Why is the accuracy of estimation of time duration of individual activities is important in critical path analysis?

Critical path analysis (CPA) is a project management technique that requires mapping out every key task that is necessary to complete a project. It includes identifying the amount of time necessary to finish each activity and the dependencies of each activity on any others.

Also known as the critical path method, CPA is used to set a realistic deadline for a project and to track its progress along the way.

• Critical path analysis is a project planning method that focuses on identifying tasks that are dependant on other tasks for their timely completion.
• Understanding the dependencies between tasks is key to setting a realistic deadline for a complex project.
• Critical path analysis is used in most industries that undertake highly complex projects.

In the late 1950s, James Kelley of Remington Rand and Morgan Walker of DuPont developed a project management technique called the critical path method (CPM). Earlier versions of their technique were being practiced before then and are said to have contributed to the completion of the Manhattan Project, the secret American defense program to build an atomic bomb in order to end World War II.

Since then, CPA has become a key component in planning and managing projects rationally.

Critical path analysis identifies the sequence of crucial and interdependent steps that comprise a work plan from start to finish. It also identifies non-critical tasks. These may also be important, but if they hit an unexpected snag they will not hold up any other tasks and thus jeopardize the execution of the entire project.

The concept of a critical path recognizes that completion of some tasks in a project is dependent on the completion of other tasks. Some activities cannot start until others are finished. Inevitably, that presents the risk of bottlenecks.

CPA is used widely in industries devoted to extremely complex projects, from aerospace and defense to construction and product development.

CPA detects and defines all of the critical and noncritical tasks involved in a work plan and identifies both the minimum and the maximum amount of time associated with each. It also notes those dependencies among activities, and that tells them the amount of float or slack time that can be associated with each in order to arrive at a reasonable overall deadline date.

The project plan must be tracked through the course of a project to make sure every task is on track and no adjustments need to be made. The timeline in a CPA is often expressed as a Gantt chart, a type of bar chart that is designed to illustrate the key dependencies in a complex project.

CPA is used widely in industries devoted to extremely complex projects, from aerospace and defense to construction and product development. Today, project scheduling software is used to automatically calculate dates for CPA, aiding in time efficiency, tracking performance, and creating a unified workflow.

The core of analyzing a critical path is identifying both critical and noncritical tasks and how to schedule these tasks most effectively. The goal is to reach the project deadline with the lowest cost possible. Analyzing a critical path involves identifying which tasks are dependent or independent from each other.

To create an optimal critical path, one can analyze if the time to complete tasks can be reduced. For example, say a contractor is building a home. To reduce the number of days it takes to build the frame, the contractor may choose to have more carpenters assigned to the job. As a result, the overall project may be completed a day earlier.

It's worth noting that the contractor may have key questions to ask when analyzing the critical path. Would the costs of this decision outweigh the savings of completing the project a day earlier? Is there enough equipment to make this possible? Looking closely at these interconnected variables is important for determining the critical path.

Consider the following example of critical path analysis used in the aerospace industry. Say airline Company A has low profitability. Management has identified that excess capacity is one reason behind its lower profitability levels. To increase the utilization of aircraft, it may choose to increase daily utilization from 10 to 11 hours a day. Here, the company finds that an extra hour will result in $100,000 in profit per aircraft annually. The company could in turn schedule a greater number of flights for aircraft that would have otherwise stood idle.

Critical path analysis (CPA) has a number of advantages, in particular for large and complex tasks. Using CPA can improve the efficiency and clarity of a project, provide accurate timescales, and provide estimates to stakeholders.

The aim of effective project management is to bring the project to completion on time and on schedule. Estimating project duration is a key function of scheduling. Individual activities make up the schedule, and the estimates of their duration determine the project timetable. The accuracy of the overall schedule depends on the accuracy of these estimates. While project managers can't know the actual time it will take to complete an activity, there are six methods they can use to obtain reliable estimates.

Work Breakdown

1. Sometimes an activity is too large or complex for a reliable duration estimate. Project guidelines state that an individual activity that takes up more than 10 percent of the project schedule has to be broken down. A project manager uses a work breakdown technique to reduce the activity to smaller tasks. Ideally, the project manager can estimate the duration of tasks that individual workers perform more accurately than the whole activity.

Historical

1. An effective way of estimating activity duration is to use historical data. If data on the duration of the same activities is available, project managers take the average duration of the historical records and use that in the project schedule. For small businesses which have not completed many projects, other methods are preferable.

Analogy

1. Use of analogous activities can generate reliable estimates. If the company has carried out a similar activity, it may be possible to adapt the duration to the current case. Project managers have to study the similarities of the two activities and adjust for any features that may result in differences in duration. Even small businesses can often find such similar activities on which to base estimates.

Expert Judgment

1. If expert judgment is available at reasonable cost, a project manager will often use such duration estimates as superior to internally generated ones. Expert judgment means using specialists who have a reputation for knowledge of the particular field and experience in estimating activity duration within it.

Effort

1. A project manager who knows what resources are necessary for an activity may calculate the effort the activity requires and arrive at a duration. He adds the amount of time it takes to obtain materials to the labor time it takes to complete the tasks. Such an estimate has the advantage that it allows the project manager to track resource use and compare it to the estimate.

Units

1. Calculation based on units of activity is a method available to both the largest and smallest businesses. Typical units are numbers of products or size of the product. Project managers can calculate how much time it took to produce a certain number or a certain size and adjust for the number or size they want to produce. Project managers have to adjust for economies of scale for these calculations.