Network analysis is the method of planning and controlling projects by recording their interdependence in a diagrammatic form which enables each fundamental problem involved to be tackled separately.
A project is combination of interrelated activities which must be executed in a certain order before the entire task can be completed. An activity in a project is usually viewed as a job requiring time and resources for its completion.
image source: trainingmagazine.ae
ADVERTISEMENTS:
Until four decade ago, the best known project planning tool was Gantt bar chart which specifies the start and finish times for each activity on horizontal time scale but the disadvantage is the interdependency between different activities which cannot be determined from the bar chart.
The project management has now been evolved as a new field with the development of two analytic techniques for planning, scheduling and controlling of projects. These are the Critical Path Method (CPM) and the Project Evaluation and Review Technique (PERT).
The management of any organization involves the efficient allocation of resources. Organisations frequently get engaged in large complex projects requiring many different activities which need to be performed in order to complete the project.
Network is a pictorial representation of the interrelationship of all types of activities and has come to forefront for planning, scheduling and controlling the complex projects consisting of number of work contents.
ADVERTISEMENTS:
PERT and CPM developed independently out of research studies that were being conducted by U.S. Navy and Dupont company. PERT was an outgrowth of the U.S. Navy Polaris submarine Missile Program whereas CPM was developed for planning the construction of chemical plants.
Since then both these techniques have been successfully applied to problems involving construction of work, assembly line scheduling, maintenance operations, bid preparation and submitting of project proposals, market penetration programs, manpower planning, the planning of political campaigns, various plants expansion programmes and in military and research development programs etc.
Objectives of Network Analysis:
Followings are the main objectives of network analysis:
(a) To minimize idle resources.
ADVERTISEMENTS:
(b) To minimize the total project cost.
(c) To trade off between time and cost of project.
(d) To minimize production delays, interruptions and conflicts.
(e) To minimize the total project duration.
(a) To minimize idle resources:
Allowing for large variations in the use of limited resources may disturb the whole plan. Thus, efforts should be made to avoid the cost incurred due to idle resources.
(b) To minimize the total project cost:
The total cost of the project can be calculated and then efforts can be made to minimize the total cost by calculating the cost of delay in the completion of an activity of the project in addition to the cost of the resources required to carry out the jobs at various speeds (i.e. normal or over time rates of pay).
(c) To trade off between time and cost of project:
The idea of trade off between time and cost of project is centred on the idea that duration of same activities can be cut down if additional resources are allocated to them.
For technical reasons, the durations may not be reduced indefinitely. Similarly, there is also a most cost efficient duration called ‘normal point’ & stretching the activity beyond it may lead to a rise in direct costs.
(d) To minimize production delays, interruption and conflict:
This is achieved by identifying all activities involved in the project, their precedence constraints, etc.
(e) To minimize idle resources:
Allowing for large variations in the use of limited resources may disturb the whole plan. Thus, efforts should be made to avoid the cost incurred due to resources.