NETWORK ANALYSIS

AND QUANTITATIVE
TECHNIQUES

Presented by:-
Nilesh Patil ( MBA- BT-09005)
Priti Verma ( MBA- BT-09007)
Rohini Choraghe ( MBA- BT-09008)
Anjali Gupta ( MBA- BT-09006)
Sreelaxmi Iyer (MBA-BT-09012)
 Project management
Project management is process of managing ,allocating
& timing resources to achieve a given goal in an efficient and
expedient manner.

EX:1)Painting a small and vacant room.

2)launching a space shuttle.

Nilesh Patil
( MBA- BT-09005)
Steps in project management
problem identification

definition

planning

organizing

recourse allocation

scheduling

Tracking and allocation

project control

project phase out

Network Analysis

Network analysis is general name given to certain

specific technique which can for the planning
management & control projects.

Nilesh Patil
( MBA- BT-09005)
There are two methods of representing any project in network
form:

1) Activities on arrow diagram (AOA)

2) Activities on node diagram (AON)

Nilesh Patil
( MBA- BT-09005)
Rule for network construction
1)unique starting node (tail event)
2)unique completion node (head node)
3)no two activities have same starting and ending node
4)Dummy activity is an imaginary activity indicating
precedence relationship only and its duration is Zero

Nilesh Patil
( MBA- BT-09005)
precedence relationship:

A D
1 2 3 4

Nilesh Patil
( MBA- BT-09005)
Technique for PM

1)Critical path method (CPM)

2)Program evaluation& review tech (PERT)

Nilesh Patil
( MBA- BT-09005)
 CPM

Developed by E.I.Du.Pont.

J
8 9

G K
H
I 10
A B
1 2 5 L
7
C
D2 11
D 3 F
M
D1 A
4 6 12
Nilesh Patil
( MBA- BT-09005)
PERT
(PROGRAMME EVALUATION AND
REVIEW TECHNIQUES)

Rohini P. Choraghe
BT-09008
 It was developed by Bill Pocock of Booz Allen Hamilton and
Gordon Perhson of the U.S. Navy Special Projects Office in
1957
 allows for randomness in activity completion times.

 used when time, rather than cost, is the major factor

 E.G. the 1968 Winter Olympics

Rohini P. Choraghe
BT-09008
TERMINOLOGIES
 Events
 Activities

 Optimistic time (O)

 Pessimistic time (P)

 Most likely time (M)

 Expected time (TE): TE = (O + 4M + P) ÷ 6

 Variance in critical activity(б2)=((P-O) ÷ 6) 2

 Float

Rohini P. Choraghe
BT-09008
STEPS IN THE PERT PLANNING PROCESS

 Identify the specific activities and milestones

 Determine the proper sequence of the activities.

 Construct a network diagram.

 Estimate the time required for each activity.

 Determine the critical path.

 Update the PERT chart as the project progresses.

Rohini P. Choraghe
BT-09008
ADVANTAGES
 It forces manger to plan
 It concentrates on critical activates

 It helps in knowing what is the Probability of completion

before a specified date.
 PERT facilitates identification of early start, late start,
and slack for each activity.
 PERT provides for potentially reduced project duration

 The large amount of project data can be organized &

presented in diagram for use in decision making.

Rohini P. Choraghe
BT-09008
LIMITATIONS
 PERT is not practicable in routine planning of
recruitment events
 It emphasizes on time not on cost.

 PERT does not consider the resources required at various

stages

Rohini P. Choraghe
BT-09008
EXAMPLE
Time required (days)
Name of the
Activity
activity Optimistic Most likely pessimistic

1-2 A 6 6 24
1-3 B 6 12 18
1-4 C 12 12 30
2-5 D 6 6 6
3-5 E 12 30 48
4-6 F 12 30 42
5-6 G 18 30 54
Rohini P. Choraghe
BT-09008
 What is expected duration and variance for each activity
 What is expected project length

 What is variance and standard deviation of the project

length
 What is probability of completing critical path within 80
days?

Rohini P. Choraghe
BT-09008
 Expected duration Variance
Name of the activity
TE = (O + 4M + P) ÷ 6 (б2)=((P-O) ÷ 6) 2

A 9 9
B 12 4
C 15 9
D 6 0
E 30 36

F 29 25

G 32 36

Rohini P. Choraghe
BT-09008
 So we get longest path :
B- E- G requiring 12+30+32=74 days
 So variance in critical path is ce standard deviation б2
BEG= 4+36+36= 76 DAYS
 Hence we get standard deviation of project length as
square root of 76= 8.72 days

Rohini P. Choraghe
BT-09008
Probability of completing critical path within 80 days is (z)
=
(time under consideration – length of critical path)/
standard deviation of critical path
=80-74/8.72= o.688
The value from cumulative normal distribution table is
0.7549

Rohini P. Choraghe
BT-09008
CRASHING OF PROJECT
 a method for shortening project duration by reducing the
time of activities. This reduction in the normal activity
times is referred to as crashing.
 Crashing is achieved by devoting more resources,
measured in terms of money, to the activities to be
crashed.
 Project crashing shortens the project time by reducing
critical activity times at a cost.

Rohini P. Choraghe
BT-09008
Rohini P. Choraghe
BT-09008
QUANLITATIVE TECHNIQUES
Quantitative techniques are those statistical and operations
research techniques which help in decision making
process specially concerning business and industry.

They can be broadly be put under two groups:

1. Statistical techniques

2. Programming techniques

Priti Verma
(Bt-09007)
STATISTICAL TECHNIQUES

 Regression analysis- Regression analysis examines the

past trends of relation between one variable.

 Correlation analysis- measure the closeness of such

relationship.

Priti Verma
(Bt-09007)
 Time series analysis- this technique is of considerable
significance in the field of short term and long term
business forecasting.

 Ratio analysis- ration analysis as applied to business is a

part of whole process of analysis of financial statements
of business.

Priti Verma
(Bt-09007)
 Sampling technique-

Sampling is that part of statistical practice concerned

with the selection of a subset of individual observations
within a population of individuals intended to yield some
knowledge about the population of concern, especially
for the purposes of making predictions based on
statistical inference.

Sreelaxmi Iyer
BT-09012
WHAT EXACTLY IS A “SAMPLE”?

A
A subset
subset ofof the
the population,
population, selected
selected by
by
either
either “probability”
“probability” or or “non-
“non-
probability”
probability” methods.
methods. If If you
you have
have aa
“probability
“probability sample”
sample” you you simply
simply know
know
the
the likelihood
likelihood ofof any
any member
member of of the
the
population
population being
being included
included (not
(not
necessarily
necessarily that
that itit is
is “random.”)
“random.”)

Sreelaxmi Iyer
BT-09012
TYPES OF SAMPLES

Sreelaxmi Iyer
BT-09012
Simple Random Sample

1. Get a list or “sampling frame”

2. Generate random numbers
3. Select one person per random number

Sreelaxmi Iyer
BT-09012
Systematic Random Sample

1. Select a random number, which will be known as k

2. Get a list of doctors, or observe a flow of people (e.g.,
doctors)
3. Select every kth person

Sreelaxmi Iyer
BT-09012
Stratified Random Sample

1. Separate your population into groups or “strata”

2. Do either a simple random sample or systematic
random sample from there

Sreelaxmi Iyer
BT-09012
Multi-stage Cluster Sample
Make clusters and then select from each cluster

The Convenience Sample

Find some people that are easy to find

The Snowball Sample

1. Find a few people that are relevant to your topic.
2. Ask them to refer you to more of them.

Sreelaxmi Iyer
BT-09012
The Quota Sample

1. Determine what the population looks like in terms of

specific qualities.
2. Create “quotas” based on those qualities.
3. Select people for each quota.

Sreelaxmi Iyer
BT-09012
 Index numbers and indexes

Index numbers are a statistician's way of expressing the

difference between two measurements by designating
one number as the "base", giving it the value 100 and
then expressing the second number as a percentage of
the first.

Sreelaxmi Iyer
BT-09012
Example: If the production of a drug increased from
20,000 in 2009 to 21,000 in 2010, the production in 2010
was 105% of the production in 2009. Therefore, on a
2009 = 100 base, the production index for the drug was
105 in 2010.

An "index", as the term is generally used when referring

to statistics, is a series of index numbers expressing a
series of numbers as percentages of a single number.

Sreelaxmi Iyer
BT-09012
 Interpolation and Extrapolation

Interpolation is the process of obtaining a value

from a graph or table that is located between major points
given, or between data points plotted. A  ratio process is
usually used to obtain the value.

Extrapolation is the process of obtaining a value from a chart

or graph that extends beyond the given data. The "trend" of
the data is extended past the last point given and an estimate
made of the value.

Sreelaxmi Iyer
BT-09012
 Statistical quality control

SQC consists of two major areas:

- Acceptance Sampling
- Process Control or Control Charts

Both of these statistical techniques may be applied to

two kinds of data.
1. Attribute Data
Example: Conforming or non-conforming, Pass or fail,
Good or bad
2. Variable Data
Example: Length, Weight

Sreelaxmi Iyer
BT-09012
 Variance analysis- is a method of splitting the total
variation of the given data into constituent part which
measure different sources of variation.

 Theory of attributes- the co-efficient of association and

the like measures can be worked out and the inferences
about the association between attributes can be drawn.

Sreelaxmi Iyer
BT-09012
Programming techniques

Anjali Vijay Kumar Gupta

MBA-Bt 09006
 PROGRAMMING TECHNIQUES
 Sophisticated
quantitative techniques
 Also known as
• Operations Research,
• Applied Decision Making
 New science derived from many disciplines such as
mathematics, physics, engineering and economics.
 Rests on inter-disciplinary team approach.
 Increasingly applied in solving the problems of
business and industry all over the world.

Anjali Vijay Kumar Gupta

MBA-Bt 09006
 THE PHASES OF OPERATIONS RESEARCH
STUDY

1. Formulation of the problem

2. Constructing a mathematical
model
3. Obtaining a solution
4. Testing the validity of the model
and the solution obtained from it
5. Controlling the model and its
solution
6. Implementing the model

Anjali Vijay Kumar Gupta

MBA-Bt 09006
PROGRAMMMING TECHNIQUES

 Linear Programming

 Decision Theory

 Theory of Games

 Simulation
◦ Montecarlo Technique
◦ Systems Simulation

Anjali Vijay Kumar Gupta

MBA-Bt 09006
CONTD…

 Queuing Theory

 Inventory Planning

 Net Work Analysis/PERT

 Integrated Production Models

Anjali Vijay Kumar Gupta

MBA-Bt 09006
OTHER TECHNIQUES
 Non-Linear Programming

 Dynamic Programming

 Heuristic Programming

 Integer Programming

 Algorithmic Programming

Anjali Vijay Kumar Gupta

MBA-Bt 09006
CONTD…
 Quadratic Programming

 Parametric Programming

 Probabilistic Programming

 Search Theory

 The Theory of Replacement

Anjali Vijay Kumar Gupta

MBA-Bt 09006
REFERENCES
Bibliography
1. Project management – R.Paneerselvam
2.Quantitative techniques – C R Kothari
3. Statistical Methods – S.P.Gupta