Network Analysis: Part 1- Overview

This article series is aimed at students desirous of better understanding network analysis and will describe the same in some detail.

Background Information:

Project: A temporary endeavour undertaken to create a unique product or result or service. It may also be defined as a combination of interrelated activities which must be executed in a certain order for its completion. The second definition is more flexible in that it is suitable for both unique and repetitive processes.

Project Management: A distinct area of management that aids in handling projects. It has three key features that distinguish it from other forms of management:

  1. A project manager
  2. The project team
  3. The project management system

The project management system comprises

  • Organization structure
  • Information processing and decision-making
  • The procedures that facilitate integration of horizontal and vertical elements of the project organization

The project management system focuses on integrated planning and control.

Network: A visual representation of the interrelated flows of work that must be fulfilled to complete a project. It portrays the events and activities that are planned for the project and allows their sequential relationships and interdependencies. Generally, networks flow from left to right and may or may not be drawn to scale on a time-based calendar.

Essentially, a network is a graphical representation of logical and sequentially connected activities and events in a project.

Note: It may be useful to think of a network as an abstract concept that refers to various structures comprising variables (represented by nodes), and the relationships between these nodes.

Network Analysis: The general name given to certain specific techniques which can be used for the planning, management, and control of projects. Some use the term network analysis synonymously with critical path method (CPM), critical path analysis (CPA), and programme evaluation and review technique (PERT). Others denote CPM and PERT as techniques under network analysis.

Dummy activity: An activity whose sole purpose is to maintain the logical ordering of activities while following the requirements of network construction. Such an activity only indicates which activity must precede the completion of another activity in the network. No time is spent on dummy activities.

Deterministic time estimate: An estimate that is the single most likely time (required for an action/process).

Probabilistic time estimate: An estimate that is based on separate estimates of

  1. An optimistic time (a)
  2. A pessimistic time (b), and
  3. The most likely time (m)


Optimistic time = An estimate of the shortest time an activity will take (it will occur more quickly only one in hundred times)

Pessimistic time = An estimate of the longest time an activity is likely to take (it is unlikely to be completed more quickly only one in hundred times)

Most likely time = An estimate of the amount of time an activity would normally take.

The expected value (t) is calculated by using the formula

Note: Although the equation assigns the letters a, b, and m to optimistic time, pessimistic time, and most likely time, respectively, the entities may also be denoted as:

  1. The most optimistic time: to
  2. The most pessimistic time: tp
  3. The most likely time: tm

Key Messages:

The two best-known techniques for network analysis are Critical Path Method (CPM) and Programme Evaluation and Review Technique (PERT), both of which were developed between 1956-58.

CPM was developed by the du Pont Corporation as an application to a construction project. It is used to formulate a time frame for a project to determine where potential delays are most likely to occur.

PERT was developed for the US navy to schedule the research and development activities for Polaris missiles programme. Originally, it focussed only on time variables, but later incorporated cost variables also.

The striking difference between the two methods is in time estimates employed. While CPM uses deterministic time estimates, PERT uses probabilistic time estimates.

Although most differences between the two methods are now largely historical, they have been tabulated for convenience below:

OriginUS navy (military)Chemical plant (industry)
UncertaintyEstimates are uncertainDoes not permit uncertainty
NatureUsed for non-repetitive jobsUsed for repetitive jobs
Time/CostEmphasis on saving timeEmphasis on saving cost
Time estimatesThree time estimates (most optimistic time, most pessimistic time, most likely time)Single time estimate
Critical/ Dummy activitiesCritical activities not usedDummy activities not used
SuitabilitySuitable where high precision is needed in time estimatesSuitable where reasonable precision is required
Event/ActivityEvent orientedActivity oriented

There are four main stages in network analysis:

  1. Network generation
  2. Network evaluation
  3. Network monitoring
  4. Network modification

Details of network analysis in general, and CPM and PERT in particular will be described in subsequent articles.

Useful Link:

Link to a short guide on network analysis:


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