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CHAPTER 8
PURCHASING ANALYSIS TOOLS AND TECHNIQUES
A network diagram also shows all tasks in progress at any given time, as well
as the dependencies between outcomes, tasks and events. Network diagrams
display individual tasks or events in a graphical manner and aid in planning
and estimating project costs; identifying milestones; and categorising task inter-
dependencies. The project manager commonly creates network diagrams with
detailed input from all team members.
Network diagrams are used to show the sequence in which work is performed.
In these diagrams, Task A is done before Task B, while Task C is done in parallel
with them. The network in the bottom half of Figure 8.4 uses activity-on-arrow
notation, in which the arrow represents the work being done and the circle
represents an event. An event is binary, i.e., it has either occurred or it has
not. An activity, on the other hand, can be partially complete. Note that this is a
special use of the word ‘event’. We speak of a football game as an event, even
though it spans time. In scheduling terminology, however, an event is a specific
point in time where something has just started or has just been finished.
The advantage of using CPM or PERT techniques is that they allow one to
predict if it is possible to meet an important project completion date and when
various tasks must be finished in order to meet that deadline. Further, one can
tell which tasks have some leeway and which do not. In fact, both CPM and
PERT determine the location of the critical path (the longest series of activities
that can’t be done in parallel) and thus govern how early the project can be
completed [4].
8.6.3 DEFINITIONS OF NETWORK TERMS
Below are the most commonly used network terms:
• Activity:
An activity always consumes time and may also consume resources.
Examples include paperwork, labour, negotiations, machinery operations and
lead times for purchased parts or equipment.
• Critical:
An activity or event that must be achieved by a certain time, having
no latitude (slack or float) whatsoever.
• Critical path:
The critical path is the longest path through a network and
determines the earliest completion of project work.
• Event:
Beginning and ending points of activities are known as events. An
event is a specific point in time. Events are commonly denoted graphically
by a circle and may carry identity nomenclature (words, numbers, alpha-
numeric codes, etc.).
• Float:
The amount of time that a task can slip without delaying the project.
Another term commonly used for float is slack.
• Milestone:
An event that represents a point in a project of special significance,
usually the completion of a major phase of the work. A project review is often
conducted at that time.
• Network:
Networks are called arrow diagrams. They provide a graphical
representation of a project plan showing the relationships of the activities [4].