Critical Path Method and Cost Estimation in Project Scheduling

The document presents an analysis of a project management scenario focusing on schedule adjustments, cost implications, and resource allocations. The task involves determining how changes in task durations, particularly those affecting the critical path, influence overall project timelines and direct labor costs. By examining variations in required person-weeks for specific tasks and adjustments to lag times between installations, the report evaluates both increases and decreases in costs. Critical path analysis highlights tasks essential for on-time project completion, while cost estimation principles reveal how resource utilization impacts financial metrics. The findings underscore the importance of precise scheduling and resource management in optimizing project outcomes.

COIT12208
Assessment Item 2
Term 2 2017
Student Name: Student Id:
Tutor:

Part A
Question 1
The solution is saved in attached file ‘PartAQ1.mpp’.
Question 2
a. The new length of '1.1 Analysis of unique framework usefulness' is 10 days. The span of ‘1.1
Analysis of unique framework usefulness' has changed the length of project by 20 days. Prior the
project span was 314 days, which is now 294 days. This could happen on the grounds that the
change in duration of critical path activities, any adjustment in span of critical path tasks will
have effect on project duration (2020projectmanagement, 2017).
b. The cost to complete the overall project was $346,720. But after adding resources and
reducing the duration in equal proportion the overall cost remained same because after adding 2
additional resources the duration of activity is also reduced from 30 days to 10 days.
The overall solution is saved and attached herewith as ‘PartAQ2.mpp’.
Question 3
The resources over distribution issues can be settled either by including extra resources or by
deferring the exercises. In any case, the issue remains where the exercises are in critical path the
term can't be expanded so the main choices remain are to include additional resources. Yet, there
is likewise another choice accessible is to disperse the accessible resources inside the float
accessible in the activity so the general term doesn't gets affected yet the resources additionally
gets leveled with in the accessible +ve float activities.
The solution file is saved and attached herewith as ‘PartAQ3_resources.mpp’.

Question 4
To: The owner of WorkFast P/L (Mr. Chris Parsons)
From: The Project Manager
Subject: Project Highlights of ‘Family Friendly Financial Control System’
Date: 4 August 2017
Sir,
This is to notify the highlights of the project ‘Family Friendly Financial Control System’. The
highlights are as below:
a) Start date of the project is 7th August 2017
The expected completion date of the project is 17th July 2018
b) Total length of the project is 239 working days (i.e. it prohibits holidays and ends of the
week)
c) The primary factors behind the span of project are a direct result of the action groupings
in the critical path or the longest way of the time schedule. The span of the project can be
diminished by expanding the resources of the project especially for the activities in
critical path to reduce the duration of critical path that is the overall duration will
automatically get reduced.
d) The estimated direct labor costs of the project are:
Resource Name Cost
Operations $22,800.00
Analyst $80,000.00
Database $58,800.00
Software Engineers $130,200.00
Telecommunications $21,600.00
Installation Team $33,320.00
Total Direct Labor Costs $346,720.00
The updated schedule is attached herewith as file ‘PartAQ3_resources.mpp’.

Question 5
The staff shall report to me & I shall report to the owner (Mr. Chris Parsons) of Helpful
Solutions P/L. All the project management activities need to be performed by me and my team
but the overall control on the budget and cost of the project is not under me; rather it is with the
client. The purchase of any hardware need to be organized but can’t purchase. It has to be
purchased by the client as per the scope of the contract. So it is neither functional (as no other
functional manager is there) and nor projectized (as the overall control of the project is not
available with me) (Fremouw, 2017), it is a ‘Matrix Organization’.
Because in Matrix Organization, the horizontal reporting like I shall report to the owner of the
company and to my organizational boss too. This kind of double reporting structure exists in
Matric organization.
Question 6
Project Risks (Winters, 2009):
Risk
No. Risk Description Impact
Likelihood of
occurrence
(Low, Medium,
High)
Degree of
impact
(Low, Medium,
High)
1 There is a risk of non-availability
of the resources throughout the
project life cycle
The impact is high
on the project, it at
all it happens
Medium High
2 There is a risk of getting schedule
overrun because of the resource
constraints
Again the impact
would be high
Medium High

Part B
Question 1
The highlighted changes are marked in the attached file ‘PartB.mpp’
Question 2
The impact changes on duration of the schedule are as below:
Change Impact on
Project duration
By how
much
Explanation
Increase duration
from 3 person-weeks
to 6 person-weeks for
‘5.6.1’ & ‘5.6.2’
&
from 2 person-weeks
to 4 person-weeks for
‘5.6.3’
There was no
impact on the
overall duration
of the project
0 days Original end date was = 17/Jul/2018
Revised due to 5.6.1 = -NIL-
Revised due to 5.6.2 = -NIL-
Revised due to 5.6.3 = - NIL-
Since the activity 5.6.1, 5.6.2 and 5.6.3
was not in the critical path (Stelth, 2009)
and the float was available more than the
increased duration, so there was no
change in the overall duration of the
project.
Allocation of
additional DB to
task ‘5.6.1’, ‘5.6.2’
& ‘5.6.3’
There was no
impact on the
overall duration
of the project.
But the individual
durations of task
5.6.1, 5.6.2 &
5.6.3 got reduced
0 days The duration of 5.6.1 & 5.6.2 became 15
from 30 & the duration of 5.6.3 became
10 from 20 because the additional DB
absorbed the extra job of old DB and
shared the % of volume equally
Increase duration
from 1 person-week
to 2 person-weeks for
3.4
There was no
impact on the
overall duration
of the project
0 days Original end date was = 17/Jul/2018
Revised due to 3.4 = -NIL-
Since the float available in 3.4 was more
than the increased duration, it didn’t
impacted the overall duration of the

project.
Reduction in time
between first to
second installation
from 6 person-weeks
to 4 person-weeks
Duration
decreased
10 days The overall duration for the project
decreased from 239 days to 229 days.
Since both the activities ‘6.2 Installation
at first new store’ and ‘6.3 Installation at
second new store’ are in critical path, so
the reduction in the duration of link or
lag has directly reduced the overall
duration of the project.
Question 3
The impact changes on cost of the schedule are as below:
Change Impact on
Direct Labor
Costs
By how
much
Explanation
Change in person-
weeks required for
tasks 5.6.1-5.6.3
Cost increased $380,32
0 -
$346,72
0 =
$33,600
Budgeted Cost to Complete = $346,720
Revised due to 5.6.1 = $359,320
Revised due to 5.6.2 = $371,920
Revised due to 5.6.3 = $380,320
Due to increase in duration the resource
usage also increases, and the cost is
directly proportional to the use of
resources (Pmbook, 2017), so the cost
increased.
Allocation of
additional DB to task
5.6.1, 5.6.2 & 5.6.3
No Change $0 Budget did not changed from $380,320
as the additional DB has reduced the
duration by 50% so the increased cost of
additional DB has been countered by the
reduction of duration

Change in person-
weeks required for
task 3.4
Cost increased $383,92
0 -
$380,32
0 =
$3,600
Overall cost before change in 3.4 =
$380,320
But after the duration increased by 2
person-weeks because of the duration of
resource usage the cost of the project
also got increased
Reduction in time
between first to
second installation
from 6 person-weeks
to 4 person-weeks
No Change $0 Overall cost before change in duration
of lag = $383,920 & now also same.
This happened because we changed the
lag duration not the duration of any
activity & lag (Usmani, 2017) don’t
need any resource either to increase or
decrease, it is just a representation of the
relationship between the activities.
References:
2020projectmanagement, 2017. What is the Critical Path? [Online] Available at:
http://2020projectmanagement.com/2014/05/what-is-the-critical-path/ [Accessed 29 July 2017].
Fremouw, B., 2017. Functional Organizations vs Projectized Organizations. [Online] Passionate Project
Management Available at: https://www.passionatepm.com/blog/functional-organizations-versus-
projectized-organizations-pmp-concept-10 [Accessed 23 September 2017].
Pmbook, 2017. 5. Cost Estimation. [Online] Available at:
http://pmbook.ce.cmu.edu/05_Cost_Estimation.html [Accessed 23 September 2017].
Stelth, P., 2009. Projects’ Analysis through CPM (Critical Path Method). School of Doctoral Studies
(European Union) Journal, pp.10-51.
Usmani, F., 2017. Lead Time and Lag Time in Project Scheduling Network Diagram. [Online] PM Study
Circle Available at: https://pmstudycircle.com/2013/02/lead-time-and-lag-time-in-project-scheduling-
network-diagram/ [Accessed 23 September 2017].
Winters, L., 2009. Deadliest catch: risk identification in the vast Bering Sea. In PMI® Global Congress
2009. North America, Orlando, 2009.