Activity Planning and Risk Management

Activity Planning

Activity Planning is the process of identifying project activities, sequencing them, estimating durations, and preparing schedules to ensure timely project completion.

Purpose of Activity Planning

Break the project into manageable tasks
Allocate time and resources efficiently
Identify dependencies between activities
Monitor and control progress

Objectives of Activity Planning

Objective	Explanation
Time Management	Ensure project completes on schedule
Resource Optimization	Efficient use of manpower & tools
Cost Control	Avoid delays and extra costs
Coordination	Smooth flow of activities
Risk Identification	Detect schedule-related risks early

Project Schedules

A project schedule is a timeline that shows start and finish dates of activities, along with dependencies.

Importance of Project Scheduling

Provides project roadmap
Helps track progress
Identifies critical activities
Improves communication

Types of Project Schedules

Schedule Type	Description
Bar Chart (Gantt Chart)	Simple visual timeline
Network Schedule	Shows dependencies
Milestone Chart	Highlights key events
Time-Phased Schedule	Resource-based scheduling

Gantt Chart Example (Conceptual)

Activities

An activity is a specific task or unit of work that consumes time and resources.

Characteristics of Activities

Clearly defined start and end
Measurable duration
Uses resources
Produces output

Activity Breakdown (WBS)

Level	Example
Project	Online Banking System
Module	Account Management
Activity	Design Login Page
Task	Create UI Layout

Sequencing and Scheduling

Sequencing

Sequencing is the process of deciding the order in which activities must be performed.

Scheduling

Scheduling assigns start and finish times to activities based on sequence and duration.

Types of Activity Dependencies

Dependency	Meaning
Finish-to-Start (FS)	One finishes before next starts
Start-to-Start (SS)	Both start together
Finish-to-Finish (FF)	Both finish together
Start-to-Finish (SF)	Rarely used

Sequencing Flow Diagram

Network Planning Models

Network Planning Models represent project activities graphically to analyze scheduling and control.

Major Network Models

Model	Full Form	Description
PERT	Program Evaluation and Review Technique	Probabilistic time estimates
CPM	Critical Path Method	Deterministic time estimates

Comparison of PERT and CPM

Aspect	PERT	CPM
Time Estimation	Three-time estimates	Single-time estimate
Nature	Probabilistic	Deterministic
Focus	Time	Time & Cost
Usage	R&D projects	Construction/software

Network Diagram Example

Formulating Network Model

Formulating a network model involves systematically converting project activities into a network diagram.

Steps to Formulate Network Model

Step	Description
Step 1	List all project activities
Step 2	Identify dependencies
Step 3	Estimate duration
Step 4	Draw network diagram
Step 5	Calculate critical path

Activity-on-Node (AON) Representation

Nodes represent activities
Arrows represent dependencies

Forward Pass Technique

The Forward Pass is used to calculate:

Earliest Start Time (ES)
Earliest Finish Time (EF)

Formula


EF = ES + Duration

Steps in Forward Pass

Start from first activity
ES of first activity = 0
Calculate EF for each activity
Move forward through network

Forward Pass Diagram

Backward Pass Technique

The Backward Pass calculates:

Latest Finish Time (LF)
Latest Start Time (LS)

Formula


LS = LF − Duration

Steps in Backward Pass

Start from last activity
LF of last activity = Project duration
Calculate LS
Move backward through network

Backward Pass Diagram

Float (Slack) and Critical Path

Float

Float is the amount of time an activity can be delayed without affecting project completion.


Float = LS − ES = LF − EF

Critical Path

The Critical Path is the longest path in the network with zero float.

Feature	Description
Longest Path	Determines project duration
Zero Float	No delay allowed
Critical Activities	Must be monitored closely

Link with Risk Management

Poor activity planning leads to:

Schedule risk
Resource conflict
Cost overrun

Network models help reduce risk by:

Identifying critical activities
Predicting delays
Supporting corrective actions

Exam-Focused Quick Revision Points

Activity planning breaks work into tasks
Scheduling assigns time to activities
Sequencing defines task order
PERT & CPM are network planning models
Forward pass → earliest times
Backward pass → latest times
Critical path controls project duration

Critical Path Method, Risk & Cost Scheduling

Critical Path Method (CPM)

Note: “CRM” in many question papers refers to CPM – Critical Path Method.

CPM is a network-based scheduling technique used to determine the longest sequence of dependent activities that defines the minimum project duration.

Key Characteristics of CPM

Deterministic (single time estimate)
Focus on time and cost
Identifies critical activities
Used widely in software and construction projects

CPM Terminology

Term	Meaning
ES	Earliest Start
EF	Earliest Finish
LS	Latest Start
LF	Latest Finish
Float (Slack)	Allowable delay without affecting project
Critical Path	Path with zero float

CPM Network Diagram (Conceptual)

Creation of Critical Paths

Steps to Create a Critical Path

Step	Description
1	List all activities
2	Identify dependencies
3	Estimate durations
4	Draw network (AON/AOA)
5	Apply forward pass
6	Apply backward pass
7	Identify zero-float path

Float Formula


Float = LS − ES = LF − EF

Critical activities have Float = 0.

Risk Identification

Risk Identification is the process of detecting potential events that may adversely affect project objectives.

Common Sources of Risk

Category	Examples
Technical	New technology, integration issues
Schedule	Unrealistic deadlines
Cost	Budget overruns
Resource	Skill shortages
External	Legal, regulatory changes

Risk Identification Tools

Tool	Purpose
Brainstorming	Generate risk list
Checklists	Past project risks
SWOT	Strengths, weaknesses
Expert Judgment	Domain expertise

Risk Assessment

Risk Assessment evaluates probability and impact of identified risks.

Risk Assessment Matrix

Probability \ Impact	Low	Medium	High
Low	Low Risk	Low Risk	Medium
Medium	Low	Medium	High
High	Medium	High	Critical

Risk Matrix Diagram

Risk Planning

Risk Planning defines actions to handle risks if they occur.

Risk Response Strategies

Strategy	Meaning
Avoid	Change plan to eliminate risk
Mitigate	Reduce probability/impact
Transfer	Shift risk (insurance, outsourcing)
Accept	Take no action (monitor only)

Risk Management

Risk Management is a continuous process of identifying, analyzing, planning, and monitoring risks.

Risk Management Process

Phase	Activity
Identification	List risks
Analysis	Probability & impact
Planning	Response strategies
Monitoring	Track & control

Risk Management Cycle

PERT Technique

PERT (Program Evaluation and Review Technique) is a probabilistic network technique using three time estimates.

Time Estimates in PERT

Symbol	Meaning
O	Optimistic time
M	Most likely time
P	Pessimistic time

Expected Time Formula


TE = (O + 4M + P) / 6

CPM vs PERT

Aspect	CPM	PERT
Time Estimate	Single	Three
Nature	Deterministic	Probabilistic
Focus	Time & cost	Time uncertainty
Usage	Software, construction	R&D projects

PERT Network Diagram

Monte Carlo Simulation

Monte Carlo Simulation uses random sampling to analyze schedule and cost uncertainty.

Purpose

Predict probability of meeting deadlines
Assess risk impact on schedule
Improve estimation accuracy

Steps in Monte Carlo Simulation

Step	Description
1	Define uncertain variables
2	Assign probability distributions
3	Run multiple simulations
4	Analyze outcomes

Monte Carlo Output Example

Resource Allocation

Resource Allocation assigns people, tools, and equipment to project activities.

Objectives

Avoid resource conflicts
Optimize utilization
Ensure timely completion

Resource Allocation Techniques

Technique	Description
Resource Leveling	Smooth resource usage
Resource Smoothing	Adjust within float
Critical Chain	Focus on constraints

Resource Allocation Diagram

Cost Schedules

A Cost Schedule shows planned expenditure over time.

Purpose of Cost Scheduling

Budget control
Cash flow planning
Cost performance tracking

Types of Cost Schedules

Type	Description
Time-phased Budget	Cost vs time
Cumulative Cost Curve	S-curve
Activity-wise Cost	Cost per task

S-Curve Cost Schedule

Exam-Focused Key Points (Quick Revision)

CPM identifies longest zero-float path
Critical path controls project duration
Risk identification & assessment reduce uncertainty
PERT uses three-time estimates
Monte Carlo predicts probability outcomes
Resource allocation avoids conflicts
Cost schedules control project budget

Activity Planning and Risk Management