Network Practice Exercise 1: Computing Critical Path Drag, Drag Cost, EMV and the DIPP

With the world all shut down, I thought I’d post a Practice Exercise I’ve used in my Project Management graduate classes.  

This exercise is based on the network schedule shown above and was designed to help students understand how to USE the information from a simple (all Finish-to-Start relationships) network schedule, and to compute critical path drag, drag cost, expected monetary value (EMV) and the project’s starting DIPP (Devaux’s Index of Project Performance).

(Quick definitions: drag is the amount of time an item is adding to the project duration, drag cost is the amount by which that item's drag is reducing the expected monetary value of the project investment, and the DIPP is the project's EMV divided by its cost estimate-to-complete.)

 Fell free to use this exercise in your own classes. (It would be appreciated if you credit the source.)

 If folks like this, please let me know and I will post more complex ones.

 Scroll down for answers.

1.      Write in the critical path drag of each activity below (if zero, write 0).

 B = ______ C = ______ D = ______ E = ______

 F = ______ G = ______ K = ______

 2.      If, during project performance, Activities D and H BOTH take 10 days longer than planned, by how much would project completion be delayed?

The project budget is $150,000. The expected monetary value (EMV) if finished on Day 63 is $500,000. Every day later results in a delay cost of $50,000. Each day earlier than 63 results in an acceleration premium of $10,000.

3.      What is the project’s starting expected monetary value (EMV) with the 65 day schedule?

 ____________________________________________________________

 4.      What is the project’s starting DIPP (Devaux’s Index of Project Performance) with the 65 day schedule?

 _______________________________________

 5.      What is the Drag Cost of each of the following activities with the 65 day schedule? (If zero, write 0.)

 B = _________ C = _________ D = _________ E = _________

 F = _________ G = _________ K = _________

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ANSWERS

1.   Write in the critical path drag of each activity below (if zero, write 0).

 B = ___5___ C = ___3___ D = ___0___ E = ___7___

 F = ___9____ G = ___2___ K = ___13___

 2.       If, during project performance, Activities D and H BOTH take 10 days longer than planned, by how much would project completion be delayed? 15 days longer

The project budget is $150,000. The EMV if finished on Day 63 is $500,000. Every day later results in a delay cost of $50,000. Each day earlier than 63 results in an acceleration premium of $10,000.

3.  What is the project’s starting expected monetary value (EMV) with the 65 day schedule?

 ________________________($500,000 – 2 * $50,000) = $400,000_______________

4.  What is the project’s starting DIPP (Devaux’s Index of Project Performance) with the 65 day schedule?

 __________($500,000 – 2 * $50,000) / $150,000 = 2.67________________________

5.  What is the drag cost of each of the following activities? (If zero, write 0.)

 B      ___5 = (2 * $50K) + (3 * $10K) = $130,000__

 C      ___3 = (2 * $50K) + (1 * $10K) = $110,000__

 D     _____0____

 E      ___7 =(2 * $50K) + (5 * $10K) = $150,000__

 F       ___9 = (2 * $50K) + (7 * $10K) = $170,000__

 G       __2 = (2 * $50K) = $100,000__

 K      ___13 = (2 * $50K) + (11 * $10K) = $210,000__