost
slope until its crash duration is reached or until the critical path
changes.
(vi) When multiple critical paths are involved, the activity(ies) to
be shortened is determined by comparing the cost slope of the
activity (if any),that lies on all the critical paths with the sum of
cost slope for a group of activities, each of them lying on one of
the critical paths.
(vii) Having shortened a critical path, activities timings and floats
should be adjusted.
(viii) The cost increase due to activity shortening is calculated by cost
slope multiplied by the duration of the time units shortened.
(ix) Continue until no further shortening is possible, and then the
crash point is reached.
(x) The result may be represented graphically by plotting project
completion time against cumulative cost increase. This is the
project direct-cost-time relationship. By adding the indirect cost
of the project to this curve we obtain project-time cost curve. From
this curve, the optimum duration and corresponding minimum
cost of the project is arrived at.

Example 7.1: Table 7.2 below shows the data of a project. It is required
to crash the project duration from its original duration to a final duration
of 110 days. Daily indirect cost is $100. Prepare the crash schedule for it.
Prepare the Time-cost trade off schedule and show the variation of direct
cost, indirect cost and total cost. Find the optimum time for this project?

Table 7.2

Activity Preceded Normal Crash

by Duration Cost ($) Duration Cost ($)
(days) (days)
A - 120 12000 100 14000
B - 20 1800 15 2800
C B 40 16000 30 22000
D C 30 1400 20 2000
E D, F 50 3600 40 4800
F B 60 13500 45 18000
152 Project Planning and Management with CPM & PERT

Solution: A CPM network as below is drawn for the problem:

A 5

1 120
E
50
D
B 3 30 4
20 C
F
40
60
2

Fig. 7.6: CPM network for the Project

Table 7.3

Activity Normal Crash Cost slope

Duration Cost Duration Cost ($) ∆T ∆C ∆C/∆T
(days) ($) (days)
A 120 12000 100 14000 20 2000 100
B 20 1800 15 2800 5 1000 200
C 40 16000 30 22000 10 6000 600
D 30 1400 20 2000 10 600 60
E 50 3600 40 4800 10 1200 120
F 60 13500 45 18000 15 4500 300
$ 48300 $ 63600

From Table 7.3, cost slope of each activity is calculated. Both the
crashability and cost slopes are shown in the table. The critical path for
the network is B-C-D-E and project duration is 140 days. Crashing shall be
performed on the critical path activities since crashing on the non- critical
activities shall not bring down the overall project duration.

Step-1: Crash the activity with minimum cost slope

(a) The activity on the critical path with the lowest cost slope is ‘D’
and that is $ 60. This activity can be crashed by 10 days. With
this crashing a new critical path B-F-E has also been created
with new project duration of 130 days.
Project Time-Cost Trade Off and Updating 153

(b) Duration through path B-C-D-E is also 130 days i.e. critical
path.
The project direct cost increased by 10 × 60 = $ 600
Thus, for project completion time of 130 days:
Direct cost = 48300 + 600 = $ 48900
Indirect cost = 130 × 100 = $ 13000

Step-2: Crash the activity having next higher cost slope than the
one in Step-1
(a) Activity ‘E’ has cost slope of $ 120 which is next to cost slope of
activity ‘D’ considered in Step-1. This activity can be crashed by
10 days. With this crashing project duration along the path B-C-
D-E becomes 120 days. It may be seen that although cost slope of
activity ‘A’ is $ 100 which is less than the slope of the activity ‘E’, yet
it has not been crashed as it doesn’t fall on the critical path.
(b) Duration along the path B-F-E also becomes 120 days.
The project direct cost increased by 10 × 120 = $ 1200
Thus, for project completion time of 120 days:
Direct cost = 48900 + 1200 = $ 50100
Indirect cost = 120 × 100 = $ 12000

Step-3: Crash the activity having next higher cost slope than the
one in Step-2
Still we have to crash 10 days to bring the project completion time to 110
days. Activity ‘B’ has cost slope of $ 200 and it can be crashed by 5 days only.
By crashing ‘B’ by 5 days, time along the path B-C-D-E shall be 115 days.
Similarly, time along the path B-F-E shall also be 115 days. But this crashing
necessitates crashing of activity ‘A’ by 5 days which otherwise becomes the
critical activity with 120 days time for completion of the project. Since
activity ‘A’ has duration of 120 days and it has 10 days’ crashing possibility
under its kitty, therefore, path-A shall also have a completion period of 115
days. Cost of such crashing shall be as below:
Crashing of activity ‘B’ by 5 days @ $ 200 = $ 1000
Crashing of activity ‘A’ by 5 days @ $ 100 = $ 500
Total = $ 1500
The project direct cost increased by $ 1500.
154 Project Planning and Management with CPM & PERT

Thus, for project completion time of 115 days:

Direct cost = 50100 + 1500 = $ 51600
Indirect cost = 115 × 100 = $ 11500
We still require 5 more days for crashing to bring project duration to
110 days.
Along the path B-C-D-E we have now only activity ‘C’ which can be
crashed although at a higher cost. But this crashing is necessary to achieve
the timelines. We have an interesting situation here i.e. three critical paths
namely B-C-D-E, B-F-E and path-A. Thus, any crashing along one path
would require corresponding crashing along the other two paths. Thus,
if activity ‘C’ is crashed by 5 days, then activities, ‘F’ and ‘A’ shall also be
crashed by 5 days each.
It is important to note here that out of the three critical paths, if any
one of the paths does not have crashing duration potential equal to another
two activities (paths), then all the three critical activities (paths) shall be
crashed to the minimum possible available crashing duration of the three
paths.
Cost of crashing in this case shall be;
Crashing of activity ‘C’ by 5 days @ $ 600 = $ 3000
Crashing of activity ‘F’ by 5 days @ $ 300 = $ 1500
Crashing of activity ‘A’ by 5 days @ $ 100 = $ 500
Total = $ 5000

The project direct cost increased by $ 5000.

Thus, for project completion time of 110 days:
Direct cost = 51600 + 5000 = $ 56600
Indirect cost = 110 × 100 = $ 11000
In a tabular form, values so arrived at are shown in Table 7.4

Table 7.4

Project duration Direct cost ($) Indirect cost Total cost

(days) ($) ($)
140 48300 14000 62300
130 48900 13000 61900
120 50100 12000 62100
115 51600 11500 63100
110 56600 11000 67600
Project Time-Cost Trade Off and Updating 155

80000

70000
Total cost
60000

50000 Direct cost

Project 40000
Cost ($)
30000

20000
Indirect cost
10000

0
100 110 120 130 140 150

Project duration (days)

Fig. 7.7

7.6 T
ime-Scale Version of the Project and Contracting the
Network

Time-scale version of the project will be more explicable as below:

0 20 40 60 80 100 120 140

Time -days
A
120N
100C
B C D E
1 2 3 4 5
20N 40N 30N 50N
15C 30C 20C 40C
F
60N
45C

Fig. 7.8
156 Project Planning and Management with CPM & PERT

Critical path in this time-scale version is B-C-D-E and shown by thick

line. Total time for project completion is sum of the activities’ durations along
the critical path and is equal to 140 days. Normal and crash durations of the
activities have been shown below the arrows. For ease, normal duration (N)
is put as numerator and crash duration (C) as denominator in italics.
Indirect cost is $ 100 per day.
Total direct cost of the project is $ 48300 and total indirect cost for 140
days is $ 14000.
To reduce the project time to 110 days, step-by-step approach as below
shall be followed:

Step-1: Crash the activity with minimum cost slope

Identify the activity on the critical path having the minimum cost slope.
In this case activity ‘D’ has the minimum cost slope @ 60 and this activity
can be crashed by 10 days. Therefore, this will be crashed first. With this
crashing, project duration = 130 days
Cost of crashing activity ‘D’ = 60 × 10 = $ 600
Thus, direct cost of the project = 48300 + 600 = $ 48900
Indirect cost = 130 × 100 = $ 13000

0 20 40 60 80 100 120 140

A
120

B C D E
1 2 3 4 5
20 40 20 50

F
60

Fig. 7.9

With this crashing we have now got two critical paths i.e. B-C-D-E with
130 days duration and path B-F-E also with 130 days duration.
Project Time-Cost Trade Off and Updating 157

Step-2: Crash the activity having next higher cost slope than the
one in Step-1
Activity ‘E’ has the next minimum slope @120 and it can be crashed by
10 days. Incidentally, this activity falls on the paths of B-C-D-E and B-C-E
and thus, even after crashing it, there are still two critical paths. By crashing
activity ‘E’ by 10 days, project duration comes down to 120 days.
Cost of crashing activity ‘E’ = 120 × 10 = $ 1200
Thus, direct cost of the project = 48900 + 1200 = $ 50100
Indirect cost = 120 × 100 = $ 12000
It may be noted that now there are three critical paths, B-C-D-E,
B-F-E and path-A all having total duration of 120 days.

0 20 40 60 80 100 120 140

A
120

B C D E
1 2 3 4 5
20 40 20 40

F
60

Fig. 7.10

Step-3: Crash the activity having next higher cost slope than the
one in Step-2
Activity ‘B’ has crashability of 5 days and it has the next minimum cost
slope on paths B-C-D-E and B-F-E. With this crashing of activity ‘B’ by 5
days, path-A still require 120 days’ for completion. Therefore, to reduce the
overall project duration it is imperative to crash the path-A also by 5 days.
By crashing activity ‘B’ by 5 days and activity ‘A’ by 5 days, project duration
comes down to 115 days.
Cost of crashing activity ‘B’ = 200 × 5 = $ 1000
Cost of crashing activity ‘A’ = 100 × 5 = $ 500
Total = $ 1500
158 Project Planning and Management with CPM & PERT

Thus, direct cost of the project = 50100 + 1500 = $ 51600

Indirect cost = 115 × 100 = $ 11500

0 20 40 60 80 100 120 140

A
115

B C D E
1 2 3 4 5
15 40 20 40

F
60

Fig. 7.11

It may be noted that now there are three critical paths, B-C-D-E, B-F-E
and path-A, all having total duration of 115 days.

Step-4: Crash the activity having next higher cost slope than the
one in Step-3 to achieve completion time of 110 days
Since we have to bring overall project duration to 110 days, there is still
a requirement to crash the activities by 5 days. It is important to note that
we have three critical paths all with total duration of 115 days. Therefore,
any effort to bring down the project duration to 110 days on a path shall
have corresponding effect on other two paths.
Thus, activities, ‘A’, ‘C’ and ‘F’ shall be crashed by 5 days each to bring
down project duration to 115 days.
Cost of crashing activity ‘A’ = 100 × 5 = $ 500
Cost of crashing activity ‘C’ = 600 × 5 = $ 3000
Cost of crashing activity ‘F’ = 300 × 5 = $ 1500
Total = $ 5000
Thus, direct cost of the project = 51600 + 5000 = $ 56600
Indirect cost = 110 × 100 = $ 11000
Project Time-Cost Trade Off and Updating 159

0 20 40 60 80 100 120 140

A
110

B C D E
1 2 3 4 5
15 35 20 40

F
55

Fig. 7.12

In this Figure 7.12, there are three critical paths all having duration of
110 days. Cost so derived is shown in Table 7.4 and graphically represented
in Figure 7.7.
Table 7.5 shows what actions have been taken and what has been
achieved so far.

Table 7.5
S/N Activity Cost slope Duration Cost of Project
crashed Crashed crashing duration
(days) duration (days)
($)
1 None - - - 140
2 D 60 10 600 130
3 E 120 10 1200 120
4 B+A 200 + 100 5 1500 115
5 C+A+F 600 + 100 + 300 5 5000 110
Total 30 days $ 8300

Table 7.6 shows the step-by-step crashing of activities and resulting

cost of the project.
160 Project Planning and Management with CPM & PERT

Table 7.6

Activity Days Project Direct Indirect Total cost of

crashed saved duration Project Project cost ($ Project
(days) cost ($) 100/day) ($)
None 0 140 48300 14000 62300
D 10 130 48900 13000 61900
E 10 120 50100 12000 62100
B, A 5 115 51600 11500 63100
C, A, F 5 110 56600 11000 67600

Example 7.2: For a project, normal and crash durations for activities
are shown as per Table 7.7 below. Determine the least cost for expediting
the project. Find out its optimum duration. Indirect cost per day is $ 125.

Table 7.7

Activity Preceded Normal Crash

by Duration Cost ($) Duration Cost ($)
(days) (days)
A - 12 7000 10 7200
B A 8 5000 6 5300
C A 15 4000 12 4600
D B 23 5000 23 5000
E B 5 1000 4 1050
F C 5 3000 4 3300
G E, C 20 6000 15 6300
H F 13 2500 11 2580
I D, G, H 12 3000 10 3150

Solution: Draw a CPM network for the project as below:

Project Time-Cost Trade Off and Updating 161

3
D
B 5 E 23
8 4 23
A 6 G I
1 2 5 7 8
12 20 12
10 15 10
C H
15 13
12 11
F
4 6
5
4

Fig. 7.13

Table 7.8

Activity Normal Crash Cost slope

Duration Cost ($) Duration Cost ($) ∆T ∆C ∆C/∆T
(days) (days)
A 12 7000 10 7200 2 200 100
B 08 5000 06 5300 2 300 150
C 15 4000 12 4600 3 600 200
D 23 5000 23 5000 0 0 0
E 05 1000 04 1050 1 50 50
F 05 3000 04 3300 1 300 300
G 20 6000 15 6300 5 300 60
H 13 2500 11 2580 2 80 40
I 12 3000 10 3150 2 150 75
$ 36500 $ 38480

For the network, A-C-G-I is the critical path and total project duration
is 59 days. Least cost of the project can be determined by progressively
crashing the activities and calculating the overall cost of the project.
Time-scale version of the project
162 Project Planning and Management with CPM & PERT

0 5 10 15 20 25 30 35 40 45 50 55 60
Time - days
D
B
3 E 23N
8N 23C
6C 5N
4C

A C 4 G I
1 2 7 8
12N 15N 5 20N 12N
10C 12C 15C 10C
5N
F
4N
H
6
13N
11C

Fig. 7.14

In Figure 7.14, events 4 and 5 have been kept in one circle for ease
since dummy activity connects them both. Crashability and cost slopes of
the activities have been shown in Table 7.8.
There are four possible paths for completing the project namely:
A-B-D-I (55 days)
A-B-E-G-I (57 days)
A-C-G-I (59 days)
A-C-F-H-I (57 days)
Evidently, critical path in this time-scale version is A-C-G-I and shown
by thick line. Total time for project completion is sum of the activities’
durations along the critical path and is equal to 59 days. Normal and
crash durations of the activities have been shown below the arrows. For
ease, normal duration (N) is put as numerator and crash duration (C) as
denominator in italics.
Indirect cost is $ 125 per day.
Total direct cost of the project is $ 36500 and total indirect cost for 59
days is $ 7375.
Total cost of the project = $ 43875
To optimize the project duration, step-by-step approach as below shall
be followed:
Project Time-Cost Trade Off and Updating 163

Step-1: Crash the activity with minimum cost slope

Identify the activity on the critical path having the minimum cost
slope. In this case activity ‘G’ has the minimum cost slope @ 60 and this
activity can be crashed by 5 days. Therefore, this will be crashed first. It may
be noted that by crashing activity ‘G’ by more than 2 days, this path A-C-G-I
no longer remains the critical path. Therefore, we can crash this activity ‘G’
by 2 days only.

0 5 10 15 20 25 30 35 40 45 50 55 60
D
B
3 E 23
8 23
6 5
4

A C 4 G I
1 2 7 8
12 15 5 18 12
10 12 15 10
5
F
4
H
6
13
11

Fig. 7.15

The project duration now becomes 57 days along A-C-G-I. Thus, we

have two critical paths with project duration of 57 days as below:
A-B-D-I (55 days)
A-B-E-G-I (55 days)
A-C-G-I (57 days)
A-C-F-H-I (57 days)
With project duration = 57 days, we have:
Cost of crashing activity ‘G’ by 2 days = 60 × 2 = $ 120
Thus, direct cost of the project = 36500 + 120 = $ 36620
Indirect cost = 57 × 125 = $ 7125
Total cost = $ 43745
164 Project Planning and Management with CPM & PERT

Step-2: Crash the activity having next higher cost slope than the
one in Step-1
Activity ‘I’ has the next minimum slope @75 and it can be crashed by
2 days. Incidentally, this activity falls on all the paths and hence its crashing
by 2 days shall have reduction in the project completion time of 2 days from
all the four paths. By crashing activity ‘I’ by 2 days, project duration comes
down to 53 days.

0 5 10 15 20 25 30 35 40 45 50 55 60
D
B
3 E 23
8 23
6 5
4

A C 4 G I
1 2 7 8
12 15 5 18 10
10 12 15 10
5
F
4
H
6
13
11

Fig. 7.16

The project duration now becomes 55 days along the paths A-C-G-I
and A-C-F-H-I. Thus, we have two critical paths with project duration of 55
days as below:
A-B-D-I (53 days)
A-B-E-G-I (53 days)
A-C-G-I (55 days)
A-C-F-H-I (55 days)
With project duration = 55 days, we have:
Cost of crashing activity ‘I’ by 2 days = 75 × 2 = $ 150
Thus, direct cost of the project = 36620 + 150 = $ 36770
Indirect cost = 55 × 125 = $ 6875
Total cost = $ 43645
Project Time-Cost Trade Off and Updating 165

Step-3:Crash the activity having next higher cost slope than the
one in Step-2
Now we can crash either activity ‘A’ (by 2 days) with cost slope
@ 100 or G & H by 2 days each having combined cost slope @ 100 (Cost
slope of ‘G’ = 60 and ‘H’ = 40). However, if the activities ‘G’ & ‘H’ are
chosen, then another critical path is generated. Therefore, activity ‘A’ is
chosen for crashing by 2 days. Project duration comes down to 53 days.

0 5 10 15 20 25 30 35 40 45 50 55 60
D
B
3 E 23
8 23
6 5
4

A C 4 G I
1 2 7 8
10 15 5 18 10
10 12 15 10
5
F
4
H
6
13
11

Fig. 7.17

The project duration now becomes 53 days along the paths A-C-G-I
and A-C-F-H-I. Thus, we have two critical paths with project duration of 53
days as below:
A-B-D-I (51 days)
A-B-E-G-I (51 days)
A-C-G-I (53 days)
A-C-F-H-I (53 days)
With project duration = 53 days, we have:
Cost of crashing activity ‘A’ by 2 days = 100 × 2 = $ 200
Thus, direct cost of the project = 36770 + 200 = $ 36970
Indirect cost = 53 × 125 = $ 6625
Total cost = $ 43595
166 Project Planning and Management with CPM & PERT

Step-4: Crash the activity having next higher cost slope than the
one in Step-3
Now, activities ‘H’ and ‘G’ can be crashed by 2 days each with combined
cost slope @ 100. Time-scale version shall be as below:

0 5 10 15 20 25 30 35 40 45 50 55 60
D
B
3 E 23
8 23
6 5
4

A C 4 G I
1 2 7 8
10 15 5 16 10
10 12 15 10
5
F
4
H
6
11
11

Fig. 7.18

With such crashing, there are three critical paths having completion
time of 51 days as:
A-B-D-I (51 days)
A-B-E-G-I (49 days)
A-C-G-I (51 days)
A-C-F-H-I (51 days)
With project duration = 51 days, we have:
ost of crashing activity ‘H’ & ‘G’ by 2 days = (60+40) × 2 =100 × 2
C
= $ 200
Thus, direct cost of the project = 36970 + 200 = $ 37170
Indirect cost = 51 × 125 = $ 6375
Total cost = $ 43545

Step-5: Crash the activity having next higher cost slope than the
one in Step-4
At this stage, the network has three critical paths. The activities that
can be crashed are as below:
Project Time-Cost Trade Off and Updating 167

Case-1: Activities ‘B’ & ‘C’ by 2 days at a combined cost of $ 350 (i.e.
activity ‘B’ @ $ 150/day and ‘C’ @ $ 200/day).
Case-2: Activities ‘F’, ‘G’ and ‘B’ each by 1day. In this case, ‘F’ will be
crashed @ $ 300/day & ‘G’ will be crashed @ $ 60/day, i.e. combined @ $
360/day. Activity ‘B’ shall be crashed @ $ 150/day. Thus, cost of crashing per
day will be $ 510 which is more than case-1.
Therefore, case-1 is chosen wherein activities ‘B’ & ‘C’ are crashed by
2 days each. Following time scale version is arrived at:

0 5 10 15 20 25 30 35 40 45 50 55 60
D
B
3 E 23
6 23
6 5
4

A C 4 G I
1 2 7 8
10 13 5 16 10
10 12 15 10
5
F
4
H
6
11
11

Fig. 7.19

With such crashing, there are three critical paths having completion
time of 49 days as below
A-B-D-I (49 days)
A-B-E-G-I (47 days)
A-C-G-I (49 days)
A-C-F-H-I (49 days)
With project duration = 49 days, we have:
Cost of crashing activity ‘B’ & ‘C’ by 2 days = 350 × 2 = $ 700
Thus, direct cost of the project = 37170 + 700 = $ 37870
Indirect cost = 49 × 125 = $ 6125
Total cost = $ 43995
168 Project Planning and Management with CPM & PERT

From Figure 7.19, it can be seen that no further crashing is possible.

The contract duration and corresponding cost is given in the table
below:

Table 7.9

Project Duration Direct cost Indirect cost ($) Total cost

(days) ($) ($)
59 36500 7375 43875
57 36620 7125 43745
55 36770 6875 43645
53 36970 6625 43595
51 37170 6375 43545
49 37870 6125 43995

45500

40500
Total cost
35500
Direct cost
30500

Project 25500
Cost ($)
20500

15500

10500
Indirect cost
5500
48 50 52 54 56 58 60

Project duration (days)

Fig. 7.20

7.7 Time-Cost Trade off in a Nut-shell

Time-cost trade off is a compression technique or crashing methodology that

allows the project manager to offer re-planning or rescheduling of the project
based on the functional relationship between time and cost. Objectively, the
project manager can generate alternative cost and time scenarios suitable
Project Time-Cost Trade Off and Updating 169

for the project in hand. Furthermore, crashing the schedule provides the
client with feasible options to choose from. At a glance they can review and
accept a range of time saving alternatives and their cost implications.
Essentially, the critical path in project schedule is the key that will
dictate the current finish date for the project. It will also identify the activities
that need to be reduced or crashed if the project is to be completed sooner
than what was first envisaged. By assessing the associated costs involved in
crashing or reducing the time duration of the critical activities, it is possible
to select the most cost effective crash sequence.

7.8 Updating of a Project

A project is planned and programmed to be completed within estimated

cost and time. To achieve this goal, various techniques viz. WBS, CPM,
PERT, MS – Project etc. are used, but due to multiplicity of the interactions,
interdependencies and interrelationships involved in various activities, it
becomes a challenging task to complete the project on time. Furthermore,
these techniques are directed towards planning and scheduling a project
before actual commencement of the work. It has been observed that despite
the best efforts, certain activities require more time than originally planned
or some new activities crop up during the going of a project. Therefore,
original planning does not hold good and there are requirements to change
the planning as the work proceeds through various stages. During such an
exercise, new critical paths are formed depending upon the priority fixed
or the circumstances encountered. Several reasons may be cited for such
alterations in the planning and scheduling of a project viz.

•• Error in estimation during planning as planner’s under or over

estimation is mainly responsible for not adhering to the schedule
•• Non-availability of equipment and machinery on time
•• Acts of God in the form of earthquake, excessive rain, flood or
drought
•• Breakdown of some machines
•• Non-availability of labour force as planned
•• Supply of material resources not commensurate with actual
requirement
•• Sudden change in project completion target due to shift in priority
of client
•• Hike in bank interest rates
170 Project Planning and Management with CPM & PERT

To ensure that schedule time is maintained, it is necessary to review

the progress of project and redraft the network according to the latest
requirements. During redrafting process, scheduled dates are revised, but
if it is not possible to delay the project, the activities on the new critical
paths are accelerated by allocating extra resources in order to adhere to the
committed timelines.
Changes in the project schedule may be for early completion or delayed
delivery depending upon the prevailing circumstances. The network which
is prepared as per the initial planning shall no longer hold good for the
new challenges encountered during progress of the project and therefore,
would require to be altered as per the ground reality. Since a project has
to be in dynamic equilibrium for its successful delivery, it is desirable that
such modifications are reflected by the network diagram so prepared for
the project. With the changes being incorporated in the project as per the
new requirement or as per the constraints on ground, it is obvious that the
original arrow diagram cannot hold good and hence would require a new
arrow diagram incorporating prevailing additional information. The process
of incorporating changes and rescheduling or re-planning is called updating.
The requirement of updating of a project can be explained through
following Time-progress graph as shown in Figure 7.21.

100
Progress ahead of
schedule
-
80
and updated Originally
planned
60 schedule
Progress % Progress behind
40 schedule–
and updated
20

0
0 10 20 30 40 50 60 70 80 90 100 110
T1 T0 T2
Time %

Fig. 7.21

In this figure project progress graph as per originally planned scheme

is shown in firm lines. Other two graphs are shown to reveal the progress
Project Time-Cost Trade Off and Updating 171

ahead of or behind the schedule. T0 represents the original time duration

whereas T1 depicts time ahead of and T2 as behind the originally planned
schedule. If one looks at progress level at 40% time duration we have
following figures from this graph.

•• Target progress as per original planning = 30%

•• Achieved progress (if ahead of schedule) = 45%
•• Achieved progress (if behind schedule) = 20 %

Irrespective of the project progress whether running ahead or behind

the schedule, resources requirement in terms of men, material, machinery
and money etc. shall be at variance from the one that was for the original
scheme. At this juncture we have two options for either of the case.
7.8.1 Progress behind the Planned Schedule: If the progress is behind
the planned schedule, project manager has two options.

(i) To catch the original schedule, that may require crashing of

certain critical activities. Evidently, a revised schedule will be
necessitated to catch the original schedule albeit at a cost.
(ii) If the delay cannot be covered up, then prepare fresh schedule
for completion of the project duly incorporating the prevailing
ground conditions and likely expected challenges.

In both these cases, there is rescheduling and re-planning and

therefore, it is updating of the project.
7.8.2 Progress ahead of the Planned Schedule: In this case also, there
are two options for the project manager.

(i) To delay the project and follow the original plan which definitely
is not desirable.
(ii) To maintain the present progress level and prepare fresh schedule
for completion of the project duly incorporating the prevailing
ground conditions and likely expected challenges.

This rescheduling and re-planning is called updating of the project.

In either of the case discussed above, fresh or updated network arrow
diagram shall be prepared wherein critical activities may be different from
the original one.
172 Project Planning and Management with CPM & PERT

100

80
Progress brought to
Originally planned original schedule by
60 schedule Updating and crashing
Progress %
40

Progress behind
20 schedule

0
0 10 20 30 40 50 60 70 80 90 100
Time %

Fig. 7.22: Project Updating

The process of reviewing the progress of the project duly incorporating

the prevailing ground challenges is known as updating. Updating helps in
evaluating the present status of the project and assess the probability of
completing the project in due time. Updating enables to take corrective
actions in time and take managerial decisions in problem areas. The
updating must be done regularly. Updating process shall be explained
through an example as hereunder:
Example 7.3: Figure 7.23 shows a network for completion of a project.
Time duration in weeks for activities is shown against them. The network
was reviewed after 8 weeks and found that activities have progressed as per
Table 7.10.

TE = 11 TE = 13
5 6
2
3
TE = 0 TE = 3 TE = 7 4 TE = 16

1 2 3 7
3 4 5

6 4
4
TE = 9

Fig. 7.23
Project Time-Cost Trade Off and Updating 173

Table 7.10

Activity Activity Status Time required for

balance work
1-2 Completed 0
2-3 Completed 0
2-4 Partially completed 2
3-5 Partially completed 2
3-7 Partially completed 6
4-7 Not started 5
5-6 Not started 2
6-7 Not started 2
Update the project network.
Solution: Critical path in this network is 1-2-3-5-6-7 with total duration
of 16 weeks. Earliest event time (TE) for the events is shown against each
circle. With conditions as per Table 7.10, time required for completion of
the activities shall be derived as shown in Table 7.11.

Table 7.11

Activity Activity Status Time required for Total time required

balance work for completion of
the activity
1-2 Completed 0 3
2-3 Completed 0 4
2-4 Partially completed 2 7
3-5 Partially completed 2 3
3-7 Partially completed 6 7
4-7 Not started 5 5
5-6 Not started 2 2
6-7 Not started 2 2

From Table 7.11, a fresh network shall be drawn as Fig. 7.24:

174 Project Planning and Management with CPM & PERT

TE = 10 TE = 12
5 6
2
2
TE = 0 TE = 3 TE = 7 3 TE = 15

1 2 3 7
3 4 7

7 5
4
TE = 10

Fig. 7.24

Critical path in this case is 1-2-4-7 with total duration of 15 weeks

as against original schedule of 16 weeks. From Table 7.11, column-2, we
have for each activity, time required for balance work on completion of 8
weeks. A fresh network diagram as below shall be prepared for this balance
duration. For a distinct identity, events are shown in the numbers those are
multiple of 20.

TE = 10 TE = 12

60 80
2

2 2
TE = 8 TE = 15

20 100
6

2
5

40

TE = 10

Fig. 7.25

This entire exercise can be performed through bar chart as shown

below:
Project Time-Cost Trade Off and Updating 175

ctity
1-2

2-3

2-4

3-5

3-7

4-7

5-6

6-7

0 2 4 6 8 10 12 14 16
ration in ees

Fig. 7.26

In this bar chart diagram, status of the activities on completion of 8

weeks has been shown. Completed portion has been marked in dark colour
whereas incomplete part is left as it is. As per the Table 7.10 and 7.11 time
period for completion of certain activities have changed due to which there
has been shift in the individual bar lengths. To display these changes in the
bar lengths, dotted lines have been drawn and arrows marked outward for
increase and inward for decrease in activity durations respectively.
With these changes in the schedule durations of the activities, fresh
bar chart for the project shall be as shown in Figure 7.27.

1-2

2-3
ctity
2-4

3-5

3-7

4-7

5-6
6-7

0 2 4 6 8 10 12 14 16
ration in ees

Fig. 7.27
176 Project Planning and Management with CPM & PERT

7.8.3 When a Project should be Updated?: Frequency of updating a

project shall be guided by the intensity of the changes happening in the
project and desire of the management to update the project. However,
for successful implementation of the project it is essential that project be
updated at regular intervals a decided by the management. Such updating
keeps the project manager and his team motivated and concerned for
the project and helps in taking timely corrective actions against any likely
slippage in a project’s delivery schedule. Although, there are no laid down
guidelines for project updating but, as a general rule following points may be
of help to project manager:
Frequent updating should be done in the projects having small overall
duration. It is because a few slippages in such projects will affect the project
with more intensity causing huge disruption in the overall project schedule.
Timely updating, say weekly or fortnightly as decided by the management
will be beneficial for the overall health of the project. In large projects having
longer completion period, initial hiccups are easily absorbed in the overall
going of the project. However, when such project is nearing completion, say
at 80% progress level or above, frequent updating shall be essential to have
clear picture of the project and better command and control on the project’s
delivery schedule.
It is however for sure that in case there is alteration in the scope of
work at any stage, updating must be carried out irrespective of the project
size and period of completion.

Questions
1. Define iron triangle of a project. Is it possible to reduce the project cost
with reduction in project duration? Explain with an example.
2. What is cost slope? While crashing the activities in a network, planning
should begin with the activity(ies) having higher or lower cost slope and
why?
3. What are the components involved in direct and indirect costs. Name
a few. Why direct cost is assumed varying in curve-linear pattern and
indirect cost in linear pattern. Draw direct and indirect cost and show
how optimum duration for a project can be determined.
4. What does updating of a project signify?
5. What is the difference between updating and crashing?
Project Time-Cost Trade Off and Updating 177

6. A project requires 52 weeks for its completion. At 25% progress level

contractor engages a machine that is capable of doing work equivalent
to 20 labourers. With this, there is likelihood of completion of the project
before target time. Which technique shall be applied i.e. crashing or
updating and why?

Problems
1. The following table gives the activities involved in a pipeline project.
Duration and cost data are also given in the table. Indirect cost of the
project shall be taken as @ ` 120 per day. Draw the network diagram
for it. Calculate the minimum cost of the work corresponding to its
duration of 102 days.
Activity Description Prede- Normal Crash- Cost
cessor ability slope
Time Cost (`) (days)
A Preparation - 10 200 - -
B Move on to A 20 200 - -
site
C Obtain pipes A 40 1800 - -
D Obtain valves A 28 500 8 10
E Locate B 8 150 - -
pipelines
F Cut specials C 10 100 4 40
G Excavate E 30 3000 20 180
trench
H Prepare valve C, G 20 2800 12 50
chambers
I Layout joint C, G 24 1000 10 65
pipes
J Fit valves D, F, H 10 200 4 80
K Concrete I 8 520 1 80
anchors
L Backfill J, K 6 420 1 60
M Finish valve J, K 6 200 3 40
chambers
N Test pipelines J, K 6 150 2 70
O Clean up site L, N 4 300 - -
P Leave site M, O 2 180 - -
178 Project Planning and Management with CPM & PERT

2. Cost and other data for a project are given below. Assume an indirect
cost of ` 200 per day, develop the time-cost curve for this project and
determine the minimum project duration. If indirect cost increases to
` 400 per day what will be its impact on the project and also what will
be the optimum duration.
Activity Preceded Cost (`) Duration
by Crash Normal Crash Normal
A - 3900 3600 6 7
B A 6500 5500 3 5
C B 7200 6350 7 9
D B 4900 4700 18 19
E B 2200 2050 9 10
F C 1700 1200 6 8
G F 7200 7200 5 5
H E 10000 9450 10 11
I D, G, H 4700 4500 6 7
3. A simple project is comprised of 3 activities A, B and C in the given
sequence. Possible work duration (D) and the corresponding direct
costs (DC) for three activities are as under:
A B C
D DC D DC D DC
10 14 7 9 10 14
8 15 6 10 9 15
6 18 5 11 7 19
4 22 4 12
Overhead costs are uniformly 1.2 units (of money) per day. Draw a
variable table of Duration vs total cost for the whole project highlighting
the optimal project cost and the respective activity durations at this
total cost. (CS-2005 : 20 marks)
4. A small project consists of the jobs as shown in table below. Calculate
following:
(a) What is the normal length and minimum project length?
(b) Determine the minimum crashing cost schedule (for the work)
from normal length, by each one day for 7 days.
Project Time-Cost Trade Off and Updating 179

Job (i-j) Normal Crash duration Cost of

duration (days) crashing `/day
(days)
1-2 9 6 20
1-3 8 5 25
1-4 15 10 30
2-4 5 3 10
3-4 10 6 15
4-5 2 1 40
If overhead cost is taken as ` 60/day, what is the optimal length schedule
in terms of both crashing and overhead costs?
5. A, B, C and D are the activities. Their normal and crash durations and
associated costs are given in the table below:
Activity Duration in days Direct cost in `
Normal Crash Normal Crash
A 8 4 6000 12000
B 4 2 2000 14000
C 10 4 4000 8000
D 6 4 4000 8000
For the entire project, the indirect cost is `1000 per day. ‘A’ and ‘B’ are
starting activities. ‘C’ follows ‘B’; ‘D’ follows ‘A’ and ‘C’; ‘D’ is finishing
activity. Draw CPM network. Calculate points for PTC graph and plot
the same. Determine the optimum cost and optimum duration for the
project. PTC is Project-Time-Cost-Trade-off graph.
(ESE-2007 : 25 marks)
6. Calculate optimum cost and optimum duration for jobs of network
given in the table below:
Activity Normal Normal Crash Crash
duration cost (`) duration Cost (`)
(days) (days)
1-2 5 4000 4 5000
1-3 7 8000 3 10000
2-3 6 6000 2 8400
Indirect cost = ` 1000 per day. Sketch project time-cost diagram.
(ESE-2009 : 10 marks)
180 Project Planning and Management with CPM & PERT

7. Determine the minimum cost and optimum duration for a project

network as below. The duration and cost of each activity of the project
is given in the following table. The indirect cost of the project is ` 800
per day. Draw the time-scaled version of the network.
Activity Normal Normal Crash Crash
duration cost (`) duration cost (`)
(days) (days)
A-B 2 10,000 2 10,000
A-C 7 5,000 3 9,000
B-C 6 3,000 3 4,200
B-D 5 2,000 4 2,500
C-D 0 0 0 0
C-E 9 6,000 4 9,000
D-F 11 6,000 6 10,000
E-F 6 7,000 3 9,100
(ESE-2010 : 15 marks)
9. For the network given hereunder, status of the project after 10 days was
as below:
Duration of the activities in days is shown below the activity arrows.

2 6
15

6 5

1 4 7
9 12

5
12
9
3

10 5

(a) Activities 1-2, 1-3 and 1-4 completed.

(b) Activity 2-6 is in progress and will take another 12 days for its
completion.
(c) Activity 3-5 is in progress and shall take another 11 days for
completion.
Project Time-Cost Trade Off and Updating 181

(d) Activity 4-5 is in progress and shall take another 14 days for
completion.
(e)
Activity 4-7 is in progress and shall take another 8 days for its
completion.
(f) Activity 6-7 has not commenced, but will take 7 days for its
completion.
(g) Activity 5-7 has not yet commenced but will take 6 days for its
completion.

(i) Prepare a fresh network based on these conditions.

(ii) Draw a bar chart for the original planning and modified planning.
Show the progress on the original bar chart at the end of 10
days.
(iii) Draw a fresh network omitting the completed activities on the
10th days from the above information.
(iv) Is there change in the critical paths? Explain the reason.
8
Resource Allocation

8.1 Introduction

Fundamentally, project management refers to attainment of the project

scope within allocated budget, specified time and with acceptable quality
standards. To achieve this objective, various means or resources in the form
of men, material, machinery, money and space are necessitated. These
resources are physical entities and cannot be available in abundance for any
project, and therefore, impose a limitation or constraint on project delivery
schedule. Even if the resources are available in plenty, it is necessary to use
them optimally to achieve economy in the project.

Men

Material

Resources Machinery

Money

Space

Fig. 8.1: Resources for a Project

Resource allocation involves identifying the critical resources that

need to be planned and managed for successful completion of the project.
Evidently, when the resources are limited and there is conflicting demand
for them, organizing resources commensurate to project requirements and
Resource Allocation 183

putting them to use as per planned schedule becomes a challenging task

for the project manager. Thus, there is necessity of a systematic approach
for allocation of the resources for successful implementation of the project.
It can therefore be concluded that resource allocation is the process
of assigning and scheduling available resources in the most effective and
economical manner. Projects will always need resources and resources are
scarce; the task therefore lies with the project manager, to determine the
proper timing of those resources within project schedule. In simple terms,
resource allocation helps in choosing the best available resources for a
project and manage them throughout the work. Thus, one can avoid
under or overutilization of the employees.

8.2 Challenges in Allocation of Resources

Most comfortable condition for resources allocation would be when there is

no constraint on any resource in terms of its quantity and on the time for
project completion. In such a situation, project manager would incorporate
the resources as and when available and complete the project. Such a
situation, however is not possible due to severe constraints on project
resources due to limited availability, strict timelines for project completion
and ever increasing competition in the industry to deliver faster, better and
economical. Therefore, ‘Resource Loading’ concept has been incorporated
in project management which refers to allocation of resources to work
elements in project network. A resource loading graph gives a graphical
representation of resource allocation for the project over its entire duration.
Such a graph provides information that is useful for resource planning
and budgeting purpose which in turn forms the basis for successful
implementation of a project.
A shortcoming of most scheduling procedures is that they do not address
the issues of resource availability and utilization. Scheduling procedures
tend to focus on time rather than physical resources. The extreme points of
the relationship between time use and resource use are following:
8.2.1 Time Limited Case: In this case, timelines for project delivery is
fixed and cannot be exceeded under any circumstance. To achieve economy
in project delivery, the objective has to be to use as few resources as possible.
But it is time, not resource usage that is critical.
Example 8.1: A given task is completed by 6 labourers in 10 days. If
this task is to be completed in 4 days, how many labourers will be required?
184 Project Planning and Management with CPM & PERT

Solution: In this case, resource is labourer. There is limit on the time

i.e. 4 days (time limited). One can calculate that to complete the task in 4
days, number of labourers required will be 15. If there is no constraint on
the availability of labourers, one can deploy 15 labourers and get the task
completed in 4 days.
8.2.2 Resource Limited Case: In this case, certain specific resources are
fixed that cannot be used or consumed beyond the prescribed limit. The
efforts however are to be made to complete the project as soon as possible.
But, it is the quantity of specified resources and not time, that is critical.

15
Resource limited

12

10

Laborers
(numbers)

Time limited

0 1 2 3 4 5 6
Time (days)

Fig. 8.2

In the above example, if there is constraint on the availability of

labourers in the market such that not more than 12 labourers are available
per day (i.e. resource limited), a different approach shall be followed
wherein number of labourers shall be kept 12 per day. Evidently, work
cannot be completed in 4 days rather it will now be completed in 5 days.
Thus, efforts have been made to complete the task as soon as possible due
to limitation of resources.
Resource Allocation 185

An example is shown in Figure 8.3 below, where, for a particular

resource, the required resource units for each time period are annotated on
the bar chart. The total number of resource units for each time period can
then be summed and a resource aggregation or load chart can be produced.

Week 1 2 3 4 5 6 7 8 9
Activity

A 10 10
B 8 8 6
C 2 6
D 2 6 10 10 8
E 6 6
Total resource
requirement 10 18 8 10 12 10 10 14 6

Resource 20

unit 15

aggregation 10

chart 5

Fig. 8.3

In Figure 8.2 and 8.3, we assumed one type of resource. Practically,

more than one type of resource may be attributed to a specific activity.
For example, for plastering work, there is requirement of mason, labourer
and bhisti. Similarly, for reinforcement laying; black smith, bar bender
and labourers are required. Therefore, task of a project manager becomes
challenging while assigning the resources to various activities in the most
economical manner.
From a practical standpoint, resource allocation does not have to follow
a constant pattern; some activities may initially require fewer resources
but may require more of the same resources during the later stages of the
project. In a multi-project environment as projects are competing for limited
resources, resource allocation addresses the problem of the optimum use
and timing of the assignment of these resources to the various project
activities. This can be achieved as below:
186 Project Planning and Management with CPM & PERT

¾¾ Delaying or bringing forward the start of certain activities

¾¾ Extending the duration of certain activities, thus reducing the
demand for resources over the duration of the activity or by a
combination of both of these adjustments.

There are two approaches to deal with resource limits and time
constraints; resource smoothing (or time limited resource scheduling) and
resource levelling (or resource limited scheduling). Essentially, both them
are resource optimization techniques.

8.3 Resource Smoothing

Resource smoothing is used when the time constraint takes priority. The
objective is to complete the work by the required date while avoiding peaks
and troughs of resource demand. Thus, resource smoothing is part of the
resource optimization process and has following important features;

¾¾ In itself, resource smoothing is the process that, not withstanding

any constraints imposed during the levelling process, attempts to
determine a resource requirement that is “smooth” and where
peaks and troughs are eliminated. For example, even if 7 units of
a given resource are available at any one time, utilizing 5 of these
units each week is preferable to 4 in one week, 7 the next, 2 the
next and so on.
¾¾ Even if there is no limit to the amount of any one resource available,
it is still desirable that resource usage is as smooth as possible.

A smoothed resource profile will be achieved by delaying some work.

This will remove some flexibility from the schedule and its ability to deal
with unavoidable delays, but the advantage is usually a more efficient and
cost-effective use of resources.
In many situations a mixture of levelling and smoothing may
be required. This is particularly true in the programme and portfolio
dimensions.

8.4 Resource Levelling

Resource levelling is used when limits on the availability of resources are

paramount. It simply answers the question ‘With the resources available,
when will the work be finished?’ Thus, resource Levelling is a process used
Resource Allocation 187

to examine a project for an unbalanced use of resources (usually people)

over time, and for resolving over-allocations or conflicts. It ensures that
resource demand does not exceed resource availability. It aims to minimize
the period-by-period variations in resource loading by shifting tasks within
their slack allowances. The purpose is to create a smoother distribution of
resource usage. Resource levelling has two objectives:

¾¾ To determine the resource requirement so that they will be available

at the right time,
¾¾ To allow each activity to be scheduled with the smoothest possible
transition across usage levels.

Difference between resource smoothing and resource levelling is

tabulated as below;
S/N Resource smoothing Resource levelling
1 Time limited scheduling technique; Resource limited scheduling
Importance is given to duration of technique;
the project. Importance is given to limited
Thus, used in time-constrained resources
scheduling (TCS). Thus, used in resource-
constrained scheduling (RCS).
2 Removes as much resource conflicts Removes all resource conflicts.
as possible; but may not remove all
resource conflicts.
3 May require additional resources to Additional resources cannot be
address left over resources’ conflicts. made available.

4 Activities are shifted only to the Activities may be shifted

extent of the floats available. beyond the float available while
rescheduling the activities.
5 The project duration remains the Generally, project duration gets
same. extended.
6 No change in the critical path. May change the critical path.

Example 8.2: Following Table shows the resources allocation for various
activities. Prepare a network diagram and allocate the resources to ensure
their economical utilization.
188 Project Planning and Management with CPM & PERT

Table 8.2

Activity Predecessor Duration in Tradesmen Remarks

Activity (days) Required
A - 3 2F + 2L F-Fitter
B - 4 2M + 2L L-Labour
C - 6 2W+ 2L W-Welder

D A 10 4F + 4L M-Mason

E B 4 2M + 2L
F C 2 2W + 2L
G D 4 2F + 2L
H E, F, G 3 3F + 3L

TE = 3 TE = 13
D
TL = 3 2 5
10
A TL = 13 G
3 4
TE = 0 TE = 4 TE = 17 TE = 20
B E H
1 3 6 7
4 4 3
TL = 0 TL = 13 TL = 17 TL = 20
C F
6 TE = 6 2
4

TL = 15

Fig. 8.4
Resource Allocation 189

Path 1-2-5-6-7 is critical path for this network. Total time for project
completion is 20 days.

2M+2L 2M+2L
3

3F+3L
2F+2L 2F+2L
4F+4L 6 7
1 2 5

2W+2L 2W+2L
4

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
days

M 2 2 2 2 2 2 2 2 - - - - - - - - - - - -
L 6 6 6 8 8 8 8 8 4 4 4 4 4 2 2 2 2 3 3 3
F 2 2 2 4 4 4 4 4 4 4 4 4 4 2 2 2 2 3 3 3
W 2 2 2 2 2 2 2 2 - - - - - - - - - - - -

Fig. 8.5

From the above data, histogram for labour and fitter shall be as below:

6
Nos of
labors 4

0
2 4 6 8 10 12 14 16 18 20
Days

Fig. 8.6(a): Histogram of labour deployment

190 Project Planning and Management with CPM & PERT

Nos 4
of
Fitters
2

0
0 2 4 6 8 10 12 14 16 18 20
Days

Fig. 8.6(b): Histogram of Fitters’ deployment

In Figure 8-5, routes 1-3-6 and 1-4-6 are non-critical paths. Therefore,
efforts have to be such that, resource smoothing is carried out through
shifting or splitting of the activities within their available slack times. In this
case, resources for activities 3-6 and 4-6 can be shifted as below:

1M+1L 1M+1L 1M+1L 1M+1L

3

2F+2L 4F+4L 2F+2L 3F+3L

2 5 6 7
1

1W+1L 1W+1L 1W+1L 1W+1L

4

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
days

M 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 - - - -
L 4 4 4 6 6 6 6 6 6 6 6 6 6 4 4 4 2 3 3 3
F 2 2 2 4 4 4 4 4 4 4 4 4 4 2 2 2 2 3 3 3
W 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 - - - -

Fig. 8.7

From the above data, histogram for labour shall be as below. However,
the histogram of fitter shall not change since there has not been any shifting
or splitting of this resource.
Resource Allocation 191

Nos of
laborers 4

0
2 4 6 8 10 12 14 16 18 20

Fig. 8.8: Histogram of Labour deployment after resource smoothing

A comparison of Figure 8.6A and 8.8 explains the important features of

resource smoothing process.
In the former case, labour demand has gone as high as 8 from 4th to
8 day whereas from 14th to 17th day it has come down to 2. Therefore,
th

engaging 8 regular labourers for the entire project duration shall prove to be
a costly affair. Similarly, engaging only 2 regular labourers and outsourcing
remaining labourers as per requirement shall not be a wise decision, as
availability of the tradesmen may not suit project requirement. In this
case, project manager after resource smoothing has brought down the
peak requirement to 6 (Fig. 8.8) whereas, the minimum requirement still
remains 2 that cannot be reduced further. Thus, PM, to effect economy
in deployment of resources can engage 4 labourers on regular basis and
put additional requirement through outsourcing. In this case, additional
requirement being less that can easily be managed from the market without
affecting project schedule. Resource smoothing, therefore, gives economical
solution to project manager to utilize available resources judiciously.

8.5 Benefits of Resource Allocation

As can be seen that by following the right process and using a complete
resource management tool, one can make resource allocation easier and
benefit from it in many ways:

•• It improves visibility of all resources across the company.

•• One can avoid under and over-utilization easier.
•• It helps to keep bookings more accurate.
•• It’s easier to negotiate bookings with other PMs.
192 Project Planning and Management with CPM & PERT

8.6 Resource Levelling Heuristics

Resource management is a multivariate, combinatorial problem, i.e.

multiple solutions with many variables, there fore mathematically optimal
solution may be difficult or not feasible. More common approach to analyze
resource levelling problems is to apply some resource levelling heuristics as
below.
Prioritizing resource allocation includes applying resources to activities:

•• With the smallest amount of slack

•• With the smallest duration
•• that starts earliest
•• that has the most successor tasks
•• that requires the most resources

8.7 Resource Levelling Steps

•• Create a project activity network diagram.

•• Create a table showing the resources required for each activity,
durations, and the total float available.
•• Develop a time-phased resource loading table.
•• Identify any resource conflicts and begin to smooth the loading
table using one or more heuristics.
•• Carry on resource levelling to the extent possible for the network.

8.8 Resource Levelling Techniques

In order to achieve economical usage of the resource deployment it is

necessary to identify the path along which slack time is available. This is
the time space or margin that can be utilized for judicious allocation of
resources. Peak demand of resources for a specific duration can be brought
down by increasing the duration for the activities within the available slack
time. Sometimes situation may also demand to prolong the time period of
the project due to limited availability of resources. Thus, a given activity
may be shifted within its slack period so that peak demand is reduced.
Alternatively, activity may be split in parts and performed in piecemeal
manner to reduce peak demand or match the available resources. Thus, to
achieve it, following techniques are available.
Resource Allocation 193

(i) Shift the start date of an activity within its slack time.
(ii) Split the activity within its slack time.

Shifting start date of an activity with the same resources will shift the
resources to new time horizon within its float time. Shifting of start date
shall be done such that the resources over the new time horizon are levelled
i.e. lowering of the peaks and troughs. In this technique, resources shall not
be split, rather they are shifted in totality.
Splitting the activity within its float duration is a sort of rearranging the
activity within its float time to create a more level profile of the resources.
Thus, splitting of the activity is done by spreading over longer time horizon
within its float, thereby reducing the peak demand of the resources. In Fig.
8.7 and 8.8 we have carried out splitting of the activities over a larger time
horizon to ensure smoothening of the resources. Fig. 8.9A and 8.9B below
shall make the concept clear.

2M+2L
1 2
4 days 4 days
(float time)

2M+2L
1 2
4 days 4 days

Fig. 8.9(a): Shifting of activity (by shifting the start date)

1M+1L 1M+1L
1 2
4 days 4 days

Fig. 8.9(b): Splitting of activity

Example 8.3: Consider a project with 7 activities as shown in the table

below. The predecessors of each activity and the duration of the activities
are given. The number of compressors required by each activity is also
given. The organisation has only 6 compressors available with them.
194 Project Planning and Management with CPM & PERT

Activity of Predecessor Duration in Compressors

network activities (days) required (Nos)
A - 3 6
B A 2 1
C B 5 5
D B 4 2
E C 9 4
F C, D 2 4
G E, F 1 6

Prepare the network diagram for the project and allocate the resource
(compressors) through resource smoothing and resource levelling
techniques.
Solution: Network diagram for the project is as below:

4
C E
5 9
A B G
1 2 3 6 7
3 2 1
D F
4 2
5

Fig. 8.10

Critical path for this network is A-B-C-E-G and total time required for
its completion is 20 days. Time scale version of the network is shown in Fig.
8.10. (N represents number of resources)

C E
4
5N 4N

A B
1 2 3 6
6N 1N G
6N

7
D F
5
2N 4N

Fig. 8.11
Resource Allocation 195

days 0 1 2 3 4 5 6 7 8 9 10 1 1 12 13 14 15 16 17 18 19 20

N 6 6 6 1 1 7 7 7 7 5 8 8 4 4 4 4 4 4 4 6

9
Resource availability, N=6

0
0 5 10 15 20

Fig. 8.12: Histogram of Compressor deployment

(i) Application of Resource Levelling for the project: Resource

levelling is done to ensure removal of all resource conflicts without
worrying for extension of project duration. In this case, there is
resource conflict on 6, 7, 8, 9 and 11 & 12th days where resource
requirement is more than availability.

Resource conflict on 6, 7, 8 & 9th days can be resolved if we delay either

activity C or D. However since activity C is on critical path, it is prudent
to delay activity D. We must delay activity D until activity C is completed.
Evidently, D must be shifted to start on day 11 and complete on day 14.
With this, resource requirement for 6, 7, 8 & 9th days comes to 5 which is
less than resource availability 6 thus ensuring no conflict of resources.
But since activity F depends on completion of activity D, it (F) has also
to be shifted. The network diagram shall be as below:

C E
4
5N 4N

A B
1 2 3 6
6N 1N G
6N

7
D F
5
2N 4N

Fig. 8.13
196 Project Planning and Management with CPM & PERT

days 0 1 2 3 4 5 6 7 8 9 10 1 1 12 13 14 15 16 17 18 19 20

N 6 6 6 1 1 5 5 5 5 5 6 6 6 6 8 8 4 4 4 6

9
Resource availability,
N=6
6

0
0 5 10 15 20

Fig. 8.14: Modified Histogram of Compressor deployment

From Fig. 8.14 it is evident that there is still resource conflict on 15th
and 16th days where compressor requirement is 8 as against availability of
6. This can be resolved by delaying either activity E or F. As F is not on the
critical path, it is prudent to delay this activity such that it starts on day 20.
This however, leads to delaying of activity G as F is its predecessor activity.
The network diagram shall be as below:

C E
4
5N 4N

A B
1 2 3 6 7
6N 1N

G 6N
D F
5 6A
2N 4N

Fig. 8.15
Resource Allocation 197

days 0 1 2 3 4 5 6 7 8 9 10 1 1 12 13 14 15 16 17 18 19 20 21 22

N 6 6 6 1 1 5 5 5 5 5 6 6 6 6 4 4 4 4 4 4 4 6

9
Resource availability, N=6

0
0 5 10 15 20

Fig. 8.16: Modified Histogram of Compressor deployment

Now, there is no resource conflict as resource requirement has come to

≤ 6. However, project duration has increased to 22 days.
(ii) Application of Resource Smoothing for the project:
Resource smoothing looks at removing as much resource conflicts
as possible without delaying the total project duration. Under
this, time period for completion of the project is fixed and that
cannot be extended i.e. the project has to be completed in 20 days
irrespective of the availability of the resources. Efforts however,
shall be made to avoid sudden jerks in resources’ availability and
provide resources as smooth as possible.

In Fig. 8.12, there are 6 resource conflicts i.e. on 6th, 7th, 8th & 9th days
and thereafter on 11th & 12th days. By postponing commencement of activity
D to 10th day, we find a smoother distribution of resources wherein, there
is resource conflict on 2 days only i.e. 15th & 16th days (Fig. 8.14). Further
changes in the commencement schedules of activities shall not fetch any
improved results and these 2 resource conflicts i.e. on 11th and 12th days
shall remain if the work is to be completed in 20 days. Time-scale version
of the network and histogram of resource deployment is given hereunder:
198 Project Planning and Management with CPM & PERT

C E
4
5N 4N

A B
1 2 3 6
6N 1N G
6N

7
D F
5
2N 4N

Fig. 8.17

days 0 1 2 3 4 5 6 7 8 9 10 1 1 12 13 14 15 16 17 18 19 20

N 6 6 6 1 1 5 5 5 5 5 6 6 6 6 8 8 4 4 4 6

9
Resource availability,
N=6
6

0
0 5 10 15 20

Fig. 8.18: Histogram of Compressor deployment-Resource smoothing

8.9 Resource Loading

Resource loading describes the amount of individual resources an existing

schedule requires during specific time period. The loads (requirement) of
each resource type are listed as a function of time period. Resource loading
gives a general understanding of the demands a project or set of projects
will make on a firm’s resources. The project manager must be aware of
the flows of usage for each input resource throughout the life cycle of the
project. It is the project manager’s responsibility to ensure that the required
resources in the required quantity/amount are available when and where
they are required.
Resource Allocation 199

Questions
1. What are the challenges of resource allocation?
2. Differentiate resource levelling and resource smoothing.
(ESE-2011 : 5 marks)
3. What is Resource Levelling in Construction Projects Management and
how it is different than Resource Loading? (ESE-2018 : 8 marks)

Problems
1. Various activities required for a project are shown in the table below.
Activities’ duration and respective predecessor activities are also shown
in the table. Prepare a network diagram and allocate the resources for
economical utilization.
Activity Predecessor Duration Resources Remark
activity (weeks) required
A - 3 3M
B A 4 2M, 2C
C A 4 4C M, Mason
D A 3 2M C, Carpenter
E B 4 6C
F C 7 2M
G C 2 4C
H D 5 2M, 4C
J F 2 2C
K H 5 2C
L J 2 2M
M E, G, L 4 4M
N K, M 3 4M
9
Tendering and
Contract Management

9.1 Introduction

Newspapers on any day are flooded with ‘tender notices’ consuming a

substantial proportion of the advertisement space. In fact, the entire project
works under various government departments-Central and State, besides
public sector undertakings – are initiated through ‘Notice Inviting Tenders’.
The tender call finally culminates in a contract after a short interval of
time. This time, however, may get elongated for various reasons viz. outside
interference, poor preparation of the tender, replies to queries, complicated
nature of the work, prolonged discussions and clarifications on multiple
issues pertaining to the work etc.
Irrespective of the circumstances and prevailing ground situations,
efforts are put in to enter into a contract to commence the work in order
to take it to its logical conclusion. The standard Concise Oxford defines the
word contract as, ‘Business agreement for supply of goods or performance
of work at fixed price’. This definition has however, been subjected to
multiple queries and debates during the course of time. Definition aside,
understanding the ramifications of tendering and bid evaluation criteria are
very significant to project managers, client, contractors and sub contractors
for successful implementation of the project.
Tender: It is an invitation of trade/bid. Sometimes buyer/seller intend
to procure/sell his requirements for which he usually requests for an offer/
quotation from potential bidders. His request consists of certain parameters
to perform the work which is called a tender.
Contract: When the buyers/sellers submit their offer/quotation, and it
is accepted by the other party, then buyers/sellers send a formal agreement
to go for performance of the required parameters as agreed. This entity
Tendering and Contract Management 201

enforceable by law forms a contract. Thus, the chain of contract formation

is;

¾¾ First it is tender
¾¾ Then it is offer
¾¾ Offer + Acceptance = Agreement
¾¾ Agreement + enforceable by law = Contract

Alternatively, a contract is a legal document that states and explains a

formal agreement between two different people or groups and involves doing
work for a stated sum of money. Thus, every contract is an agreement but
every agreement is not a contract. Further, agreements of moral, religious
or social nature are not termed as contracts. For a contract to be valid, the
consideration has to be mutual and lawful. The object should be lawful. It
should have been obtained through free consent of both parties and more
importantly the parties should be competent to contract. Another important
point is that the contract should not have been declared as void under
Contract Act or any other law and there should be certainty and possibility
of performance.
In the process of tendering and finalization of the contract, certain
terms as described below are invariably encountered.

9.2 Request for Proposal (RFP)

RFP is the document that solicits proposal often made through a bidding
process, by an agency or company interested in procurement of a commodity,
service or valuable asset to potential suppliers to submit business proposals.
It outlines the bidding process and contract terms and guides how the bid
should be formulated. RFP are used primarily by government agencies to
get the lowest possible bid.
Technically, an RFP is a formal request in which the issuer asks vendors
to submit proposals demonstrating how a project or service they offer can
address the issuer’s key business needs. Following are the standard steps of
RFP process:

(i) Establish the project boundaries.

(ii) Identify key stakeholders and advisers.
(iii) Talk to stakeholders and define your project needs.
(iv) Write the RFA.
202 Project Planning and Management with CPM & PERT

9.3 Notice for Invitation for Tender (NIT)

This is the notice to prospective bidders for quoting their rates for the
subject work. It specifies details on all aspects of the proposed work, advance
payment, earnest money deposit, price of tender documents etc. NIT is
brought to the attention of a wide numbers of bidders through tendering
process in the form of advertisement in select newspapers and through
e-tendering on the website of the concerned department. The place and
time for submission of the bid are set forth in the NIT.

9.4 Earnest Money Deposit (EMD)

In simple terms, EMD is the amount a seller takes to check the earnestness/
seriousness of the bidders in case they are selected as winners. Bidders have
to pay this EMD amount along with the bid response. It is also known as a
binder, token money or good – faith deposit. It is one of the most important
document/instrument which a bidder has to submit along with other
documents. If the party withdraws its tender before the date of validity, such
EMD shall be forfeited. Thus, provision of EMD is meant to dissuade the
frivolous parties getting into the arena.
The format/instrument through which the EMD can be submitted
depends upon the client’s preference. Generally, EMD is sought in the form
of demand draft. However, in high value tenders it can be in the form of
BG. The EMD value can be a fixed amount or a certain percentage of the
bid price for which the bidder is quoting. This varies from 1% to 5%, but
the typical value is 2%. In order to avoid any leakage of information among
the bidders and bring more transparency and efficiency in bidding process,
the clients are asking for a fixed value instead of % age of bid price. EMD
instrument is returned to all unsuccessful bidders once the evaluation is
completed and the contract is signed by the successful bidder. In case of the
successful bidder, EMD is exchanged by Security Deposit (around 10% of
the bid price). However, if the successful bidder refuses to sign the contract
and fails to submit security deposit, the EMD is forfeited.

9.5 Security Deposit (SD)

When a bidder is successful, he is asked to deposit certain amount as

security deposit. The main objective of taking this deposit is to ensure that
the bidder supplies the tendered items and progresses the work as per the
Tendering and Contract Management 203

terms and conditions of the bidding document. In case, the bidder does not
complete the task as per the work order, the client can recover the loss by
forfeiting his security deposit. The most preferred mode of SD is through
Bank Guarantee (BG).Typically, the amount of SD is much higher than the
amount of EMD and generally varies from 5% to 10% of the bid value. It is
the normal practice among the clients to return the EMD and take SD at
the time of signing of the contract.

9.6 Performance Guarantee

This is contractor’s promise to client to complete the project undertaken.

To further elaborate, a Performance Guarantee is a document that legally
guarantees that the contractor will complete the work undertaken by him.
Alternatively, should the contractor fail to construct the building according
to the specifications laid down in the contract documents, the client is
guaranteed compensation for any monetary losses up to the amount of the
performance bond. When a BG covers a non-performance of contractual
obligations, it is called performance guarantee. Banks deal in money hence
all their obligations are defined in money terms. Thus, a Bank Guarantee is
a promise from a bank that the liabilities of debtor will be met in the event
of his non-performance of the contractual obligations.

9.7 Prequalification (PQ) Criteria

Prequalification is a yardstick to allow or disallow the firms to participate

in the bidding process. A vaguely drafted PQ criteria results in stalling
the process of finalizing the contract or award of the contract in a non-
transparent manner.

9.8 Prequalification of Bidders

This is screening of the potential contractors, suppliers or vendors (on the

basis of factors viz. experience, financial capability, management ability,
reputation, work history etc.) wherein a list of qualified bidders who will
receive the instruction to bid (ITB) documents is prepared. The purpose of
PQ is to assess the technical, managerial and operational competence and
financial soundness of interested bidders.
While submitting application for prequalification, the bidders
must furnish (i) package number (ii) description of work intended for
204 Project Planning and Management with CPM & PERT

prequalification (iii) name/address of the bidder including telephone/telex/

fax/address/email-id of the registered office, name/address of the firm/chief
executive, etc.
Advantages of Prequalification are:

•• Saves high cost of bidding by unqualified bidders

•• Promotes interest of willing contractors
•• Serves as indicator of potential bidders
•• Enhances transparency and reduces controversy
•• Ensures that the competition is amongst appropriately qualified
bidders

9.9 Evaluation of Bids

Once the bids are received though e-tendering or physically on specified

date and time, they are evaluated in terms of the conditions set therein.
Bids not conforming precisely to the NIT are eliminated. No bidder can
change his bid or withdraw from competition once the bids are opened. Bids
are evaluated on the basis of the pre-qualification criteria mentioned in the
documents.
The bidder must also furnish the list of technical personnel with their
qualification and experience, name of subcontractors and nature of jobs
handled by them. Details of similar works executed in the last five years
(or as specified) indicating name, address of the clients, type of work, total
quantum of work, contract value, completion cost and completion time etc.
need to be furnished by the bidder in the prescribed format. Copies of the
testimonials of the aforesaid documents must be enclosed by the bidder
along with his submittals. Other information asked from the bidders are
in the form of current orders in hand, their expected time of completion,
value of the single work/order executed during the previous five years (or
as specified), for which they have to submit the documents as per the
prescribed format.
Certain other information as below is also required to be furnished by
the bidder:

(a) Work experience: During previous 3 years (time period may

vary) bidder should have completed at least;
one work equal to certain %age (as decided by the client) of the
value of the work for which bid has been submitted.
Tendering and Contract Management 205

Or
two works equal to certain %age (as decided by the client) of the
value of the work for which bid has been submitted.
Or
three works equal to certain %age (as decided by the client) of the
value of the work for which bid has been submitted.
(b) Equipment and machinery: Bidder must submit a list of
equipment and machinery either owned by him or his proposed
plan to hire the same for execution of the work.
(c) Financial status of bidder: This is insisted by the project
authorities to know the financial health of the bidder. This is sought
in the form of annual turnover of the firm during previous five years
duly authenticated by a chartered accountant. Another document
to verify the financial status of the bidder is in the form of certified
true copies of the Income Tax return filed by it during last three
assessment years. Additionally, a certificate from the banker is
necessarily required to verify solvency status of the bidder.
(d) Bid capacity: It is the capacity of the bidder that is derived on the
basis of certain pre-decided formula that forms the part of the bid
document. Generally following formula is followed;
Assessed bid capacity = (A × N × M) – B

Where;
‘A’ is the maximum value of construction works executed in any one
year during the last five years, taking into account the completed as
well as works in progress.
‘N’ is number of years prescribed for completion of the work for
which bids have been invited.
‘M’ is taken as 2
‘B’ is the value of existing commitments and ongoing works to be
completed during the period of completion of work for which bids
have been invited.

9.10 Concept of Contract

Contract management constitutes the brain of project management and,

hence, the project team must be conversant with the jargon of contracts.
One can understand the concept of contract as below:
206 Project Planning and Management with CPM & PERT

¾¾ A proposal or an offer, when accepted is a promise.

¾¾ A promise and every set of promises forming the consideration for
each other is an agreement.
¾¾ An agreement, if made with free consent of parties competent to
contract, for a lawful consideration and with a lawful object is a
contract.

9.10.1 Proposal or offer: When a party signifies to another its willingness

to do, or to abstain from doing something with a view to obtain the assent
of the other party to such act or abstinence, it is said to make a proposal
or offer. In fact, the whole purpose of entering into a contract starts with
a proposal or an offer made by one party to another. For entering into an
agreement, such a proposal must be accepted. A proposal when accepted
becomes a promise. The party making the offer/proposal is known as the
‘promisor’ or the ‘offeror’ and the party accepting such an offer will be the
‘promisee’ or the ‘acceptor’.
There are four crucial points to be looked into while considering the
enforcement of an agreement by law.

(a) The persons or parties involved.

(b) Freedom of consent of each person or party
(c) Lawfulness of the consideration
(d) Lawfulness of the object, or the legal subject matter.

According to Indian contract Act, 1872, 1940 and Indian Contract

(Amendment) Act-1996, a contract is an agreement enforceable by law.
The courts have recognized following elements as being the essentials of a
contract; (i) Mutual assent of offer and acceptance (ii) Consideration (iii)
Competence of parties, and (iv) Legal object. A flaw affecting any of them
renders the contract unserviceable. Therefore, it is necessary that these
aspects are looked into by the contracting parties.

9.11 Tendering Process

NIT is issued by the client department for the purpose of performance of

certain construction work, services or procurement of stores, equipment
and machinery etc. as the case may be. Date of issue of tender (DIT) and
date of receipt of tender (DRT) are mentioned in NIT documents. However,
with introduction of e-tendering there is renaming of these important dates
Tendering and Contract Management 207

as bid submission start date (BSSD), bid submission end date (BSED), bid
opening start date (BOSD) and bid opening end date (BOED). Prospective
bidders having read the conditions mentioned in the tender documents
submit their bids for the work. Submission of bids may be in the form of
single-stage one envelope system, single-stage two envelope system or two
stage bidding system as the case may be. These systems are described below:

9.11.1 Single-Stage: One-Envelope Bidding Procedure

¾¾ Bidders submit bids in one envelope containing both proposals i.e.
the price proposal and technical proposal.
¾¾ The envelopes are opened in public at the date and time fixed in
the bidding documents. Thereafter bids are then evaluated.
¾¾ Once approval from the competent authorities is accorded, the
contract is awarded to the bidder whose bid has been determined
to be the lowest evaluated substantially responsive bid. (L-1 bid)

9.11.2 Single-Stage: Two-Envelope Bidding Procedure:

¾¾ Bidders submit two sealed envelopes simultaneously, one envelope
containing the technical proposal and the other one price proposal.
Both the envelops are put together in an outer single envelope.
¾¾ Initially, only the technical proposals are opened at the date and
time fixed in the bidding documents. The price proposal remains
sealed and are held in safe custody by the purchaser. No changes or
amendment to the technical proposals are permitted. This ensures
that the technical proposals are evaluated without reference to
price. Bids of those bidders who do not conform to the specified
requirements shall be rejected being deficient bids.
¾¾ Once approval from competent authorities of the technical
evaluation is accorded the price proposals are opened in public at a
date and time fixed by the purchaser. The price proposals are then
evaluated.
¾¾ After the approval of the competent authorities of the price
evaluation, the contract is awarded to the bidder whose bid has
been determined to be the lowest evaluated substantially responsive
bid (L-1 bid).
208 Project Planning and Management with CPM & PERT

9.11.3 Two-Stage Bidding Procedure:

¾¾ Bidders first submit their technical proposals, in accordance with
the specifications. This proposal is submitted without price.
¾¾ The technical proposals are opened as per the date and time fixed
in the bidding document. The technical proposals are evaluated
and discussed with the bidders. Any deficiency, irrelevant provisions
and unsatisfactory technical features are pointed out to the bidders
whose comments are evaluated carefully. The bidders are allowed to
adjust or revise their technical proposals to meet the requirements
of the client. The objective of the exercise is to ensure that all the
technical proposals conform to the same acceptable technical
standards and satisfy the technical solution required by the client/
purchaser.
¾¾ Bids of those bidders who are unable or unwilling to bring their
bids to meet the acceptable technical standards shall be rejected as
deficient bids.
¾¾ Once the evaluation of technical proposals has been approved by
the competent authorities, the second stage is to invite bidders
to submit their price proposals and revised technical proposals in
conformity to the acceptable technical standards.
¾¾ The revised technical proposals and price proposals are opened
in public at a date and time fixed by the purchaser/client. While
setting the date, the purchaser/client will allow sufficient time
to bidders to incorporate the required changes involved in the
technical proposals and prepare price proposals. Thereafter the
price proposals and revised technical proposals are evaluated.
¾¾ Once the approval of the competent authorities is accorded, the
contract is awarded to the bidder whose bid has been determined
to be the lowest evaluated substantially responsive bid (L-1 bid).

9.12 E-Tendering: This is the computer network based i.e. online

tendering process wherein, client uploads the tender document including
BOQ on the web-site. Bidders apply for the work online duly quoting their
rates. All information including dates for bid submission and bid opening
are mentioned in the tender document. This system of e-tendering has
been introduced to ensure transparency in the bidding process and at the
same time to achieve higher efficiency through speedy disposal of the entire
process.
Tendering and Contract Management 209

9.13 Award of Contract

Having gone through the tendering process and identified the L-1 bidder
duly scrutinizing the authenticity of documents, reasonability of rates and
other parameters prescribed in the bid documents, accepting authority
accepts the contract and a communication to this effect is sent to the
concerned bidder. In other words, award must be made to that responsible
bidder whose bid, conforming to the invitation for the bid, is found to be the
most advantageous to the project authorities/client after considering price
and other factors. After the work is awarded, a formal contract is to be
signed between the parties. The validity of Contract is governed by the law
applicable to Contract.

9.14 Classification of Contracts

The contracts are classified in various ways by project authorities according

to requirement, conditions and scope of work involved. These are as below;

¾¾ Supply only contract

¾¾ Supply and erection contract
¾¾ Supply and supervision of erection
¾¾ Civil work
¾¾ Supply, installation, testing and commissioning
¾¾ Consultancy contract
¾¾ Maintenance contract
¾¾ Servicing contract

Other types of contracts may be classified as;

¾¾ Fixed quantity contract

¾¾ Running contracts as in government departments
¾¾ Rate contracts as in public sector undertakings
¾¾ Contracts for plant and machinery
¾¾ Contract for sea and river craft
¾¾ Cost plus profit contracts
¾¾ Production sharing or profit sharing contract
¾¾ Transfer of technology contract
¾¾ Turnkey contract
210 Project Planning and Management with CPM & PERT

¾¾ Bilateral contract
¾¾ Multilateral contract
¾¾ Unenforceable contract

Certain other types of classification of contract are:

9.14.1 Lump-sum contract: A lump-sum contract (or stipulated
sum contract) is the traditional form of contract, and is still prevalent in
construction industry. Under a lump-sum contract, a single 'lump sum' price
for all the works is agreed before the work begins. A lump-sum contract is a
great contract agreement suitable to be used if the requested work is well-
defined, significant changes to requirements are unlikely and construction
documents and drawings are completed and available to the party carrying
out the work. A lump-sum contract is preferred when there is a stable soil
condition, entire pre-construction studies and ground assessment is carried
out and the contractor has analyzed documents pertaining to them to his
full satisfaction. This means that the contractors will be able to correctly
price the works they are being asked to carry out. If agreed-upon by the
parties, this type of contract may also contain certain unit prices for items
with indefinite quantities and allowance to cover any unforeseen conditions
during progress of work. The lump-sum contract agreement will reduce
owner’s risk, and the contractor has greater control over profit expectations.
The time to award a lump-sum contract is longer since the client and
the consultant require time for preparation of documents and the competing
parties take time for evaluation, assessment, analysis and verification of
data and ground conditions. However, it will minimize change orders during
construction stage.

9.14.1.1 Advantages of lump-sum contract for the owner

(a) Bidding analysis and selection process is relatively easy as the
documents are ready in advance after due verification of ground
conditions.
(b) Construction cost is fixed at the beginning and hence probability of
variations is almost negligible.
(c) Contractor will try to finish the project faster, thus benefiting the
client to use the assets created at an early date.
(d) It’s much easier to manage and supervise a lump-sum contracts
due to less documentation.
(e) Owner’s risk is very low.
Tendering and Contract Management 211

9.14.1.2 Advantages of lump-sum contract for the contractor

(a) Contractor is motivated to finish the job faster.
(b) Expectedly, there is a big margin for profit realization for contractors
as well as designers.
(c) Payment to contractor is faster as it is based on certain pre-decided
yardsticks for which entry in measurement book may not be
mandatory.

9.14.1.3 Disadvantages of Lump-sum Construction Contract

(a) A lump-sum contract agreement presents a higher risk to a
contractor as all risks are transferred to him.
(b) In case of any variation during construction stage, the owner might
reject change order requests. Therefore, a clear system has to be
put in place to address varying conditions during the course of
construction through necessary provisions in contract document.
(c) All drawings and documents need to be prepared in advance.
(d) Quoting by the contractor may be on higher side to cater for
unforeseen contingencies.

9.14.2 Item Rate Contract: This is also known as unit price contract.
In this type of contract, complete BOQ is prepared in advance and that
forms the part of contract document. Bidders are required to quote rates for
individual items of work mentioned in the BOQ. This type of contract is most
commonly used in almost all types of engineering works of the government
departments. It is suitable for the works which can be distinctly split into
various items and quantities for them can be estimated accurately. Working
under this method is detailed but more realistic almost matching to ground
requirements. Payment to the contractor is done after actual measurement
on ground and recording the same in the measurement books (MBs). As a
result time required for payment to contractor is more than that of a lump-
sum contract. Allowance for variations if required during execution stage,
is covered through appropriate clause in the contract document. The main
demerit of this method lies in the fact that contractor may quote high rates
for the items which are likely to increase and less for the items that are
likely to decrease during execution stage.
9.14.3 EPC Contract: “Engineering, Procurement and Construction”
(EPC) is a particular form of contracting arrangement wherein the EPC
Contractor is made responsible for all the activities from design, engineering,
212 Project Planning and Management with CPM & PERT

procurement, construction management to commissioning and handing

over of the project to the end-user or owner/client, thus, leaving the owner
with no responsibilities except for turning the key at project delivery.
Technically, an EPC Contract is a risk mitigation tool in the form of a project
document, specifically conceived to transfer risk to the contractor. In EPC,
client will provide basic engineering to the contractor and the latter shall
perform detailed design based on received inputs.
The primary objective for using EPC Contracts is to transfer as much risk
as is practicable from the client to the contractor. This automatically limits
the scope and circumstances under which contractors can make claims for
additional time and money. Such commitment of project completion within
allotted time and agreed cost reinforces the confidence level of the project
sponsors and financial institutions. As a result EPC contracts have emerged
as the construction contracts of choice for major international development
projects and project financings as well. Evidently, the increasing popularity
of EPC contracts is not solely due to the turnkey delivery method, that is
the reason most often cited, although it is definitely an appealing feature of
EPC Contracts.
9.14.3.1 Advantages and disadvantages of EPC contracts: The
major advantage for the client is that there is transfer of almost all risks
associated with procurement, design, construction, implementation, and
commissioning of the project from client to the construction agency. Another
significant advantage is that it establishes a structure whereby the project
company or the client only contracts with one contractor, who in turn
manages all the relationships with sub-contractors, suppliers, consultants
and other agencies associated with the work. This arrangement of work
makes managing task of the project considerably easier for the client or
project sponsors. Project sponsors oversee the project and evaluate progress
and performance as the contractor carries out the project. However, as the
contractor performs both, the design and construction of the work, the
usual checks and balances required during various stages of the projects do
not exist for the owner.
Since, EPC Contracts centralize all of the control over the design,
development and construction in the hands of the EPC contractors, it is
advantageous to them due to their more control over the design, product
selection and the selection of sub-contractors and suppliers. Thus, while
EPC contracts do assign more risk to contractors, yet with the coordination
of the design and procurement, the EPC contractors are in a better position
to exercise a great deal of control to efficiently lower construction costs.
Tendering and Contract Management 213

Although the clients or sponsors have a single point of responsibility

for the delivery of a project, but they do lose involvement with the design
process, adding potential risk particularly when the project’s design is
crucial. Principals or sponsors should therefore, ensure that they mark out
the project’s milestones carefully to avoid life-cycle costs and scope changes
that otherwise are easily overlooked.
9.14.4 Public-Private Partnership (PPP) model: A ‘PPP’ model may be
defined as a long-term contract between a private party and a government
entity to provide a public asset or service, in which the private party bears
significant risk and management responsibility. Remuneration in ‘PPP’
mode is linked to performance. In other words ‘PPP’ is a funding model for
a public infrastructure project wherein the public partner is represented by
the government at a local, state and/or national level.
9.14.4.1 Working of a PPP: In Public-Private Partnerships, government
services or assets are funded and operated with the private-sector. With
this, governments expect to gain by transferring risks of construction,
financing, operations and maintenance to the private sector. The private
sector expectedly gains from operation and maintenance of the assets
created under this scheme and also from certain other incentives and
privileges guaranteed under it. Typically, it is a method whereby private
companies are contracted by the governments to construct, operate and
manage public sector projects on a long-term basis using private funding.
In other terms, a public–private partnership (PPP, 3P, or P3) is typically a
long-term cooperative arrangement between two or more public and private
sectors. With PPP model, following important objectives are achieved:

•• It ensures necessary investment into the otherwise resource

crunched public sectors. As a result more effective public resources
management can be achieved.
•• Higher quality work and timely provision of public services is
attained.
•• Mostly investment projects are implemented within the specified
terms and conditions and thus, do not impose unforeseen extra
expenditures on public sectors.

This model, however, has its own shortcoming i.e. like privatization,
PPPs often increase fees or charges to maximize their profit margins. They
often undermine the public interest in other ways too viz. despite generous
incentives and other privileges from the government, they often compromise
and undermine the State's obligation to regulate in public interest.
214 Project Planning and Management with CPM & PERT

9.15 Certain Terminology of Contract Agreement:

Following terms are invariably used in a contract agreement and therefore

need to be understood in clear and unambiguous manner.
9.15.1 Agent: An agent is a person who represents a company (or an
individual), and acts on its behalf in certain business transactions.
9.15.2 Principal: The principal is one who utilizes the services of an agent
to conduct business.
9.15.3 Power of Attorney: This is a written authorization that gives right
to act as the representative of somebody in business or financial matters.
This is a legal document and may be given to an agent or agency by the
Principal through issuance of a power of attorney, wherein the agent or
agency is known as an attorney-in-fact. An agent may be appointed to
do anything which the principal may do lawfully. An agent is vested with
discretion, and represents his principal in transactions for which he is
retained. An important factor for the project manager with power of attorney
is his exposure to negligence torts. He can be sued as an individual, while at
the same time the company is sued as a legal entity.
9.15.4 Mobilization Advance: It is a monetary payment made by the
client to the contractor for initial expenditure with an objective of site
mobilization and to meet a fair proportion of job overheads or preliminaries.
In other terms this is the payment provided to a construction contractor or
a supplier of specially manufactured equipment and machinery to assist in
meeting extraordinary start-up costs incurred to promptly perform under
the contract. Evidently, mobilization advance payment (MAP) reduces
contractor’s immediate need for working capital. Mobilization advance is
given against bank guarantee of equal amount.
In general, certain percentage of the contract amount is permitted for
mobilization advance- ranging from 5 to 10% with a definite time period and
interest rate for return that may be adjusted from the regular payment bills
of the contractor. In some departments mobilization amount is fixed @ 10%
of the contract value with a condition that initially, 5% of the advance shall
be given at the beginning of the work and remaining 5% advance shall be
released on production of the expenditure details of the initial 5% payment.
It is not that all construction companies take such advance payment, rather,
they may opt for financial institution or banks if interest rates are favourable
there.
Tendering and Contract Management 215

The mobilization advance normally bears simple interest at the rate of

10% to 12% and shall be calculated from the date of payment to the date of
recovery (365 days in a year) both days inclusive, on the outstanding amount
of advance. Mobilization advance is normally paid in case of construction
contract. Such contracts are covered under section 80, therefore, TDS will
be applicable on such advances.
9.15.5 Liquidated Damages: When ‘time’ is a major factor in the
execution of a contract, it is implied that work must be completed by a
certain date as mentioned in the agreement. Failure to meet the requirement
as specified in the documents leaves the offending party liable to the other
party for damages that is known as liquidated damage (LD). Since such
damages may be extremely difficult to assess and evaluate exactly, being
intangible and hard to define, the usual practice is to specify a definite
amount as liquidated damages in lieu of actual damages suffered. Agreed
by both the parties, this amount is enforceable by law and must be justified
by the damaged party. The onus of proof lies with the defaulting contractor.
Usual value of LD is 0.5% of the price of undelivered work for each calendar
week, subject to a maximum of 10% of contract value. Certain departments
levy LD @ 0.5% of contract value for each calendar week subject to a
maximum of 10% of contract value.
9.15.6 Bonus: There may be circumstances when a project needs to be
completed before the stipulated date of completion as mentioned in the
contract agreement. The contractor may not be obliged to make efforts
to complete the work ahead of schedule unless provided with suitable
incentive or bonus clause in the contract document. Although, for delayed
delivery of the work, penalty clause in the form of LD or compensation
is invariably included in the contract agreement but bonus clause is not
found included in all contracts. Both these provisions are necessary to be
enforceable by law. Consistently, courts have ruled out that penalties are not
enforceable unless there is an equivalent bonus provision. The usual bonus
is 1/8 percent per week subject to a maximum 2% of contract value.
9.15.7 Force Majeure: Force Majeure is a French term that literally
means ‘greater force’. This refers to a clause that is included in contracts
to remove liability for natural and unavoidable circumstances that interrupt
the planned course of activities and events and in turn restrict the
participants from fulfilling their obligations. It is related to events viz. act
of God, for which no party can be held accountable such as hurricane or
tornado, earthquake and floods. Force majeure also encompasses human
actions, viz. armed conflict, war, revolution and change in government. For
216 Project Planning and Management with CPM & PERT

events to constitute force majeure, they must be unforeseeable, external

to the parties of contract, beyond control and unavoidable. Latest example
of force majeure is the spread of killer Corona virus COVID-19 which has
brought everything in the entire World to a grinding halt.
9.15.8 Escalation Clause: In general contractors spend a great deal of
their time in balancing costs on their projects. To ensure profit in the work,
it is essential that they control material, labour, fuel, and overhead costs
while continually receiving payment from clients. The task is not easy as
a number of factors are responsible for price rise on which a contractor
cannot have any control directly or indirectly. Ideal condition would be
the one if fuel, labour or material costs do not vary throughout the project
period. However, such situation is next to impossible, particularly in the
fluid economy that we face in our country. To combat such price rise or
market variation in cost, escalation clause works as an effective tool for the
contractor. Thus, an escalation clause is a provision in a contract document
that calls for adjustment in fees, wages, or other payments, caused due to
fluctuations in the costs of raw materials or labour. An important example
of this is a contract that adjusts for inflation. This clause shifts the burden
of increased material and labour costs from the contractor to the client. In
other words, this clause is utilized to ensure that a contract remains fair
and accommodates shifting external circumstances.
In specific terms, an escalation clause is a provision allowing for an
increase in wages or prices and has following characteristics:

•• It is inserted into contract agreement and activated under certain

conditions, viz. when the cost of living or inflation rises.
•• Escalation clauses are provisions in a contract document, that
allow for an automatic increase in wages or prices under certain
conditions.
•• It is easier for bidders to enter into large or long-term or complex
contracts without worrying for price rise or market variation during
construction stage that may potentially hurt them.
•• As the clause guarantees that market price rise is tied to inflation,
it protects landlords from missing out on higher rents and helps
property buyers to win auctions.
•• Sometimes escalation clause puts a cap on the allowed increase.

9.15.8.1 Working of Escalation Clause: Escalation clauses are

commonly championed by labour unions, who demand that wage increases
Tendering and Contract Management 217

must be linked to the rate of inflation in employment contracts. They are

also common in the business contracts of companies that supply goods or
services with costs that are prone to huge fluctuations. In construction
projects, escalation clause is invariably inserted if the period of completion
of the project is more than a specified limit (generally 24 months) as agreed
by both the parties.
A landlord while renting out his property would favour inclusion of
escalation clause in the rent or lease agreement in order not to lose out on
higher rents due to market appreciation during the rented or lease period.
To cater for such fluctuations, an escalation clause is inserted, whereby
rent can increase by a specified amount each year. Thus, the landlord can
benefit from market conditions, while the renter can secure a long-term
living arrangement.
Escalation clauses may also contain de-escalation provisions whereby a
condition is put in the contract agreement that specifies a price decrease if
there is a reduction in certain costs.
9.15.8.2: Criticism of Escalator Clauses: The use of escalation clause
in employment contracts has become controversial and has become a topic
of discussion and deliberation. Workers’ unions argue that these provisions
are necessary to protect workers against a potential loss of purchasing
power at the times of inflation. However, on the other hand, economists
claim that such clauses destabilize the economy and result in escalating the
inflation that they are created to relieve. When wages automatically keep on
rising, central banks struggle to stabilize prices. In this scenario, companies
that are not able to pass on higher prices to their customers may no longer
be able to afford to pay constantly increasing wages and, consequently, be
forced to lay off its employees. Such analysis suggests that these provisions
are self-defeating. It is stated that several countries in western Europe have
prohibited automatic wage adjustments based on concerns that they fuel
inflation.
No doubt, escalation clauses are helpful to owners because more
number of the bidders will participate in the bidding process that will lead
to a healthy competition and lower price. However, escalation clauses can
present challenges because the prices that are being submitted cannot
be guaranteed. Therefore, determining final costs of projects can be a
challenging task, which is a serious drawback of this clause.
Escalation clauses can apply to any cost that is subject to fluctuation
based on market conditions. However, in construction projects, escalation
218 Project Planning and Management with CPM & PERT

clauses are most commonly seen in conjunction with labour, fuel, steel,
and asphalt costs. It is important to note that escalation clauses are meant
to protect contractors from sharp increases that are beyond the normal
fluctuation of market prices.
9.15.9 Completion of the Contract: A contract is said to have been
completed when both parties have performed their obligations under the
agreement. In another terms the contract is said to have been executed if it
meets the technical specifications and accomplishes specific performance
within the specified time limit and the contracting party makes the payment
in full.
There may be another situation also, wherein substantial performance
is accomplished, but due to conditions beyond the control of either party,
specific performance is impossible but the contracted party has substantially
completed its obligation under the contract and is entitled to receive
payment in full, or with only minor deduction. The contract is said to have
been foreclosed with the mutual consent of both the parties.
Contract may also be regulated by agreement based on the following
conditions:

(i) Waiver: When both parties agree to waive their rights and
obligations at a specific time.
(ii) Substitute Agreement: A new contract is concluded that
replaces the original agreement.
(iii) Novation: Under this, a new party is added to the substituted
agreement.
(iv) Payment in lieu of Performance: In this system, one party
pays a negotiated amount to other party to be released from its
remaining obligations.
(v) Accord and Satisfaction: In this type, one party agrees to
accept a substitution in the obligation of the other.

9.15.10 Rescission or Cancellation of Contract: If a party fails to

perform its obligation under a contract or refuses to do so, the contract is
terminated by breach, and the injured party may be relieved of all liabilities
and obligations under the contract, while the injuring party becomes liable
for damages incurred by its failure to perform. This is termed as cancellation
or rescission of the contract.
Tendering and Contract Management 219

9.15.11 Arbitration: In execution of the projects, there is likelihood of

a conflict between the parties with regard to handing over of site for work,
quantity variation (BOQ), price escalation, decision delivery, quality of work,
timely payment and so on. Thus, there is a need to resolve the disputes by
voluntary agreement by the award of an impartial arbitrator agreed upon by
both parties.
Arbitration is a form of Alternative Dispute Resolution (ADR) and is a
way to resolve disputes outside the courts. The dispute will be decided by
one or more persons, which renders the ‘arbitration award’. An arbitration
award is legally binding on both parties and enforceable in the courts.
In choosing arbitration, the parties opt for a private dispute resolution
procedure instead of going to court. The ‘Arbitration and Conciliation Act
1996’ regulates domestic arbitration in India.
The International Chamber of Commerce–ICC–Paris is the
internationally recognized arbitration agency to settle disputes involving
global contractors.
9.15.12 Employees’ Provident Fund (EPF): The EPF scheme aims at
promoting savings to be used post-retirement or during service time by the
employees of the organisation. This is the fund contributed by the employer
and his employee regularly on monthly basis. Both the employer and
employee contribute a minimum 12% each of the employee’s salary (basic
pay + dearness allowance) to the EPF. This contribution earns a fixed rate
of interest as set by the Employees’ Provident Fund Organisation (EPFO)
and is totally free from any kind of tax on it. The accrued amount may be
withdrawn by the nominee or the legal heir of the employee post his death
or can be withdrawn by the employee post his resignation or retirement.
Any organisation employing a minimum of 20 workers is liable to give EPF
benefits to the workers.
9.15.13 Personal Protective Equipment (PPE): This refers to Personal
Protection Equipment for the workers and is the single most important safety
measure against any hazard at work place. PPE includes all equipment used
to protect employees from health and safety risks they might encounter
at work place, including injuries to lungs, head, eye, ears and skin. This
also includes the equipment required to protect the one against adverse
weather conditions and health hazard as caused by COVID-19. Therefore,
wearing task- appropriate, well fitted PPE can be a difference between life
and death in the event of an accident. Following is the list of important PPE
equipment:
220 Project Planning and Management with CPM & PERT

Head protection: Safety helmet or hard hat

Ear protection: Ear plugs, ear muffs and semi-insert/canal caps.
Foot and leg protection: Safety boots i.e. footwear with steel toecap &
steel mid-sole protection, and rigger boots, rubber boots etc.
Eye and face and protection: Safety spectacles, goggles, face screen,
face-shields and visor.
Skin protection: Gloves, gauntlets and sun screen
Protection against non-visibility: High visibility vests
Protection against fall: Safety belt, life jackets and coveralls
Protection against infectious disease: Masks, protective clothing and
other items as recommended by medical expert.
The list may be exhaustive to cover other site specific requirements
viz. immersion suits, limb and body protection, personal flotation devices,
respiratory protection and so on.

Questions
1. What is the difference between ‘security deposit’ and ‘mobilization
advance’ in a construction contract? (ESE-2014 : 4 marks)
2. Define the following terms briefly in the context of construction
contracts.
(i) Beta distribution in PERT
(ii) EPC contract
(iii) PPP
(iv) Escalation clause (ESE-2014 : (4 + 2 + 2 + 2) marks)
3. Write brief answers to the following questions (not exceeding 50 words
in each case):
(i) What is ‘escalation’ in the context of construction contracts?
(ii) What is EPF in the context of welfare measures for construction
workers?
(iii) In what kind of construction is a ‘tremie’ used?
(CSE-2017 : 5 × 3 = 15 marks)
3. Explain the different types of contracts adopted in construction.
(ESE-2019 : 20 marks)
Tendering and Contract Management 221

4. Write the full form and very briefly explain the underlined terms in
the following sentences (Not more than 20 words should be written for
each term).
(i) The DPR for the project had to be revised.
(ii) The contractor should provide appropriate PPE to the workers at
site.
(iii) Building bye- laws may permit a different FAR depending on the
use of a building.
(iv) The project is being executed under the PPP scheme.
(v) An adjustment for TDS had to be made in the final bill paid.
(CSE-2016 : 2 × 5 = 10 marks)
5. Explain briefly the highlighted terms in the following sentence (not
more than twenty words).
The contractor and the client agreed to send the matter for arbitration.
OR
The contractor was informed that his plea of force majeure for the
delay in the completion was not acceptable. (ESE-2013 : 5 marks)
6. Details of a construction project comprising of three activities are given
in the following table:
S/N Activity Unit Estimated Estimated Rate of
quantity rate per unit award
1 A M3 5000 1000 850
2 B MT 4500 4000 4200
3 C M 2
7000 5000 4800
Based on the information provided in the table, answer the following
questions:
(i) What should be the cost of the project for which an “approval” is
obtained from the competent authority before proceeding with the
advertisement for the job etc.
(ii) If at a certain point in time, the work done for the activities A, B
and C is 2700, 3000 and 4000 in the corresponding units, what is
the percentage of the financial completion of the project?
(iii) Clearly state the assumption in calculating (ii) above.
(ESE-2014 : 2 + 4 + 2 = 8 marks)
222 Project Planning and Management with CPM & PERT

7. List out advantages and disadvantages of Lump-sum contract and item

rate contract. Which type is more often used in construction contracts
and why?
8. Why is escalation clause necessary in a contract agreement? List out
its merits and demerits. Which are the important items/commodities
necessitating this clause? What is the significance of de-escalation
clause?
9. In the context of a contract agreement, define:
(i) Mobilization advance
(ii) Liquidated damages
(iii) Bonus clause
(iv) Cancellation
10. List out important PPE required for:
(i) COVID-19 type situation.
(ii) Welding work
(iii) Colour washing/painting work of a multistoried building
(iv) Laying of reinforcement bars for RCC work.
10
Construction Equipment
and Machinery

10.1 Introduction

Historically, construction work had started manually. Labourers would bring

stone, earth and wood, and prepare structures for dwelling, storage and
other purposes as required. To supplement human efforts, animals were
also used for transportation of material or push-pull of the structures.
Thereafter bullock-carts, horse-cart and similar types of arrangements
were developed by the innovative human mind to meet the actual ground
requirement. The trend continued year after year and with the industrial
revolution in the west, it accelerated with higher speed and achieved new
heights. Today, it is almost impossible to think of any construction activity
small or large, where the use of construction equipment and machinery is
not involved.
The activities involved in a large construction project, demand speedy
work with quality control and completion within allotted time. In order to
achieve this, mechanization of the work is essential, wherein construction
machinery & equipment play a pivotal role. The need for mechanization
arises due to following reasons:
•• Magnitude & complexity of the project
•• Projects involving large quantities of material handling.
•• Complexity of projects using high-grade materials
•• High-quality standards
•• Importance of keeping the time schedules, i.e. meeting timeline.
•• Optimum use of material, manpower and money.
•• Shortage of skilled and efficient manpower.
224 Project Planning and Management with CPM & PERT

Proper use of appropriate equipment and machinery contributes to

the economy, quality, safety, speed and completion of the project on time.
Thus, construction equipment and machinery are very important parts
of any construction process. It is not always desirable or possible for the
contractor or executing agency to own each and every type of construction
equipment required for the project. Considering various aspects of the
utility of a particular equipment, the contractor has to economically justify
whether to purchase the equipment or to hire it. The amount invested in
the purchase of equipment should be recovered during the useful period of
such equipment. Practically, 15–30% of the total project cost is accounted
towards equipment and machinery. It is therefore important for site
managers and construction planners to be familiar with the characteristics
and usage of the major types of equipment commonly used in construction
projects.

10.2 Selection of Equipment

The selection of construction equipment defines the construction method,

which in a way helps to determine the time and cost for the project. For
selecting the right equipment to perform a specific task at minimum cost,
it is imperative to know its features, rate of production and cost, including
the cost of operation. Therefore, selection of the most suitable construction
equipment requires a fair amount of knowledge, understanding, experience
and maturity to ensure its financial viability in meeting the technical
challenges. It needs a rational and judicious approach duly considering
the nature of project, equipment cost, depreciation value, possibility of its
future use on other projects, resale value after a certain period, benefit-cost
ratio of its use and its availability in the market within a reasonable time.
Broadly, following is the gist of such criteria:

¾¾ It should be standard, as far as possible.

¾¾ It should give the best service at minimum cost.
¾¾ Its unit cost of production should be as far as moderate.
¾¾ It should be easily repairable with a low shutdown period.
¾¾ Its spare parts should be available easily and at reasonable price.
¾¾ It should be easily disposable in the market.
¾¾ It must be suitable for most of the requirements of the work.
¾¾ It must be capable of doing more than one function i.e. multitasking
capability.
¾¾ It should be moderate in size and have fewer moving parts.
Construction Equipment and Machinery 225

10.3 Cost of Owning and Operation of Equipment

It is not always economical for a construction agency to purchase all the

equipment for the project. Rather a judicious approach duly considering
its cost, suitability for present work and future works in pipeline, and other
technical and economical criteria needs to be assessed–logically, rationally
and analytically before arriving at a final decision. Cost of possession of an
equipment is called cost of owning, to which cost of fuel for its running is
also included. Alternatively, it is the amount at which the equipment should
be hired and is generally estimated on hourly basis. This amount does not
include the operator’s cost. Essentially, following factors affect the cost of
owning and operating the equipment:

(i) Initial cost of the equipment including cost of transportation,

loading and unloading, testing and installation.
(ii) Time of use in one year which may be expressed in hours.
(iii) Severity or complexity of service condition under which it is used.
(iv) Quality and quantity of maintenance and repair.
(v) Demand of the equipment at the end of its service life i.e.
depreciation cost.
(vi) Fuel or energy cost including lubricating oil cost.
(vii) Service life of equipment.

10.4 Classification of Construction Equipment

The basic operations involved in the construction of a project are excavation,

digging of earth, hauling and moving the excavated earth to fairly long
distances and thereafter placing, levelling, grading and compacting it.
Accordingly, construction equipment can be classified broadly into four
main categories based on their purpose and use.

(i) Earth-moving equipment

(ii) Construction vehicle
(iii) Material handling equipment
(iv) Construction equipment

Various equipment under these categories are shown in table below:

226 Project Planning and Management with CPM & PERT

Table 10.1 Construction Equipment

Construction Equipment
Industry

Earthmoving Construction Material Handling Construction

Equipment Vehicle Equipment Equipment

Excavators Backhoe Dumpers Cranes Tunneling

and Handling Road
Equipment Rollers

Loaders Bulldozers
Tankers Conveyors

Concrete Hot Mix

Skid steer Mixer Plant
Trenchers Tippers
Loaders Forklifts

Road Making Stone

Motor Motor Trailers Hoists Machine Crushers
Graders scrappers
(Compactors)

Slurry
Wheeled
Crawler Pavers Seal
loading
Loader machine
shovels

Spraying and Heavy

Plastering Duty
Machine Pumps

10.4.1 Earth-moving Equipment: This is the most recognizable

construction machinery at any project site due to its requirement for
wide range of earthwork, including digging foundation, removing dirt
and boulders, grading soil, digging trenches, demolition works etc. It
is because of their size and significance that earth-moving equipment
are most widely used in the construction industry. These are complex
machines and therefore, need to be operated by trained professionals.
Owing to technological advancement in the industry, there are various
types of earth-moving machinery available in the market catering
for the need of almost every type of construction requirement.
Some of the most prominently used earth-moving equipment in construction
industry are described below:
10.4.1.1 Excavators: These heavy machines consist of a base cabin
and a long arm with a bucket attached at its end. They use a hydraulic
system to function. The operator controls the excavator from the base
cabin which is capable of rotating 360 degrees. The base cabin is placed
Some of the most prominently used earth-moving equipment in construction industry
are described below:

10.4.1.1 Excavators: These heavy machines consist of a base cabin and a long arm
Construction Equipment and Machinery 227
with a bucket attached at its end. They use a hydraulic system to function. The operator
controls the excavator from the base cabin which is capable of rotating 360 degrees.
on base
The a supporting structure
cabin is placed that maystructure
on a supporting be either
thatwith
may wheels
be eitheror tracks.
with wheelsThese
or
machines
tracks. These are widelyare
machines used in small
widely assmall
used in well as
as well
largeasconstruction project
large construction sites.
project
Their
sites. applications
Their include
applications includemultiple
multiple activities suchasas digging
activities such diggingfor
forfoundation,
foundation,
demolition
demolition of existing
of existing structures,
structures, grading, heavy
grading, landscaping, landscaping, heavy
lifting, mining, lifting,
dredging
mining, dredging etc.
etc.

Operator’s
Operator’s
Cabin
Cabin

Bucket
Bucket
attachment
attachment

Fig.10.1:
Fig. 10.1-Excavator
Excavator

A power
A shovel
power(also known
shovel as stripping
(also knownshovel or electricshovel
as stripping mining shovel) is a bucket
or electric mining
equipped
shovel)excavator machine.
is a bucket This isexcavator
equipped usually electrically
machine. powered and
This is used for
usually digging
electrically
and loading earth
powered and orused
fragmented rock including
for digging mineral extraction.
and loading earth orTechnically,
fragmentedpower
rock
including
shovel mineral
is a type extraction.
of rope cable Technically,
excavator power
wherein digging shovel
arm is is aand
controlled type of rope
powered
bycable excavator
winches and steelwherein digging
ropes, rather arm is controlled
than hydraulics andexcavators.
as in hydraulic powered
by winches
and steel ropes, rather than hydraulics as in hydraulic excavators.
There are various types of excavators in use at construction sites viz. compact
There
excavator, are excavator,
wheeled various types
crawlerof excavators
excavator, in use
drag line at construction
excavator, sites
backhoe loader,
viz. compact
bucket excavator,
wheel excavator, powerwheeled excavator,
shovel, and crawler excavator,
suction excavator. dragareline
Some of them
excavator,
described backhoe
as below; loader, bucket wheel excavator, power shovel, and
suction excavator. Some of them
10.4.1.2 Drag line Excavator: This are described
machine as its
derives below;
name from its basic
characteristic
10.4.1.2 i.e. dragging the
Dragline bucket against
Excavator: Thisthe machine
material to derives
be excavated. This is from
its name a
its basic
heavy characteristic
equipment i.e. dragging
that is generally used for the bucketat against
excavating the material
larger depth. It is used to
be to
excavated. This is a heavy equipment 262 that is generally used for excavating
at larger depth. It is used to excavate earth and load it into haul units,
such as trucks, trailors etc. or to deposit it on spoil banks and embankments
near the place from where it is excavated. Draglines are amongst the largest
mobile equipment that have ever been built on land. They weigh in the
vicinity of 2000 MT. However, specimens of draglines weighing up to 13,000
MT have also been manufactured.
Dragline has a long boom and digging bucket that is suspended from
the top of the boom through a cable. The operator lowers the bucket down
up to the material that is supposed to be excavated. Thereafter, the operator
draws the cable so that the bucket gets dragged along the ground surface
and digs into the material that is to be excavated or cleared.
excavate earth and load it into haul units, such as trucks, trailors etc. or to deposit it on
spoil banks and embankments near the place from where it is excavated. Draglines are
amongst the largest mobile equipment that have ever been built on land. They weigh in
the vicinity of 2000 MT. However, specimens of draglines weighing up to 13,000 MT
have also been manufactured.
Dragline has a long boom and digging bucket that is suspended from the top of the
boom through a cable. The operator lowers the bucket down up to the material that is
supposed to be excavated. Thereafter, the operator draws the cable so that the bucket
228 Project
gets dragged along Planning
the ground and
surface andManagement with
digs into the material thatCPM &excavated
is to be PERT
or cleared.

Hoist Hoist
cable cable

Hoist chain
Hoist chain

Crane boom
Crane boom

Dragline Drag cable

Dragline
bucket Drag cable
bucket
Fig. 10.2 - Dragline Excavator
Fig. 10.2: Dragline Excavator
This machine is especially useful for construction of ports, excavation under water and
surface mining.
This machine Additinally,useful
is especially it is used
forfor construction
sediment removalof
from water excavation
ports, bodies. Size of

under water dragline is expressed

and surface by theAdditionally,
mining. size of its bucket. The
it is advantage
used of dragline is
for sediment that it has
removal
not to go into the pit to excavate, rather, it can operate from the firm ground. Further, if
from water bodies. Size of dragline is expressed by the size of its bucket. The
advantage ofitsdragline
boom is long enough, it doesn’t require hauling unit in between as it can dispose of
is that it has not to go into the pit to excavate, rather,
the earth in one operation itself. The main disadvantage of dragline however, is that its
it can operate from the firm ground. Further, if its boom is long enough,
output is just 75 – 80% of a power shovel.
it doesn’t require hauling unit in between as it can dispose of the earth in
Draglines are of two types- i.e. crawler mounted, that can operate on soft and
one operation itself. The main disadvantage of dragline however, is that its
muddy ground surfaces and rubber – tyre – mounted , that can operate on hard surface.
output is justMaximum
75–80% of a power shovel.
speed of dragline is only a few meters per minute, as it needs to be
Draglines are for
repositioned ofeach
twostep
types-
for its i.e. crawler mounted, that can operate
operation.
on soft and muddy ground surfaces and rubber–tyre–mounted,
263 that can
operate on hard surface.
Maximum speed of dragline is only a few meters per minute, as it needs
to be repositioned for each step for its operation.
10.4.1.3 Backhoe Loaders: A backhoe loader also called a loader
backhoe, or colloquially shortened to backhoe within the construction
industry, is a heavy equipment vehicle. It consists of a tractor-like unit fitted
with a loader-style shovel/bucket at its front and a backhoe at the back. In
other words, it is a tyre mounted machine with a shovel at the front and
a bucket attached to a jointed arm at the rear end. It looks quite similar
to a farm tractor and its mobility makes it ideal for use in urban areas.
Backhoe loaders can be used for multiple applications such as excavation,
digging trenches, filling up trenches, placing pipes, lifting materials, etc.
Certain backhoe loaders come with retractable buckets which can either be
replaced with equipment used for other construction activities or buckets of
different sizes that can be used for different applications including digging
the trenches of varying width as per the requirement on ground.
Construction Equipment and Machinery 229

Backhoe
Cab
Stick
Tractor

Bucket
Boom
Stabilizer Legs Loader

Fig. 10.3: Backhoe loader

When it used to dig at moderate depth, the output of the hoe may
be as much as of a power shovel of similar size digging in similar type of
soil. However, at more depth, its output reduces significantly. Most effective
digging action of this machine occurs when the dipper stick is at right angle
to the hoe.
10.4.1.4 Clamshell: This equipment can be termed as combination of
dragline and crane wherein digging is done through the clamshell buckets
and thereafter material excavated is transported through the crane part. Its
bucket is divided into two halves which are hinged at the top. Buckets have
teeth which are helpful in digging harder type of material. Capacity of the
bucket is specified in cum.
Clamshell is especially suited for vertical lifting of materials and
is mainly used for handling loose material such as gravel, crushed stone
and sand at the site. They are also used for removing the material from
cofferdams, deep narrow excavation and pier foundations.

    
Clamshell buckets Compact clamshell
Fig. 10.4: Clamshell
A comparison of different types of excavating machines is given below:
230

Table 10.2

S/N Item/Activity of Name of equipment

comparison Power shovel Backhoe Dragline Clamshell

1 Excavation in hard soil Good Good Not suitable Poor

or rock
2 Excavation in wet soil Poor Poor Moderately good Moderately good
or mud

3 Distance between Small Small Long Long

footing and digging

4 Efficiency of loading Very good Good Moderately good Precise but slow
5 Footing required Close to work Close to pit Fairly away from pit Fairly away from pit
6 Digging level Digs at or above the Digs below the footing Digs below the footing Digs at or below the
footing level level level footing level
7 Cycle time Short Slightly more than the More than the power More than other three
power shovel shovel equipment
Project Planning and Management with CPM & PERT
Construction Equipment and Machinery 231

10.4.1.5 Bulldozer: A bulldozer is a tractor that is equipped with a large

metal plate in the front which can be moved up, down until a certain depth
or in a limited range of angles by using two hydraulic pistons attached to
it. The metal plate at its front is used to push large quantities of rubble,
boulders, pebbles, sand, soil or other such materials during construction
or conversion work at sites. At the rear side, it is equipped with a claw-
like device (also known as a ripper) that loosens the densely compacted
materials. Bulldozer is considered to be the most heavy-duty machine that
is available at a construction site. Apart from moving soil, it can also be used
for rough grading, fine grading, crushing or removing rocks, boulders etc.
Removable Exhaust pipe
projective cab 4 Cylinder
diesel engine

Fuel tank

Mould blade
Towing hook

Steel
track
shoes

Fig. 10.5: Bulldozer

It is very efficient excavating tools for short haul applications say up to

100 m distance. Bulldozer’s size is defined by the length and height of its
blade. It can be both-cable controlled or hydraulically controlled. They are
classified as below:

(a) As per position of blade angle: If the blade is set perpendicular

to the direction of movement, it is known as bulldozer. Due to
blade’s being perpendicular, it pushes the earth or rubble forward
and dumps to the specified place. However, if the blade is set at an
angle with the direction of movement, it is known as angle dozer.
With such angle, it pushes the earth or rubble forward at an angle.
(b) Based on mounting: It is both crawler mounted and wheel
mounted.

A crawler mounted bulldozer can deliver greater tractive effort on

soft, loose and muddy soil. It can operate in rocky formations where
rubber wheel tyres may get damaged. Under the tracks, eventually,
there is lower pressure due to higher contact area that helps in
efficient working.
232 Project Planning and Management with CPM & PERT

On the other hand, a wheel-mounted bulldozer has a higher

travel speed that gives greater output especially when significant
travelling is required. It can travel on bituminous road without
damaging them.
In addition to excavating and hauling work, bulldozers are used for
various other tasks at construction sites such as;

•• Clearing the roads of debris, timber, vegetation or earth.

•• Opening of roads by clearing debris of land slide especially in hilly
terrain.
•• Pulling loaded tractors and scrappers.
•• Levelling and spreading earth fills.
•• Backfilling trenches
•• Clearing construction sites of debris.

10.4.1.6 Skid-Steer Loader: A skid loader also known as skid steer or skid-
steer loader is a small rigid-frame, engine-powered machine with lift arms
that is used to attach various types of labour-saving tools or attachments.
These are tyre mounted machines which can skid on their own axis and
therefore, are suitable for use at space-constrained locations. The tread
pattern used in their tyres ensures that they have minimum impact on the
finished work or surface. These machines provide a good grip on snow and
mud as well. Most of the skid-steer loaders available in the market have
an added advantage that they can be retrofitted with different attachments
and can be used for a wide range of applications viz. moving snow or mud,
excavation work, drilling holes, lifting loads, and compacting soil etc.

   
Fig. 10.6: Skid-steer loader

10.4.1.7 Trenchers: These are earth-moving machines which are used

for digging trenches typically used for piping, cabling, sewer pipe laying,
HVAC pipelines, drainage, or in preparation for trench warfare purposes.
Construction Equipment and Machinery 233

The material dug by the machine is deposited besides the trench by its own
conveyor system. Trenchers are generally mounted either on tracks or on
wheels and can dig any type of material except rock. These machines may
range in size from walk-behind models to attachments for a skid loader,
tractor or to heavy tracked equipment.
Different types of trenchers are available in the market, which may
vary according to their applicability for construction work or the sturdiness
of the surface to be trenched. Broadly, two types of trenchers are available;
wheel type trenching machine and ladder type trenching machine.

(a) Wheel type trenching machine: These are suitable for shallow
and narrow trenches in firm soil. The excavating portion of the
machine is provided with a power driven wheel on which a number
of removable buckets are mounted. These buckets are equipped
with cutter teeth. The machine is operated by lowering the said
wheel to the desired depth while the unit moves forward slowly. The
earth is picked up by the bucket and deposited on a belt conveyor
that can be suitably adjusted to discharge the earth on either sides
of the trench or into a tractor pulled trailor unit.

  
Fig. 10.7: Trenchers

(b) Ladder type trenching machine: In this, the excavating

part of the machine has cutter buckets attached to two endless
chains that travel along the boom. As the bucket travels they
bring out the earth and deposit it on a belt conveyor that
discharges it on either sides of the trench. The depth of the cut
can be varied by adjusting the position of the boom. These types
of trenchers have considerable flexibility with regard to trench
depth and width and are therefore, suitable for deep and wide
trenches in firm soil.
234 Project Planning and Management with CPM & PERT

10.4.1.8 Graders: Graders are used in road construction and maintenance

of dirt roads and gravel roads for grading and levelling of soil layers. These
are heavy construction machines used to create smooth wide and levelled
surfaces by spreading the soil and then flattening it. The grader consist of
three axles wherein the engine and cab is situated at top, the rear axles at
one end of the vehicle and a third axle at the front side of the vehicle, with
the blade in between. This blade is used to create a flat surface during the
grading process. In civil engineering, the grader's purpose is to "finish grade"
i.e. to refine it or set it precisely to desired level. It is also used for removal
of snow, debris and earth-moving based on the location and requirement.
Sequentially, graders get to work after the heavier construction machinery -
excavators or bulldozers have finished their parts of the job.
There are two types of graders – towed graders and motorized graders.
Towed graders are pulled with tractor and are generally of small size
and power.
Motor graders, however, are powered by engine having a capacity
varying from 93–373 kW (125-500 hp) and blade width range from 2.50
m to 7.30 m. This is the most popular machinery of this class and is self
propulsive and fast moving.

  
Fig. 10.8: Graders

10.4.1.9 Scrapers: Scrappers are self operating earth-moving equipment,

designed to dig, load, haul and dispose of the material at desired location
and thereafter spread the material over the required area. Thus, it is all-
in-one equipment meeting almost all the requirements without depending
on other equipment. Therefore, sometime it is also called as ‘Carry all
Equipment’. However, it is not suited for hard rock, wet and muddy material
and sandy soil which makes its functioning difficult.
Scraper has a vertically moveable hopper (also known as bowl) at
its rear portion to hold scrapped material and is capable of tilting down
to ground for digging and collecting material or for ejecting the collected
Construction Equipment and Machinery 235

material. The bowl has a cutting edge attached at its bottom to make shallow
cut on ground. Size of scrapper is decided by the size of its bowl. The bowl
is provided with a wall at its front that opens and closes to regulate the flow
of earth. The front edge cuts into the soil and fills the hopper. Once the
hopper is full, it is raised and closed and thereafter scraper can transport its
load to the area where it is dumped. In an elevating scraper, a conveyor belt
moves material from the cutting edge into the hopper for further disposal.
Types of scraper: Scrappers are classified as below which is based on
the type of tractor used in it.
Wheel tractor scraper: For short and difficult haul
Crawler tractor scraper: For short and difficult haul
Motor scraper: It has its own engine and motoring arrangement

  
Fig. 10.9: Wheel Tractor Scrapper

10.4.2 Material Handling Equipment: Following are important

equipment for material handling at construction site.
10.4.2.1 Tower Crane: This is common equipment at any major
construction site that is used for lifting material i.e. steel, concrete, large
tools, fine and coarse aggregates and a wide range of construction materials.
Tower crane is controlled by the operator from operator’s cab. He controls
the motor that lifts the load and also controls the electronic system that
drives the drum and motor and the unit as well. A typical tower crane has
certain limitations as below:

•• Maximum unsupported height is 80 mtrs, although the height can

be increased if the crane is tied into the building as the building
rises around the crane.
•• Maximum reach of its arm is 70 mtrs
•• Maximum lifting power is 18 MT
•• Maximum counter weight is 16.3 MT
236 Project Planning and Management with CPM & PERT

  
Fig. 10.10: Tower Crane

10.4.2.2 Forklift: A forklift is a powered industrial truck used to lift

and move materials over short distances. It is a small industrial vehicle,
having a power operated forked platform attached at its front that can be
raised or lowered for insertion under a cargo to move or lift it. The lift
can move materials in both directions i.e., vertically and horizontally. It is
powered by electric battery or combustion engines. Forklifts have become
an indispensable piece of equipment in manufacturing, warehousing and
construction sites. Forklift’s forks are highly versatile and rugged tool,
designed to move bulky palletized material, liquid containers, pipes, poles,
and timbers at construction sites. Usually used in warehouses, it is operated
by a steering wheel and dashboard controls. This equipment is useful for
loading and unloading heavy packages and materials at construction site.
Some of the forklifts allow the operator to sit while driving and operating the
machine while others require the operator to stand while operating.

Capacity Plate Overhead Gurad

Mast
Cab Enclosure
Steering
Wheel Seat
Lift Cylinders
Load Backrest

Tilt Cylinder Counterweight

Carriage Power Source
Forks

Driver Chassis Load

Wheels Wheels
(Tire) (Tire)

Fig. 10.12: Forklift

Construction Equipment and Machinery 237

10.4.2.3 Telehandlers: Also known as telescopic handler, this machine

is similar to a forklift but has a long telescopic boom that can be raised,
lowered or forwarded. They are hoisting equipment used for lifting heavy
materials up to desired height or to provide construction platform for
workers at greater height. They are available in different lifting capacities
and are widely used in agriculture and construction industry. These
machines have considerable flexibility as different types of arrangements
viz. buckets, forklifts, cabins, and lifting jibs etc. can be attached to the end
of telescope boom based on the requirement of the work.

  
Fig. 10.11: Telehandlers

10.4.2.4 Belt Conveyors: A conveyor system is a mechanical handling

equipment that moves material from one location to the other in a
continuous stream. It consists of an endless chain or belt which by its
motion constitutes continuous carrying arrangement of the conveyor. It is
especially helpful when transportation of heavy bulk material is involved
and terrain is difficult. It allows quick and efficient transportation for a wide
range of material. Belt conveyors are used to transfer materials horizontally
and limited distances vertically. When the movement is along horizontally
or inclined direction, it is called as conveyor; however, if it is in vertical
direction, it is known as elevator.
Belt conveyor systems are extensively used in construction industry,
where they provide the most economical method for handling and
transportation of materials viz. cement, sand, aggregate, earth and concrete
etc. Conveyors made expressly for handling concrete are not only relatively
inexpensive but also may eliminate the need for other more expensive
auxiliary equipment such as cranes. The essential parts of a belt conveyor
system include a continuous belt, pulleys, idlers, take-up equipment and
supporting structure.
238 Project Planning and Management with CPM & PERT

 
Fig. 10.13: Belt Conveyor

Following are the main advantages of belt conveyor:

•• Minimum labour requirement.

•• Continuous and uniform flow of materials.
•• It can be used in adverse terrain including highly uneven areas and
cross- country.
•• It has a low maintenance cost with high reliability and safety.

The major shortcoming of this system is its very high initial cost,
requirement of skilled labour force and continuous supply of electric supply
for its operation.
10.4.2.5 Hoist: Hoisting is lifting a weight from one location and moving
it to another location which is at a reasonable distance. Big projects such as
construction of dam, industrial buildings etc. require hoisting equipment
for moving the items from one location to the other. Hoisting may be done
with a wide range of equipment from a small hand-operated simple screw
or hydraulic jack to modern specialized high powered cranes and elevators.
Construction Equipment and Machinery 239

Upper Sheave

Jib guy line

Jib
Hoist rope
Jib Strut
Jib back stay

Boom point Lower sheave

Hock

Hoist rope
Boom guy lines
Upper Sheave

Winding drum
Slewing platform

Outrigger

Fig. 10.14: Modern Mobile Crane

Hoisting equipment include jacks, chain hoists, winches and cranes.

Crane is the only single machine which, as a single piece, is capable of
providing three-dimensional movement of the weight i.e. in X, Y and Z
directions. Important hoisting equipment used in construction are:

•• Movable pulley
•• Rope and pulley
•• Chain hoist
•• Mobile crane
•• Electric winch
•• Tower crane
•• Overhead crane gantry girder.
240 Project Planning and Management with CPM & PERT

10.4.3 Construction Vehicles: List of construction equipment and

machinery cannot be complete without involvement of construction
vehicles which play a vital role in progressing and completing the project.
These vehicles by collecting the material, carrying it and disposing at
requisite locations complement other parallel equipment at a construction
site. Broadly, dumper, tanker, tipper and trailers fall in this category.
10.4.3.1 Trucks and Dump Trucks: Trucks serve the purpose of
handling earth, sand, aggregate, rock and other materials encountered at
the site. They provide high flexibility as their number can easily be varied
depending upon the requirement and also certain modifications can easily
be carried out in their structure to meet ground requirements. They can
be operated in almost all types of roads having adequately firm and smooth
surface and negotiable slope. Use of trucks at construction site results in
relatively low hauling cost. The trucks when equipped with mechanism
to dump their loaded material are termed as dump-trucks. These dump
trucks are used at construction sites to carry the material in larger volumes
from one location to another. Generally, at a large construction site, off-
road dump trucks are used. These off-road dump trucks have large wheels
with huge space for materials that enables them to carry huge quantity of
material in different types of ground condition. They may have dumping
facility on their rear, at bottom or on either side and accordingly they are
classified. A dump truck is also known as a dumper truck or tipper truck.
Trucks can be classified according to various parameters as below;
Type and capacity of engine – petrol or diesel of varying capacities
As per number of wheel drive – two wheel, four wheel, six wheel etc.
Method of dumping of materials – rear -dump, bottom- dump or side
–dump
Method of operation for dumping – cable operated or hydraulically
operated

  
Fig. 10.15: Dump-Trucks
Construction Equipment and Machinery 241

Rear Dump-Truck: They are provided with gate at the rear of the body
or alternatively body may have a chute like shape to facilitate dumping. They
are extensively used for transporting free flowing materials like aggregate,
gravel, ore, coal etc.
Bottom Dump-Truck: In these trucks, body of the truck remains in
the same position and discharge of the loaded material takes place through
its bottom. At the bottom, there is an arrangement for opening of two
longitudinal gates made of thick plate, resting with channel sections and
swinging on steel hinges. These trucks are useful when material is to be
spread in layers; as on roads, fill of a dam etc. The best feature of such
trucks is that material is discharged while the unit is moving, thus saving
the precious time.
Side Dump-Truck: In these trucks, body is hinged on both sides such
that they can dump the material in a long narrow stretch or on one or both
sides of the road.
10.4.4 Construction Equipment: Broadly, equipment and machinery
as described under above mentioned three categories viz. earth-moving,
material handling and construction vehicle are required for excavation and
hauling/transportation and dumping of the excavated material from the
site in addition to moving the construction material within the site. In this
section, however, certain specific equipment pertaining to a construction
project that are necessary to give final shape to the site shall be discussed.
For example, in a road construction project, following flow- chart of activities
and corresponding machinery may be of good use to readers.
242 Project Planning and Management with CPM & PERT

1. Excavator
2. Backhoe
Excavation 3. Dragline excavator
4. Bulldozer

1. Tower crane Hoisting Loading Loaders

2. Telehandlers

Transporting 1. Dump trucks

2. Tractors
3. Scrapper

Leveling Graders

Paving Paver machine

Compaction 1. Compactor
2. Rollers

Fig. 10.16: Flow chart of activities and requirement of construction equipment

Most of the equipment of this flow-chart have been discussed and

explained under abovementioned three categories. Therefore, remaining
items have been explained as below;
10.4.4.1 Pavers: A paver also known as paver finisher, asphalt finisher
and paving machine is used to lay asphalt on roads, parking lots, bridges,
and other such places. It lays the asphalt flat and provides initial minor
compaction. Thereafter, proper compaction is done by a road roller.

(a) Asphalt paving: In case of the asphalt road, the asphalt is added
from a dump truck into the paver's hopper. Thereafter, conveyor
carries the asphalt from hopper to the auger. The auger then places
a stockpile of material in front of the screed. The screed takes the
stockpile of material and spreads it over the desired area and also
provides initial compaction. The paver must provide a smooth
uniform surface behind the screed for which a free floating screed
is used. The height of the screed is controlled by several factors
viz. attack angle of the screed, material head and the towing force,
weight and vibration of the screed.
Construction Equipment and Machinery 243

To achieve the required elevation for the final grade of road, modern
paver machines use automatic screed controls that generally
control the screed's angle of attack as per the information received
from a grade sensor. Similarly, controls are also used to correct the
slope, crown or super-elevation of the finished surface. To attain a
smooth surface, the paver must move at a constant speed and have
a consistent stockpile of material in front of the screed. Increase
in material stockpile or paver speed will cause the screed to rise
resulting in excess quantity of asphalt that will make a thicker mat
of material and an uneven final surface. On the same pattern, a
decrease in material or a drop in speed will result in less quantity
and make the mat thinner.
To achieve constant speed and material supply it is desirable to use
a material transfer unit in combination with a paver. Such a unit
ensures constant material feed to the paver without any contact,
thus, providing a better end surface. However, when a dump truck
is used to fill the hopper of the paver, it can make contact with the
paver unit and cause it to change speed, thus, affecting the screed
height.
(b) Concrete paving: Large freeways are often paved with concrete
and this is done by using a slipform paver. Trucks dump the loads of
ready-mix concrete in heaps in front of the machine and thereafter
the slipform paver spreads the concrete and levels it using a screed.

 
Fig. 10.17: Paver

10.4.4.2 Compactors: Compaction is the method of artificially densifying

the material deposits or soil mass by pressing the particles together in close
contact that results in the expulsion of entrapped air and water from the
mass. With compaction, strength of the soil mass or material deposit is
enhanced to take load of the proposed structures. Compaction of the soil
mass or material deposit can be attained by exerting static or dynamic load
244 Project Planning and Management with CPM & PERT

or by shaking and vibrating the mass or by different combination of these

loads. In the market, different types of compactors are available for different
compacting purposes.
Rollers: Smooth wheel roller, sheep foot roller, pneumatic- tyred roller,
impact roller
Vibrating compactors: Manually operated vibratory plate compactor,
manually operated vibratory tamping compactors, machine operated needle
vibrator, machine operated plate vibrator.
For compacting shallow layers of soil or asphalt etc., smooth wheel
rollers are used whereas, sheep-foot rollers are used for deep compaction
purpose. Pneumatic tyred rollers, however, are used for compacting asphalt
layers, fine grained soils etc. Plate type compactors (vibrators) are used for
compacting the concrete over the surface.

  
Road roller Sheep foot roller

  
Compactor-Road roller Vibratory Plate compactor
Fig. 10.18: Different types of Compactors
Construction Equipment and Machinery 245

10.4.4.3 Concrete Batching Plant: Also known as concrete mixing plant

is the heart and soul of a construction project involving quality concrete
work in large volume. It mixes various ingredients to form concrete. Some
of these inputs include aggregate, sand, water, admixtures, silica fume, slag,
and cement. A concrete plant consists of multiple parts and accessories
including mixers, aggregate batchers, cement batchers, conveyors,
aggregate bins, admixture units, heaters, chillers, cement silos, batch plant
control system etc.
The most important part of a concrete batching plant is its mixer that
mixes the various ingredients necessary for concrete formation. There
are many types of mixers in use viz. Tilt Drum, Single Shaft, Twin shaft,
Pan and Planetary mixer. The twin shaft mixer can ensure an even and
uniform mixture of concrete with the use of high horse-power motors. The
tilt mixer offers a comparatively large batch of concrete mix. Aggregate
bins have 2 to 6 compartments for storage of aggregates – fine, coarse and
gravels of different sizes. Silos for storage of cement are typically one or two
compartments, but sometimes there are up to 4 compartments in a single
silo depending on the requirement. Conveyors are typically of 24 - 48 inch
width and carry aggregates from ground hopper to the aggregate bin, as well
as from the aggregate batcher to the charge chute.

Sketch of Concrete Mixing Plant

246 Project Planning and Management with CPM & PERT

  
Fig. 10.19: Concrete Mixing Plant

Automatic concrete plant uses control system to control the working of

the machine for which it is provided with computer aided system to achieve
fast and accurate measurement of the input constituents. With concrete
performance being dependent on accurate water measurement, this type
of system uses digital scales for cementitious materials and aggregates.
Moisture probes are used to measure water content of the aggregate as it
enters the aggregate batcher and thereafter, it automatically compensates
for the desired water/cement ratio catered for the mix design. Print out
from the computer gives the actual quantities of various ingredients used
in the concrete that can be verified and cross checked from the design mix
specified for the project. Concrete mixing plants are available in various
capacities that is specified in cum/hr.
Concrete produced from batching plant is adequately mixed,
homogeneous and appropriately meets the quality standards specified for
the project. Production of concrete from these plants is much faster than
the normal mixers and that ensures superior quality and faster speed as
well.
10.4.4.4 Feller Bunchers: Although, not exactly an equipment for
construction, but is invariably required at construction sites. It is tree
cutting heavy equipment used to remove large trees from the construction
field. This machine cuts the tree and grabs it without felling. Additionally, it
gathers all the cut down trees from the site at one place that makes the job
easier for loaders and dump trucks for further disposal.
Construction Equipment and Machinery 247

  
Fig. 10.20: Feller bunchers

10.5 Miscellaneous Equipment

Above mentioned equipment and machinery items do not form the

exhaustive list of all the required items at construction site, rather there
are much more than this, but describing all of them will take huge time
and space. However, these equipment and machinery shall be used as per
ground requirement of the project. It is not necessary that all of them shall
be used in a project, rather, it will vary as per technical requirement, their
availability, financial viability, and management’s decision to go for their use
in the project.
For the reference of readers, list of some of the important items and
equipment required for different construction projects is as below;

(a) Tunneling Equipment

¾¾ Road Headers
¾¾ Tunnel Boring Machines (TBM)

(b) Other Construction Equipment

¾¾ Dredging equipment
¾¾ Pumping equipment
¾¾ Pile boring machine
¾¾ Pile driving machine
¾¾ Drilling equipment
¾¾ Equipment used for the production of aggregate
¾¾ Equipment used in hot mix batching plant
¾¾ Material testing equipment
248 Project Planning and Management with CPM & PERT

Questions
1. What are the important criteria for classification of construction
equipment? List out the most commonly used earth-moving equipment
with their relative advantages.
2. Indicate the performance of power shovel, backhoe, dragline and clam-
shell for the following conditions in terms of very good, good, fair and
poor.
(i) Excavation in hard soil or rock
(ii) Excavation in wet soil or mud
(iii) Loading efficiency (ESE-2010 : 6 marks)
3. List the different types of equipment used for excavation work.
(ESE- 2011 : 5 marks)
4. List out the reasons for use of equipment and machinery in construction.
What are the main criteria for selection of construction equipment?
5. Describe the method of conveying materials with belt conveyors. List
the components. (ESE-2011 : 5 marks)
6. Enlist major concreting equipment required to carry out following
operations: Mixing, transportation, delivery and compacting equipment.
(ESE-2012: 4 marks)
7. Describe briefly five different types of earthwork equipment (rollers)
used for compacting soil. (ESE-2014 : 10 marks)
8. What is meant by cost of owning and operation of equipment? Which
are responsible factors for it?
9. Which equipment is also known as ‘Carry all Equipment’? What are its
limitations for use?
10. Consider the following equipment:
Dragline, Hoe, Bulldozer and Power Shovel
Which of these equipment may be used for excavation of materials and
loading them in a carrying vehicle?
11. Briefly explain the five important factors which should be considered
for selection of equipment for a construction project.
(ESE-2017 : 10 marks)
References

1. PERT and CPM Principles and Applications – By L.S. Srinath

2. Project Management for Engineering and Construction – By Garold D.
Oberlender
3. Project Planning and Control with PERT and CPM – By Dr B. C. Punmia
and K. K. Khandelwal.
4. Project Management – By Olaf Passenheim
5. Compendium of Construction Equipment – By Ministry of Railways,
RDSO Lucknow.
6. Crash with Confidence. Paper presented at Project Management Institute,
Global Conference 2009. By Kelly, Eamonn V.
7. Construction Management - By Dr. Emad Elbeltagi
8. A Guide to PMBOK – PMI Standard Committee William R. Duncan,
Director of Standards.
9. Project Management – Evolution to Solution – By Kundan Singh
10. Google information/Wikipedia
11. UPSC papers for ESE and CSAT
12. Converting Failure into Success – Construction Projects – By Kundan
Singh
13. The Arbitration and Conciliation Act, 1996
14. Short Term Training Programme on Contract Management in
Hypdropower Projects (Mar 16–20, 2020) IIT Roorkee.