pinto pm2 ism ch10

INSTRUCTOR’S RESOURCE MANUAL

CHAPTER TENProject Scheduling: Lagging, Crashing, and Activity Networks

To Accompany

PROJECT MANAGEMENT: Achieving Competitive Advantage

ByJeffrey K. Pinto

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

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CHAPTER 10

PROJECT FOCUS – A Crushing Issue: How to Destroy Brand New Cars

INTRODUCTION

10.1 LAGS IN PRECEDENCE RELATIONSHIPS

Finish to Start

Finish to Finish

Start to Start

Start to Finish

10.2 GANTT CHARTS

Adding Resources to Gantt Charts

Incorporating Lags in Gantt Charts

PROJECT MANAGERS IN PRACTICE – Major Julia Sweet, USAF

10.3 CRASHING PROJECTS

Options for Accelerating Activities

10.4 ACTIVITY ON ARROW NETWORKS

How are the Different?

Dummy Activities

Forward and Backward Passes with AOA Networks

AOA versus AON

10.5 CONTROVERSIES IN THE USE OF NETWORKS

Conclusions

Summary

Key Terms

Solved Problems

Discussion Questions

Problems

Integrated Project: Developing the Project Schedule

Case Study 10.1 – Project Scheduling at Blanque Cheque Construction (A)

Case Study 10.2 – Project Scheduling at Blanque Cheque Construction (B)

MSProject Exercises


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PMP Certification Sample Questions

Bibliography


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TRANSPARENCIES

10.1 NETWORK INCOPORATING FINISH TO START LAG OF 4 DAYS

Lag 4


0 A 6Spec Design

6

6 B 11Design Check

5

15 C 22Blueprinting

7

4

10.2 FINISH TO FINISH NETWORK RELATIONSHIP


30 R 36Wiring

6

36 U 42Interior Const.

6

31 S 33Plumbing

2

33 T 36HVAC

3

5

10.3 START TO START NETWORK RELATIONSHIP

3 days


30 R 36Wiring

6

36 U 42Interior Const.

6

31 S 33Plumbing

2

33 T 36HVAC

3

6

10.4 START TO FINISH NETWORK RELATIONSHIP

3 days


20 W 26

6

23 Z 29

6

18 X 20

2

20 Y 23

3

7

10.5 BENEFITS OF GANTT CHARTS

1) They are very easy to read and comprehend

2) They identify the project network coupled with its schedule baseline

3) They allow for updating and project control

4) They are useful for identifying resource needs and assigning

resources to tasks

5) They are easy to create


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10.6 SAMPLE GANTT CHART

Microsoft product screen shot(s) reprinted with permission from Microsoft Corporation.


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10.7 SAMPLE TRACKING GANTT CHART WITH CRITICAL PATH A-C-D-F-H



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10.8 GANTT CHART WITH RESOURCES IDENTIFIED FOR EACH TASK



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10.9 CRASHING PROJECTS – UNDER WHAT CONDITIONS?

1. The initial schedule may be too optimistic.

2. Market needs change and the project is in demand earlier than

anticipated.

3. The project has slipped considerably behind schedule.

4. The contractual situation provides even more incentive to avoid

schedule slippage.


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10.10 TIME-COST TRADEOFFS FOR CRASHING ACTIVITIES


Cost

Activity Duration

Normal

Crashed

Crashed Normal

CrashPoint

NormalPoint

Cost

Activity Duration

Normal

Crashed

Crashed Normal

CrashPoint

NormalPoint

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10.11 CRASHING ACTIVITIES – AN EXAMPLE

Formula Slope = crash cost – normal cost

normal time – crash time

Example – Calculating the Cost of Crashing

SUPPOSE:

NORMAL ACTIVITY DURATION = 8 WEEKS

NORMAL COST = $14,000

CRASHED ACTIVITY DURATION = 5 WEEKS

CRASHED COST = $23,000

THE ACTIVITY COST SLOPE =

23,000 – 14,000 or, $9,000 = $3,000 per week

8 – 5 3


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10.12 SAMPLE AOA NETWORK DIAGRAM


1 2

3

4

A

B

C

111 2

3

4

A

B

C

222

333

444

A

B

C

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10.13 PARTIAL AOA NETWORK ILLUSTRATING DUMMY ACTIVITIES


1A

B

C2

3

4

1A

B

C2

3

4

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DISCUSSION QUESTIONS

1. Please give examples of circumstances in which a project would employ lag

relationships between activities using:

a. Finish to start

b. Finish to finish

c. Start to start

d. Start to finish

a. Finish to start: In home construction, plaster is applied to walls (activity A) before

they are painted (activity B). The plaster has to dry before the walls can be painted. This

creates a lag of one day between the finish of activity A and the start of activity B.

b. Finish to finish: A contractor may want the gas line and plumbing to be completed at

the same time so that appliances can be installed in a kitchen. In this case, he/she may

delay installation of a gas line (activity A) so that it will be completed at the same time as

the plumbing (activity B). This creates a lag prior to the start of activity A so that A and

B will finish on the same day.

c. Start to start: A contractor may elicit RFQs from subcontractors (activity B) while

blueprints are still being fine tuned (activity A). This creates a lag between the start of

activity A and the start of activity B.

d. Start to finish: Workers can begin putting up shower molding (activity A), but the

work cannot be finished until installation of the shower head and faucet begins (activity

B).


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2. The advantage of Gantt charts lies in their linkage to the project schedule baseline.

Explain this concept.

Because they are tied to the project schedule, Gantt charts allow project teams to track a

project’s actual progress with the project’s planned progression. They create an easy

reference for project teams that alert members to variance from the schedule baseline and

the impact of the variance on the project network. Delays in one activity may create

delays in subsequent activities. Here, Gantt charts can be used to update the baseline.

Their depiction of variances from the baseline makes Gantt charts a useful project control

tool by allowing the PM to identify problems that may jeopardize the team’s ability to

meet project milestones.

3. What are the advantages in the use of Gantt charts over PERT diagrams? In what

ways might PERT diagrams be advantageous?

Gantt charts display the project baseline. Each activity can then easily be referenced at

any point during the project to see if progress is on target. Gantt charts are also more

useful because the use of resources can be added to the charts. Finally, Gantt Charts are

visually appealing and easily understandable. PERT diagrams offer a means to convey

complex network relationships more completely and make the identification of

predecessor and successor relationships easy to recognize.

4. Under what circumstances might you wish to crash a project?

Crashing may be desirable if initial time estimates are inaccurate, the project falls behind

schedule or the project completion date is moved up. In these cases, the project cannot be

completed on time given the original schedule. Crashing would expedite the

project/activities to meet new completion dates. Another scenario occurs when late fees


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or penalties may be incurred. It may be more cost effect to crash activities than to pay

the additional fees.

5. In crashing a project, we routinely focus on those activities that lie on the critical path,

not activities with slack time. Explain why this is the case.

The critical path is the longest path through the network. Crashing activities on the

critical path reduces the overall project duration time. Crashing activities outside of the

CP (those with slack time) will increase overall costs, but only reduce the time to

complete that single activity, not the overall time of the project. Therefore, it is more

efficient, when trying to expedite the entire project, to crash activities that lie on the CP.

6. What are some of the advantages in the use of AOA notation as opposed to AON?

Under what circumstances does it seem better to apply AON methodology in network

development?

Advantages of the AOA notation include its prevalence in some specialized business

fields, its clearer depiction of complex projects and event nodes/milestones in AOA are

easier to identify. The AON methodology is more suitable when there are several merge

points within the network. Merges make AOA notation convoluted (requiring the use of

dummy activities) due to tasks being listed on arrows connecting activities in the

diagram. AON is also more applicable when computer scheduling is desired because

AON notation is used in most PM computer software packages.

7. Explain the concept of a “dummy variable.” Why are they employed in AOA

notation? Why is there no need to use dummy variables in an AON network?


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Dummy variables are arrows used in AOA notation to establish precedent relationships

between activities. There are no durations or work description assigned to the arrows;

they are simply used to indicate relationships. AOA requires the use of dummy variables

because arrows cannot be used to connect two predecessors to one successor activity.

Meaning if A and B are predecessors to C, there is no way, without dummy variables, to

connect the dual predecessors to C. AON does not use dummy variables because arrows

are used to indicate relationships between activities. If multiple predecessors exist, then

multiple lines will be used to connect A and B (or as many activities as needed) to C.

8. Please identify and discuss some of the problems or dangers in using project networks.

Under what circumstances can they be beneficial and when can they be dangerous?

One problem is that complex project may make networks meaningless. Project may be

stretched out over several years making a traditional network diagram to complex to use.

There is also the danger that information in the network may be incorrect or

oversimplified leading to errors in its use downstream. Networks may also be

misapplied. Companies may try to employ networks where they are unsuitable (i.e.

scheduling problems outside of project management). Caution must be taken when using

networks in a situation where multiple sub-contractors are employed. Sub-contractors

need to be informed of other scheduling (i.e. other sub-contractors) taking place in the

project. Otherwise, independent networks for each sub-contractor will exist and these

networks may conflict with one another. Lastly, optimism in time estimates may create

faulty network construction. Though there are several potential dangers inherent in

project networks, they can be extremely beneficial to project teams. Networks visually

depict what needs to be done, when it needs to be started and completed and how one

activity affects other activities within the project. This visual map can be very helpful in

making sense of complex project plans.


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CASE STUDIES

Case Study 10.1 – Project Scheduling at Blanque Cheque Construction (A)

The general nature of the project, developing a strip mall with four stores of roughly

equal size, is intended to challenge students to identify a variety of activities necessary to

accomplish the project. The first step is to create a simple WBS of the various project

activities and deliverables that will be required. Instructors can decide in advance how

much detail they want students to go into for this assignment; for example, they may wish

to leave all elements at the Deliverable level and not get down to specific Work

Packages.

Questions:

a. Develop a project network consisting of at least 20 steps that should be

done to complete the project. As the case suggests, keep the level of detail for

these activities general, rather than specific. Be sure to indicate some degree of

precedence relationship among the activities.

As with the above explanation, the key here is to have students first identify some of the

activities (or Deliverables) for this construction project. The instructor may wish to work

with the students, offering some prompts in the cases where people are unsure what

actually goes into a mall development. After 20 steps are identified, challenge the

students to create a simple activity network with precedence ordering of the steps. This

step in the activity works well as a group exercise where students can bounce their ideas

off each other and challenge basic assumptions about precedence ordering.

b. Suppose you now wanted to calculate duration estimates for these

activities. How would you make use of the following approaches? Are

some more useful than others?

i. Expert opinion


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ii. Past history

iii. Mathematical derivation

In answering this question, students can first be assigned to create a duration estimation

table using Beta distributions. Brain storming will allow them to identify reasonable

worst, most likely, and best case scenarios for each activity duration. Then, they can

answer the question regarding the use of expert optinion, past history, or mathematical

derivation by showing how each could be applied to duration estimation. Instructors can

challenge each of these points, arguing that expert opinion is just that, the experience of

experts, not us. Likewise, they can point out that historical estimates may work or

intervening issues may have come up that make historical parameters unduly pessimistic

or optimistic (e.g., the loss of regional suppliers makes it harder and lengthens the time to

identify and contract for project logistics).

c. Joe was trying to decide which scheduling format to employ for his

planning: AON or AOA. What are some of the issues that Joe should first

consider prior to choosing between these methods?

The chapter identifies a number of issues that serve to help determine whether to use

AON or AOA notation. Specifically:

The benefits of AON are centered primarily in the fact that it has becomes the most

popular format for computer software packages, such as MS Project. Hence, as more and

more companies use software-based project scheduling software, they are increasingly

using the AON method for network diagrams. The other benefits of AON are to place

the activity within a node and use arrows merely as connection devices, thereby

simplifying the network labeling. This convention makes AON networks very easy to

read and comprehend, even for novice project managers. The primary drawback with

AON networks occurs when the project is very complex, with numerous paths through

the model. The sheer number of arrows and node connections when multiple project

activities are merging or bursting can make AON networks difficult to read.


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On the other hand, AOA modeling’s greatest benefit lies in its accepted use in certain

business fields, such as construction, where AON networks have not yet made significant

inroads. Also, in the cases of large, complex projects it is often easier to employ the path

process used in AOA. Finally, because the activity and node system is used, for projects

that have many significant milestones, such as supplier deliveries, AOA event nodes are

very easy to identify and flag. On the other hand, there is no question that some

conventions in AOA diagramming are awkward; most particularly, the use of dummy

activities. Dummy activities are not a simple concept to master and require more training

on the part of novice project managers to be able to use them easily. Finally, AOA

networks can be “information intensive” in that both arrows and nodes contain some

important project information. Rather than centralizing all data into a node, as in the

AON convention, AOA networks use both arrow and nodes to label the network.

Case Study 10.2 – Project Scheduling at Blanque Cheque Construction (B)

This case identifies a situation in which the project manager is facing a late project with

serious consequences as a result. He is trying to decide whether or not to crash activities

from this point to the end of the project and the focus is intended to make students

understand the benefits and drawbacks of crashing. Because it should not be done

without serious consideration of the escalating costs, crashing a project typically comes

down to a benefits and drawbacks analysis, such as is the case here.

Questions:

1. What are some of the issues that weigh in favor of and against crashing the

project?

Crashing must be considered in light of a number of factors, principally the penalties that

the contractor will be forced to absorb should the project be late. In this case, the


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decision is based on the fact that top management has informed the project manager that

he has some discretionary money to spend but the project cannot be late, suggesting that

crashing makes good sense.

2. Suppose you were the site supervisor for this project. How would you advise Joe

to proceed? Before deciding whether or not to crash the project, what questions

should you consider and how should you evaluate your options?

Among the important questions to ask is the critical one: will crashing thee activities get

us back on track? There is no point in crashing non-critical activities, nor should it be

done if the net effect is only to spend money but not to complete the project within the

necessary time period. Thus, the “dollar-day” choices have to be clear enough to warrant

the decision to crash remaining activities. In this project case, most students will

recommend crashing the activities as it is a relatively cost-free exercise for the project

manager (i.e., he has discretionary money and has calculated that crashing remaining

activities will bring them close to the project deadline for completion). Instructors can

use this scenario with real data to demonstrate how to prioritize activities for crashing.


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PROBLEMS

1.1. Please develop the network activity chart and identify the Please develop the network activity chart and identify the

critical path for a project based on the following information. critical path for a project based on the following information. Draw the activity Draw the activity

network as a Gantt chart using MSProjectnetwork as a Gantt chart using MSProject. What is the expected duration of the . What is the expected duration of the

project?project?

ActivityActivity Expected DurationExpected Duration PredecessorsPredecessors

AA 5 days5 days ----

BB 10 days10 days AA

CC 8 days8 days AA

DD 1 day1 day AA

EE 5 days5 days B, CB, C

FF 10 days10 days D, ED, E

GG 14 days14 days FF

HH 3 days3 days GG

II 12 days12 days FF

JJ 6 days6 days H, IH, I


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SOLUTION:SOLUTION:


Expected duration of the project can be found by adding the lengths of the linked paths. In this case, it is 53 days.


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2. Consider a project with the following information.

Construct the project activity network using AOA methodology and label each

node and arrow appropriately. Identify all dummy activities required to complete

the network.

Activity Duration Predecessors

A 3 --

B 5 A

C 7 A

D 3 B, C

E 5 B

F 4 D

G 2 C

H 5 E, F, G

Activity Duration ES EF LS LF Slack

A 3 0 3 0 3 --

B 5 3 8 5 10 2

C 7 3 10 3 10 --

D 3 10 13 10 13 --

E 5 8 13 12 17 4

F 4 13 17 13 17 --

G 2 10 12 15 17 5

H 5 17 22 17 22 --


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SOLUTION:


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3. You are considering the decision of whether or not to crash your project. After

asking your operations manager to conduct an analysis, you have determined the

“pre-crash” and “post-crash” activity durations and costs, shown in the table

below:

Normal Crashed

Activity Duration Cost Duration Cost

A 4 days $1,000 3 days $2,000

B 5 days $2,500 3 days $5,000

C 3 days $750 2 days $1,200

D 7 days $3,500 5 days $5,000

E 2 days $500 1 day $2,000

F 5 days $2,000 4 days $3,000

G 9 days $4,500 7 days $6,300

a. Calculate the per day costs for crashing each activity

b. Which are the most attractive candidates for crashing? Why?

c. Calculate project costs by project duration. At what point does it no longer

make “cost sense” to continue crashing activities? Why? Show your

graph.


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SOLUTION:

a. Applying the formula for crashing, the per day costs for crashing each activity is:

Activity Per Day Cost

A $1,000

B $1,250

C $450

D $750

E $1,500

F $1,000

G $900

b. The most attractive candidates for crashing (assuming we know nothing of critical

activities) are those with the lowest per day cost to crash. In this case, we would crash

the activities in order: C, D, G, A and F, B, E.

c. In solving for this question, it is important to remember that all activities are

considered to be on the critical path. Thus, there is no reason to exclude certain activities

from crashing because they are not critical. We can create a table of activities crashed,

total project length, and total costs as follows:


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Activity Crashed Duration Total Costs

Normal (none crashed) 35 days $14,750

C 34 15,200

D 32 16,700

G 30 18,500

A 29 19,500

F 28 20,500

B 26 23,000

E (All crashed) 25 24,500


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4. When deciding on whether or not to crash project activities, a project manager

was faced with the following information. Activities of the critical path are

highlighted with an asterisk:

Normal Crashed

Activity Cost Duration Extra Cost Duration

A 5,000 4 weeks 4,000 3 weeks

B* 10,000 5 weeks 3,000 4 weeks

C 3,500 2 weeks 3,500 1 week

D* 4,500 6 weeks 4,000 4 weeks

E* 1,500 3 weeks 2,500 2 weeks

F 7,500 8 weeks 5,000 7 weeks

G* 3,000 7 weeks 2,500 6 weeks

H 2,500 6 weeks 3,000 5 weeks

a. Identify the sequencing of the activities to be crashed in the first

four steps. Which of the critical activities should be crashed first?

Why?

b. What is the project’s critical path? After four iterations involving

crashing project activities, what has the critical path shrunk to?

c. Suppose project overhead costs accrued at a fixed rate of $500 per

week. Chart the decline in direct costs over the project life relative

to the increase in overhead expenses.

d. Assume that a project penalty clause kicks in after 19 weeks. The

penalty charged is $5,000 per week after 19 weeks. When the


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penalty charges are added, what does the total project cost curve

look like? Develop a table listing the costs accruing on a per week

basis.

e. If there were no penalty payments accruing to the project, would it

make sense to crash any project activities? Show your work.


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SOLUTION:

a) The correct sequence for crashing activities is listed as:

1. Activity E or G (they both cost $2,500 more)

2. Activity E or G

3. Activity B

4. Activity D

Following this order assumes that activities are crashed in order of their cost.

b) The project’s critical path is B-D-E-G, or 21 weeks. After four

iterations of crashing project activities, the critical path baseline

has shrunk to 16 weeks.

c) The chart showing the decline in costs relative to the increase in

overhead expenses would resemble the following:

Duration Direct Costs Penalties Overhead Total

21 weeks 37,500 10,000 10,500 58,000

20 weeks 40,000 5,000 10,000 55,000

19 weeks 42,500 - 0 - 9,500 52,000

18 weeks 45,500 - 0 - 9,000 54,000

16 weeks 49,500 - 0 - 8,000 56,500


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60

50 Total costs

40 Direct costsCost (thousands)

30

20

Overhead

10 Penalty

10 12 14 16 18 20 22

Schedule Baseline (Weeks)

d) Also shown on the figure above.

e) If no penalties kicked in, there would not be a cost basis for

crashing the project. It may still be appropriate given other

project information; however, direct costs decline proportionally

to increase in overhead expenses, suggesting no reason to crash

the project from a cost perspective.


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MSProject EXERCISES

Problem 10.1

Suppose we have a complete activity predecessor table (shown below) and we wish to

create a Network diagram highlighting the activity sequence for this project. Using

MSProject, enter the activities, their durations, and their predecessors for Activities A

through E. Note that all duration times are in days.

Project - Remodeling an Appliance

Activity Duration Predecessors

A. Conduct competitive analysis 3 -

B. Review field sales reports 2 -

C. Conduct tech capabilities assessment 5 -

D. Develop focus group data 2 A, B, C

E. Conduct telephone surveys 3 D

F. Identify relevant specification improvements 3 E

G. Interface with Marketing staff 1 F

H. Develop engineering specifications 5 G

I. Check and debug designs 4 H

J. Develop testing protocol 3 G

K. Identify critical performance levels 2 J

L. Assess and modify product components 6 I, K

M. Conduct capabilities assessment 12 L

N. Identify selection criteria 3 M

O. Develop RFQ 4 M

P. Develop production master schedule 5 N, O

Q. Liaison with Sales staff 1 P

R. Prepare product launch 3 Q


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Solution:

Entering the five Activities and their predecessors, the partial Gantt chart should look

like the following:



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Problem 10.2

Now, continue developing your Gantt chart with the rest of the information contained in

the table above and create a complete activity Network diagram for this project.

Solution:



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Problem 10.3

Identify the critical path for this project. How can you tell? (Hint: Click on the “Tracking

Gantt” option.)

Solution:

The tracking Gantt chart automatically highlights (in red) the critical activities within the

network. Thus, following the MSProject output below, we can determine that the critical

path for this project is



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Problem 10.4

Suppose that we wished to incorporate lag relationships into our activity network.

Consider the table shown below and the lag relationships noted. Develop an MSProject

Gantt chart that demonstrates these lags.

Activity Duration Predecessor Relationship

A. Wiring 6 None

B. Plumbing 2 None

C. HVAC 3 Wiring (Finish-to-Start),

Plumbing (Finish-to-Finish)

D. Interior construction 6 HVAC (Start-to-Start)

Solution:



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pinto pm2 ism ch10

Documents

project network

finish network relationship

network incoporating

project focus

project management

project control

gantt charts project

crashing activities