SUBJECT: MANAGEMENT & ENTREPRENEURSHIP DEVELOPMENT
SUBJECT CODE: 18ES51
MODULE – 5
Project Design and Network Analysis: Introduction,
Importance of Network Analysis, Origin of PERT and
CPM, Network, Network Techniques, Need for Network
Techniques, Steps in PERT, CPM, Advantages, Limitations
and Differences. Financial opportunity identification;
Banking sources; Nonbanking Institutions and Agencies;
Venture Capital – Meaning and Role in Entrepreneurship;
Government Schemes for funding business; Pre launch,
Launch and Post launch requirements; Procedure for getting
License and Registration; Challenges and Difficulties in
Starting an Enterprise
Project Design and Network
Analysis: Introduction
• Project design is the framework of a project
formatted with detailed sequence and develops
an acceptable work plan for the project. It
helps the entrepreneur to improve the project
as scheduled without any.
Importance of Network Analysis
The following are the importance:
• The whole project should be considered with reference
to the sequence of activities and events.
• Network analysis requires that the events should be
thought of in different stream of operations and their
relationship understood clearly.
• The whole project may be put on one network, while
different segments of project may be detailed out in
separate network for final integration in the overall
network. Therefore important details won’t miss the
attention of management.
Origin of PERT and CPM
• PERT & CPM are two of 40 different names
given to network analysis.
• PERT and CPM are extension of Gantt bar chart.
• PERT and CPM were developed in USA
independently
• CPM is essentially on the activities themselves
and the cost associated with the completion of
each activity.
• PERT was developed in 1958.It had a emphasis
on the events, rather than activities leading to
event.
Network Techniques
• In a project there may be two categories or
jobs or activities-which can be taken up only
after completing some other activities either
completely or partially.
• Several techniques of project scheduling and
control such as BAR charts, PERT and CPM
etc are used.
Need for Network Techniques
• Network analysis helps in designing, Planning,
Coordinating, Controlling and Decision making in order to
accomplish the project economically in the minimum
available time with the limited resources.
• Bar chart neither satisfactorily tells the time at which the
activities begin and end nor does it indicate tolerances in
activity timings. PERT is one of the management techniques
which is more useful to some managers
• PERT is concerned with two concepts:
• Events: An event is a specific accomplishment that occurs at
a recognisable point of time.
• Activities: An activity is a work required to complete a
specific event.
Steps in PERT
• Establishment of objectives.
• Schedule breakdown in great detail.
• Both technical and managerial persons should
begin to work together.
• Each person who participates in the
applications of PERT to the control of the
project should have some basic familiarity
with nature of work and ultimate objectives
desired.
Advantages and Limitations of PERT
Advantages of PERT:
• This technique gives management the ability to plan the best
possible use of resources to achieve a given goal within the overall
time and cost limitations.
• It helps management to handle the uncertainties involved in
programmes when no data is available.
Limitations of pert:
• The basic difficulty comes when there are activities which are non
repetitive type.
• This technique does not consider resources required at various
stages of the project.
• Use of this techniques for active control of a project requires
frequent updating and revising the PERT calculations and this
proves quite a costly affair.
CPM
CPM has two time-cost estimates for each
activity but does not incorporate any statistical
analysis in determining such time estimates.
CPM operates on the assumption that there is a
precise known time that each activity in the
project will take.
CPM Advantages
and Limitations
Advantages
• It helps in ascertain the time schedule
• With its aid control by the management is made easy
• It makes better and detailed planning possible.
• It provides a standard method for communicating
project plans, schedules, time and cost performance.
Limitations
• CPM fails to incorporate statistical analysis in
determining the time estimates.
• It operates on the assumption that precise known time
that each activity in the project will take but this time
may not be true in actual life.
THANK YOU
