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BMT 13 - Critical path analysis (HL only)
Business Management Toolkit 13 - Critical path analysis (HL only)
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Critical path analysis (CPA), also referred to as network analysis, is a Business Management technique that maps out all key tasks that are necessary to complete a project. As a planning tool, CPA includes identifying each activity, the amount of time necessary to finish each task, and the dependencies of different activities within the project. It is used to set realistic deadlines for different tasks within a project and to monitor the progress to ensure the overall project is completed on time.
Starter activity 1
Put the following tasks for the production of burgers in the correct order:
Add mince beef to the diced onions
Assemble burger cheese and condiments on a bun
Check finished burgers for quality and presentation
Cook burger patty
Chop up (dice) onions
Receive deliveries of ingredients
Serve to customer
Shape mix into burger patty
The correct order should be:
6. Receive deliveries of ingredients
5. Chop up (dice) onions
1. Add mince beef to the diced onions
8. Shape mix into burger patty
4. Cook burger patty
2. Assemble burger, add cheese, and condiments, place on a bun
3. Check finished burgers for quality and presentation
7. Serve to customer.
The purpose of this task is to highlight the importance of completing tasks in the correct sequence when constructing critical path analysis. This helps to ensure tasks are competed efficiently and on time.
Starter activity 2
Suppose you are going to cook your friend some breakfast tomorrow. The tasks and timings are shown below, although do not appear in chronological order.
Bacon (fried) = 2 minutes
Baked beans (microwave) = 1 minute
Eggs (sunny side up) = 2 minutes
Lay table, including cutlery and sauces = 2 minutes
Mushroom (lightly fried) = 1 minute
Sausages (fried) = 6 minutes
Tea / Coffee = 3 minutes
Toast = 2 minutes
Tomato (lightly fried) = 1 minute
In small groups of 2 or 3, discuss the shortest time in which you could prepare and serve the breakfast. Make sure you can justify your answer.
Teacher only boxTeachers' Notes
The purpose of this second task is to highlight the importance of completing tasks on time, and not just in the most efficient sequence. As can be seen, organizing activities in the right sequence helps to complete tasks in the least amount of time. This is important for students in their daily lives, and not only to project managers in businesses.
There are no correct answers as such for this task. What can be seen however is that without any planning, the sum of the individual tasks would take 20 minutes.
However, students should be able to see that some of these tasks can be carried out concurrently. For example:
Whilst the bread is in the toaster (for 2 minutes), other tasks could be carried out, such as laying the table and putting out the cutlery and condiments (which takes about 2 minutes as well).
Similarly, whilst the water is being boiled for the tea or coffee, this frees up some time to get other jobs done, such as putting the baked beans into the microwave.
It may be possible to fry the egg at the same time as the bacon as both take around 2 minutes.
The mushrooms and tomatoes can be put on the frying pan after having fried the sausages for 5 minutes. By the end of the 6th minute, all of the items are ready.
A further point for discussion, which ties in neatly with project management, is that certain tasks may be left out from the above original list. For example, some still needs to wash up and put things away after breakfast has been served and consumed!
Critical path analysis (CPA) shows the various tasks or activities involved in a certain project that have no float time. This means that if these activities are delayed, it would delay the whole project. This is why these tasks are critical, i.e., these activities must take place and be completed within the set time in order for the project not to be delayed.
Understanding the construction of network diagrams
To navigate between the slides in this Google Slides presentation, please use the arrow “<“ and “>” icons below.
Advantages of Critical Path Analysis
CPA provides managers and decision makers with a visual representation of a complex project which may be easier to interpret.
It can be used to suit a range of circumstances and help solve a variety of business problems or issues.
It reduces the time lost between tasks, ensuring that projects run smoothly and are completely in the most time efficient way.
As a planning tool, CPA encourages forward planning in business organizations.
It forces managers and decision makers to consider all aspects of a project, including resourcing all tasks, thereby improving efficiency in production.
It helps to improve the firm's cash flow position by operating more efficiently and avoiding delays to projects.
Disadvantages of Critical Path Analysis
Construction of a network diagram alone does not guarantee the smooth completion of a project. In reality, there are likely to be disruptions and unforeseen circumstances that may well delay the project.
Similarly, during the planning stage, not every single task in a project may be included; human error therefore limits the extent to which CPA assists with project management.
Some projects are immense, making network diagrams complex and difficult to manage.
Network analysis will only be helpful if the data used to construct the network diagrams are complete and reliable.
Top tip!
Note that students are not expected to construct network diagrams in the exams. If assessed, the network diagram will be provided as part of the examination paper with students required to complete the calculations. This can include calculating the earliest start time (EST), latest finish time (LFT), as well as float times (total and free float).
Top tip!
Students are expected to understand the purpose of dummy activities. As its name suggests, a dummy activity is not an actual task in a project but is used to ensure logical dependencies are accurately represented in a network diagram. There are no time or resources needed for a dummy activity.
Do note that dummy activities can be included in network diagrams in the final examinations.
| (a) | Define the term critical path analysis. | [2 marks] |
| (b) | Explain two reasons why businesses might choose to use critical path analysis. | [4 marks] |
Teacher only boxAnswers
(a) Define the term critical path analysis. [2 marks]
Critical path analysis is a visual planning tool that shows the activities, duration, and interdependencies of all activities for a given project.
Award [1 mark] for a vague definition that shows some understanding.
Award [2 marks] for a clear and accurate definition that shows good understanding, similar to the example above.
(b) Explain two reasons why businesses use critical path analysis. [4 mark]
Possible reasons for using CPA could include an explanation of any two of the following points:
Critical path analysis helps managers to focus on identifying the activities that are dependant on other tasks for their completion in a timely manner.
Understanding the dependencies between different activities helps to organize activities and resources to ensure the project progresses in an efficient way, especially with large and complex projects.
It helps reduce the risks and costs of large and complex projects.
Accept any other reason that is clearly explained.
Mark as a 2 + 2
For each reason, award [1 mark] for a valid point, and a further [1 mark] for the explanation, up to the maximum of [4 marks].
Download the network diagrams below and complete the missing information for the earliest start time (ESF) and latest finish time (LFT) for each project. Then identify the duration and critical path for each project.
Teacher only boxAnswers
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