Critical path analysis, also known as network analysis, is a project planning tool that shows the minimum time period needed for a project’s completion. (Similar to Gantt charts in some way)

It helps give an overview of tasks involved, their deadlines, their order, other interim deadlines and buffer/float time needed in case of delays.

<aside> 📌 The IB Business Management syllabus states that you should be able to complete and analyse a critical path diagram, but that constructing a full critical path diagram is not expected.

Some activities in this section, however, ask you to construct a critical path. Practising this will ensure that you have a deep understanding of the structure and meaning of the numbers.

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CPA Construction

Basics

Simple CPA for Project X

Summary of information from CPA for Project X

• Drawn from left to right.
• Circle nodes = the start and end of each task.
  • Earliest starting time (EST). Upper right corner = Indicates the earliest time that a task can begin (0, 1, 2, 3, 4, etc)
  • Latest finishing time (LFT). Lower right corner
    • For last task, upper and lower are filled in with the same number
• Lines
  • Letters above the line = task labelled (A, B, C, D, etc)
  • Number under line = time needed for task (e.g. days, hours, etc)
• Float time
  • Free float, the amount of time that an activity can overrun its time estimate, but not delay the next activity = EST of the next task – EST of task X – duration of task X.
  • Total float, the amount of time that an activity can overrun its time estimate, but not delay the whole project = LFT of task X – duration of task X – EST of task X

How to identify critical path in the exam

1. Write out the critical path with arrows
2. Or use hash marks (//) to indicate the critical path on the diagram itself.

Two different ways of identifying the critical path for Project X.

Complex version

Critical path diagram with a dummy activity included

Dummy activity is an activity in a critical path diagram that has no duration and has been added to show the relationships between real activities.

The earliest start time for an activity is useful for businesses using just-in-time (JIT) strategies for lean production. Deliveries of resources can be planned to arrive just before the earliest start time for the activity that needs them. That way, storage costs for stock (inventory) can be reduced.