Critical Path analysis

Question 1

Advantages of critical path analysis

Answer 1

• CPA is an effective management tool for planning and controlling complex projects. Critical activities can be identified which forces managers to think about the process and supports a systematic approach to planning activities. Problems can be highlighted early so that whole projects are not delayed.
• Allows effective management of resources. Allocating factors, such as labour, to where they are needed and can be most effective. Supports the transferring of
  resources for different tasks, if required.
• Reduces the need for working capital – parts used in the project can be ordered exactly when they are needed. Allows the use of just-in-time production.
• Improves cash flow as a result of reduced need for working capital. Also helps with cash flow forecasts.
• Can be used to check on the efficiency of individual activities and to identify if new resources are needed or if employees need training.
• Improves overall management of projects – managers understand what is involved and what needs to be done and when it needs to be done by.
• Can be used to give a business a competitive advantage by being more efficient and supports time-based management.

Question 2

Disadvantages of Critical path analysis

Answer 2

• Information can be distorted or poor (over optimistic) methods of estimation of activity times can
  be used. Lack of experience of those preparing CPA leads to inaccuracies.
• CPA can give the wrong results or fail to allow for external factors that will influence the total time taken.
• Sub-contractors, who may be completing some of the activities on a project, can be outside the control of the project manager.
• Supplies may be delayed; they may be of the wrong type or of poor quality.
• CPA only identifies the critical activities; it does not ensure these are done on time. Close supervision may be needed which may reduce employee morale.
• Requires ongoing checking of activities. Changes may be required if there is a delay. The construction of critical path analyses can be time consuming.
• CPA does not ensure quality – the focus is mainly on time and meeting deadlines

Question 3

Discuss usefulness of critical path analysis

Answer 3

• The fact that CPA has several benefits for a business, including the fact that producing a network can help a business to become more efficient by saving time and materials. It can ensure that a business meets critical deadlines and so does not let down its customers.
• It can help the business make more accurate decisions as it will have to think clearly about the time that each task takes and the best sequence in which to work. It can speed up the overall time that a project takes as many processes can be carried out simultaneously and there should be less waiting
  time involved.
• By sequencing production, a business can make sure that raw material stocks arrive when and where needed and so be part of a JIT system. This cuts down on the costs of carrying inventory.
• On the other hand, CPA can be costly to carry out and it does not guarantee success since time estimates may be wrong, or unexpected events occur which mean that the original plan
  needs to be adapted.
• When used appropriately it can have significant benefits for a business.

Question 4

Critical path analysis process

Answer 4

• Identify and prioritise the activities
• Identify which activities MUST be done before others
• EST – identify earliest start time
• LFT – identify latest finish time
• Identify the FLOAT – tasks which can be completed outside the path
• Identify the critical path – points connecting ESTs and LFTs (where these are the same)

Question 5

An activity without spare time is

Answer 5

critical

Question 6

In CPA spare time is referred to as

Answer 6

float

Question 7

Explain free float

Answer 7

This is the amount of spare time available for an activity without
delaying the NEXT ACTIVITY
Free Float =
EST at End of activity - (EST at start + Duration of activity)

Question 8

Explain total float

Answer 8

This is the amount of spare time available for an activity without
delaying the WHOLE PROJECT
Total Float =
Activity’s LFT - (Activity’s LFT EST +
Activity’s Duration)

Question 9

Define critical path analysis

Answer 9

Critical path analysis (CPA) is a method of planning and controlling large projects and is used to make decisions on the management of resources and time.
It is a technique used to find cheapest and quickest way to
complete a task.

Question 10

Explain the critical path

Answer 10

in an operation which consists of a
sequence of activities, this is the one sequence which cannot afford any delays without prolonging the whole operation.
Critical path analysis is used to allocate resources within a project, judge how long a project should take to complete, and to recognise those tasks or activities that take place within a project, that are critical to the project being
completed on time. A ‘critical’ task or activity is one that must be started and completed on time if the project is to be finished on time.

Question 11

How to speed up the critical path

Answer 11

*bring more employees / work overtime
*outsource
*Bring more resources from float activities to critical activities
BUT:
- more costs
- those employees may not have correct skills - costs/time of training