Critical Path Analysis (Edexcel A Level Business)

Revision Note

Lisa Eades

Written by: Lisa Eades

Reviewed by: Steve Vorster

The Nature & Purpose of Critical Path Analysis

  • Critical path analysis is a project management tool that uses network analysis to plan complex and time-sensitive projects 

  • Critical Path Analysis involves the construction of a visual model of the project that includes key elements

    • A list of all activities required to complete the project

    • The time (duration) that each activity will take to complete

    • How each project activity depends on others

  • Critical Path Analysis shows

    • The order in which activities must be completed

    • The longest path of project activities to the completion of the project

    • The earliest and latest that each project activity can start and finish without delaying completion of the project as a whole

    • Activities within a project that can be carried out simultaneously are identified

    • The critical project activities which if delayed will cause the project as a whole to over-run

    • Those project activities where some delay is acceptable without delaying the project as a whole

    • The shortest time possible to complete the project

  • It allows managers to identify the relationships between the activities involved and to work out the most efficient way of completing the project

    • Resources such as raw materials and components can be ordered or hired at precisely the right time they are needed

    • Working capital may be managed efficiently

    • Where delays occur managers can identify the implications for the project’s completion and redirect resources if required 

Drawing Critical Path Analysis Diagrams

The Main Components of Network Analysis Diagrams

Element

Description

Node

screenshot-2024-01-08-at-17-55-22
  • A node is a circle that represents a point in time where an activity is started or finished

  • The node is split into three sections

  • The left half of the circle is the activity number 

  • The top right section shows the earliest start time (EST) that an activity can begin based on the completion of the previous activity

  • The bottom right section shows the latest finish time (LFT) by which the previous activity must be completed

Activities

  • An activity is a process or task within a project that takes time

  • Activities are  shown on the network diagram as a line which link nodes 

  • A description of the activity or a letter representing the activity is usually shown above the line

Duration

  • The duration is the length of time it takes to complete an activity

  • The duration is shown as a number of time units such as hours or days below the activity line

Project network diagram with nodes, activities, durations, earliest start (EST), and latest finish times (LFT) labelled. Activities A-H are shown.

An example of a simple network diagram showing key elements

  • A network diagram must always start and end on a single node

  • Lines must not cross and must only be assigned to activities

Critical Path Calculations

Calculating Earliest Start Times

Network diagram with circles A to H connected by lines. Each circle contains two numbers; lines are labelled with single-digit numbers.

An example of a simple network diagram showing Earliest Start Times

  • Working forwards from Node 1 it is possible to calculate the Earliest Start Time for each activity by adding the duration of each task

  • The EST for each activity  is placed in the top right of each node

    • Node 1 is the starting point of the project and where both Activity A and Activity B begin

    • Activity A and Activity B are independent processes

    • Activity A has a duration of 2 days and its earliest start time (EST) is 0 days

    • Activity B has a duration of 3 days and its EST is also 0 days

    • Activity C and Activity D both begin at Node 2 and  are dependent upon the completion of Activity A but are independent from each other

      • Activity C has a duration of 3 days and its EST is 2 days 

      • Activity D has a duration of 5 days and its EST is also 2 days

    • Activity E begins at Node 3

      • Activity E has a duration of 4 days and its EST is 3 days

    • Activity F begins at Node 4

      • Activity F has a duration of 2 days and its EST is 5 days

    • Activity G begins at Node 5

      • Activity G has a duration of 1 day and its EST is 7 days

    • Activity H begins at Node 6

      • Activity H has a duration of 3 days and its EST is 7 days

    • Node 7  is the end point of the project

Calculating Latest Finish Times

Network graph with nodes labelled A to H and numbered 0 to 7. Lines show connections and weights between nodes. Nodes have multiple values inside circles.

An example of a simple network diagram showing Earliest Start Times and Latest Finish Times

  • Working backwards from Node 7 it is now possible to calculate the Latest Finish Time for each activity by subtracting the duration of each task

  • The LFT for each activity  is placed in the bottom  right of each node

    • Node 7 is the end point of the project which has a latest finish time of 10 days

    • Activity H has a duration of 3 days

      • The LFT in Node 6 is 7 days (10 days - 3 days)

    • Activity G has a duration of 1 day

      • The LFT in Node 5 is 9 days (10 days - 1 day)

    • Activity F has a duration of 2 days

      • The LFT in Node 4 is 8 days (10 days - 2 days)

    • Activity E has a duration of 4 days

      • The LFT in Node 3 is 3 days (7 days - 4 days)

    • Activity D has a duration of 5 days

      • The LFT in Node 2 is 4 days (9 days - 5 days)

    • Activity C has a duration of 3 days

      • The LFT in Node 3 is 4 days because Activity D is the more time-critical of the two activities that are dependent upon the completion of Activity A and so its LFT is recorded

    • Activity B has a duration of 3 days

      • The LFT in Node 1 is 0 days (3 days - 3 days)

    • Activity A has a duration of 2 days

      • The LFT in Node 1 is 0 days because Activity B is the more time-critical of the two starting activities and so its LFT is recorded

  • The LFT in Node 1 is always 0

Identifying the Critical Path

  • The critical path highlights those activities that determine the length of the whole project

    • If any of these critical activities are delayed the project as a whole will be delayed

    • The critical path follows the nodes where the EST and LFT are equal

      • In the diagram below nodes 1 3 6 and 7 have equal ESTs and LFTs

      • Activities that determine these nodes are B E and H

      • These activities are marked with two short lines

      • The critical path is therefore BEH

Network flow diagram with nodes A to H, each with capacity and flow. Arcs include values like A-2, C-4, and B-3, with paths marked in red and blue lines. The critical path is red.

An example of a simple network diagram showing the critical path BEH

Identifying and Calculating Float Time

  • Float time exists where there is a difference between the Earliest Start Time (EST and the Latest Finish Time (LFT)

  • Where float time is identified managers may

    • Transfer resources such as staff or machinery to more critical activities

    • Allow extra time to complete tasks to improve quality or allow for creativity

Network diagram showing nodes with calculations and notes on differences at nodes 4, 5, and 6. Includes paths A-H and float time information.

An example of a simple network diagram showing float nodes (4 and 5) and a critical node (6)

  • The total float refers specifically to spare time that is available so that the overall project completion is not delayed

  • The total float for a specific activity is calculated by

LFT for the activity - Duration of the activity - EST for the activity

  • Using the diagram above the following total float times can be calculated for Activities A to H

Activity

LFT

- Duration

- EST

= Total Float

A

4

2

0

2

B

3

3

0

0

C

8

3

2

3

D

9

5

2

2

E

7

4

3

0

F

10

2

5

3

G

10

1

7

2

H

10

3

7

0

  • The critical activities B E and H each have a total float of 0 days

Worked Example

The network diagram below shows the activities involved in a new promotional campaign for a small fashion accessories business as well as the time (in weeks) it is expected that each activity will take to complete.

Diagram featuring connected circles numbered 1 to 8 with lines labeled A to J, each with numerical values. The layout resembles a network.

Calculate

a) The earliest start times and latest finish times for each node.  (4 marks)

b) The total float time for activity G.  (3 marks)

Step 1 - Calculate the Earliest Start Times (EST)

Node 1 EST = 0

Node 2 EST = 0 + 3 = 3 but 0 + 4 = 4 so 4

Node 3 EST = 4 + 5 = 9

Node 4 EST = 4 + 2 = 6

Node 5 EST = 9 + 3 = 12

Node 6 EST = 6 + 4 = 10

Node 7 EST = 4 + 6 = 10

Node 8 EST = 12 + 2 = 14 but 10 + 4 = 14 and 10 + 5 = 15 so 15

Step 2 - Calculate the Latest Finish Times (LFT)

Node 8 = 15

Node 7 = 15 - 5 = 10

Node 6 = 15 - 4 = 11

Node 5 =15 - 2 = 13

Node 4 =11 - 4 = 7

Node 3 =13 - 3 = 10

Node 2 = 10 - 6 = 4

Node 1 = 4 - 4 = 0

Step 3 - Calculate the total float time for Activity G

Total float =   LFT for the activity  -   Duration of the activity    -   EST for the activity 

=    11 weeks    -   4 weeks    -   6 weeks

=    1 week

Limitations of Using Critical Path Analysis

Limitations

Explanation

  • Very lengthy or complex projects involve a very large number of activities that have numerous dependencies

  • Specialist network planning software may be required

  • Layers of supervision may be required to manage different groups of activities within the project

  • Network analysis often relies on estimates and forecasts

  • Significant research is required prior to the completion of network analysis

  • Close and honest  working relationships with suppliers are essential

  • Network analysis does not guarantee the success of a project 

  • Project managers will need to be highly skilled and will need experience of working with complicated plans

  • Resources may not prove to be as flexible as hoped when managers identify float periods

  • Employees may require additional training in order to transfer to critical tasks

  • Machinery and other capital resources may require adaptation

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Lisa Eades

Author: Lisa Eades

Expertise: Business Content Creator

Lisa has taught A Level, GCSE, BTEC and IBDP Business for over 20 years and is a senior Examiner for Edexcel. Lisa has been a successful Head of Department in Kent and has offered private Business tuition to students across the UK. Lisa loves to create imaginative and accessible resources which engage learners and build their passion for the subject.

Steve Vorster

Author: Steve Vorster

Expertise: Economics & Business Subject Lead

Steve has taught A Level, GCSE, IGCSE Business and Economics - as well as IBDP Economics and Business Management. He is an IBDP Examiner and IGCSE textbook author. His students regularly achieve 90-100% in their final exams. Steve has been the Assistant Head of Sixth Form for a school in Devon, and Head of Economics at the world's largest International school in Singapore. He loves to create resources which speed up student learning and are easily accessible by all.