What is Network Diagram

      What is Network Diagram?

• In project management the network diagram is usually associated with the scheduling function.

• The network diagram for a schedule shows the logical relationships between the activities of the schedule for a project.

• There are two kinds of network diagrams, the "activity on arrow" network diagram and the "activity on node" network diagram. The "activity on node" network diagram is also called a "predecessor-successor" network diagram, and a "precedence" network diagram.

• "Activity on arrow" network diagrams, as the name implies, have arrows representing the activities; any special information can be annotated to the arrows. The arrows terminate in events that are depicted as circles at the beginning and end of the arrows. Since the activities are depicted by the arrows, the arrow length can be varied in proportion with the duration of the activity.

• "Activity on node" network diagrams, as seen in Figure 5-2, have the activity information written in small boxes that are the nodes of the diagram. Arrows connect the boxes to show the logical relationships between pairs of the activities.

• In this type of diagram the activity numbers are usually sequential and numeric. The number of the independent activity is called the predecessor and the number of the dependent activity is called the successor. Each activity has a unique number.

Cost Budgeting

• Why am I concerned with Cost Budgeting?

Cost budgeting or setting the cost baseline for a project is very important since it forms the foundation for the measurement of performance in the project.
Ultimately our performance measurement system is going to measure the actual costs of the project in terms of time and quantity and compare that to the planned expenditures in terms of time and quantity.

• What is time value of money?

• The time value of money refers to the fact that money we receive in the future is worth less to us than the money we receive today.

WBS, Scope Change Control and Cost Reserve

• What is Work Breakdown Structure?
• The Work Breakdown Structure takes the project and divides it in smaller pieces. These can be called sub projects.
• The subprojects can be broken down into smaller pieces. This process of breaking down the project can continue until the project is broken into small, more manageable pieces

• What is Scope Change Control?
• Since changes to the project scope are inevitable, we should have a means of changing the scope in such a way that the changes can be managed successfully into the project without causing havoc. This is what we mean by scope change control.
• One of the things you will need in order to control the changes is a clear definition of the project deliverables.
• Unless the deliverables are clear when the scope baseline of the project is established, it is difficult to know when a change is requested whether it is or is not part of the already established project scope.
• Many conflicts can be avoided by having a clear scope baseline that all of the stakeholders have agreed to.

• What are the Cost Reserves?
• There are two kinds of reserves set up to budget for risks: the contingency reserve and the management reserve. The contingency reserve contains the money to do the risks that were identified. The management reserve contains the money to do the risks that were not identified.

Project Justification, Charter & Scope

• What is Project Justification?
• The most credible justification is one where the identified benefits of the project are greater than the cost of doing the project.

• What is Project Charter?
• A Project Charter is the first document exists in the project.
• The project charter names the project and briefly describes it.

• What is Scope Statement?
• The Scope Statement is the defining statement of the project.
• It is a primary document to understand the project and its nature
• The project statement includes Goal Statement, the project justification, the products the project will produce, the deliverables and the success criteria of the project.
• The project statement should also include the things that the project will not do