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.