Critical path analysis (HL only)

Critical path analysis (CPA), also referred to as network analysis, is a Business Management technique that maps out all key tasks that are necessary to complete a project. As a planning tool, CPA includes identifying each activity, the amount of time necessary to finish each task, and the dependencies of different activities within the project. It is used to set realistic deadlines for different tasks within a project and to monitor the progress to ensure the overall project is completed on time.

Critical path analysis (CPA) shows the various tasks or activities involved in a certain project that have no float time. This means that if these activities are delayed, it would delay the whole project. This is why these tasks are critical, i.e., these activities must take place and be completed within the set time in order for the project not to be delayed.

 Advantages of Critical Path Analysis

• CPA provides managers and decision makers with a visual representation of a complex project which may be easier to interpret.

• It can be used to suit a range of circumstances and help solve a variety of business problems or issues.

• It reduces the time lost between tasks, ensuring that projects run smoothly and are completely in the most time efficient way.

• As a planning tool, CPA encourages forward planning in business organizations.

• It forces managers and decision makers to consider all aspects of a project, including resourcing all tasks, thereby improving efficiency in production.

• It helps to improve the firm's cash flow position by operating more efficiently and avoiding delays to projects.

   Disadvantages of Critical Path Analysis

• Construction of a network diagram alone does not guarantee the smooth completion of a project. In reality, there are likely to be disruptions and unforeseen circumstances that may well delay the project.

• Similarly, during the planning stage, not every single task in a project may be included; human error therefore limits the extent to which CPA assists with project management.

• Some projects are immense, making network diagrams complex and difficult to manage.

• Network analysis will only be helpful if the data used to construct the network diagrams are complete and reliable.

 Top tip!

Note that students are not expected to construct network diagrams in the exams. If assessed, the network diagram will be provided as part of the examination paper with students required to complete the calculations. This can include calculating the earliest start time (EST), latest finish time (LFT), as well as float times (total and free float).

 Top tip!

Students are expected to understand the purpose of dummy activities. As its name suggests, a dummy activity is not an actual task in a project but is used to ensure logical dependencies are accurately represented in a network diagram. There are no time or resources needed for a dummy activity. Do note that dummy activities can be included in network diagrams in the final examinations.