Activity Costing-Key to Progress in Critical Path Analysis

Realization of the full potential of critical path techniques involves six essential aspects. These are 1) network planning, 2) time and resource planning, 3) optimum scheduling and allocation, 4) progress reporting, 5) analysis and control of progress, and 6) statistical analysis to improve time and resource planning. All of these aspects are not currently being employed and thus full benefits are not accruing to the user. The principal reason for this is the lack of data on which to base time-cost trade-off relationships. This in turn is due to the present structure of accounting and control systems which do not relate costs with the work accomplished. Several efforts employing enumerative cost models are currently in existence or under development which largely overcome the shortcomings of present accounting and control systems. The enumerative cost model collects cost by network activity and compares actual expenditure and schedule progress with that planned in order to determine program status in an accurate and unambiguous fashion. In addition, this type of model will provide the raw materials for construction of the time-cost relationships required for optimization provided that the non-comparability of activities problem can be overcome.