Impact of Graphs and Network in Minimizing Project and Product Cost

www.theijbmt.com 1|Page
The International Journal of Business Management and Technology, Volume 2 Issue 1 January 2018
Research Article Open Access
Impact of Graphs and Network in Minimizing Project and
Product Cost
Petrina (Pei-Chun) C. Feng
Dept. of Administrative Management, Central Police University, Taoyuan, Taiwan
Abstract
The world has many natural systems that are so complex to be understood easily. This creates a need to have simple
principles or systems that capture the complexity of the world. The simple systems make it easier for many people to
understand the world by representing the complex world in a more straightforward way (Stefan, 2003). Many objects
and projects are seen to be a network of processes or substances. Graphs and networks have been used widely in
different projects for different reasons by project managers mostly. There are techniques such as critical path analysis
that make use of graphs and networks and are applied by project managers and all the staff involved in projects. These
methods are used to ensure smooth planning and control of projects. However, the techniques have to be applied
correctly to achieve the desired objective. This paper looks at the impact of graphs and networks in minimizing the costs
of a project or product. From this research, it can be inferred that the techniques such as critical path method, that make
use of graphs and networks, play a significant role in determining and hence reducing the product cost. This is done by
making the right decisions regarding the resources and time most appropriate for a project. The paper shows clearly
how these techniques are applied in a project to determine project duration and hence minimize the cost.
Keywords: Graphs, Minimizing cost, Network.
I. INTRODUCTION
The world has many natural systems that are so complex to be understood easily. This creates a need to have simple
principles or systems that capture the complexity of the world. The simple systems make it easier for many people to
understand the world by representing the complex world in a more straightforward way(Stefan, 2003). One of these
simple principles is networks.
The world is believed to be an interconnection of many things that eventually form a network. Some of the
examples of these networks in the world include the interconnection of molecules that are contained in a living cell,
interconnection of computers which share information all over the world, the nerve cells that are found in the brains of
each human being, the social networks such as twitter where many people all over the world are interconnected
(Newman,2010).
Graphs, on the other hand, may be regarded as tools which are used to study the interrelationships between objects.
Graphs are another simple system that is used to represent the complexities in the word. There are several types of
graphs and each type of graph has its use. The theory used in graphs represents both local and global characteristics of
an object. In such a case when numerical characteristics are associated with points or lines in a graph, we may end up
generating a model that may be a mathematical, physical or social nature (Saaty & Busacker, 1965). Graphs are majorly
used to study networks. In a business set up, project networks make use of graphs where we have nodes and edges
connecting the nodes. Graphs, in this case, can be used to determine the project with minimal costs.
This research paper discusses graphs and networks and how they can be used to determine a project that has
minimal cost. An organization can use this to decide on what projects to invest in and determine the approximate
amount that a project is likely to cost.
II. GRAPH THEORY
A graph can be defined as a countable number of edges and vertices. It can be represented mathematically as
G(V,E) where V is a set of vertices also referred to as nodes and E is a set of edges that interconnect the nodes or are used
to show associations between these nodes. The edges may be representing things such as lengths, weights, costs or
heights. There are two types of graphs where the edges show no direction. Trees in mathematics can be referred to as the
undirected graphs. A rooted tree may, however, be directed if the edges point towards the root or away from the root.

Impact of Graphs and Network in Minimizing Project and Product Cost
On the other hand, the directional graphs refer to the kind of graphs where the edges are directional (Bollobas, 1979).
The other types of graphs are as shown below.
In graph, therefore, can be thought of as a collection of vertices that are joined together by edges. The number of edges
gives the size of the graph. The number of vertices represents the order of the graph G (Stefan, 2003). Graphs are mostly
used to study networks and different kinds of networks have different kinds of graphs that are most suitable for them.
The graphical theory has a wide range of applications which include biochemistry, mathematics, computer science and
electrical engineering among others.
In real life, the nodes are used to represent projects or activities, and the edges are used to describe the process costs,
lengths or weights. From the network of the projects or project activities in a graph, the minimum costs, length or weight
represented by the edges can be determined. This can be done by the used of short path problem, which refers to finding
a path between two vertices whose sum of the edges or weights has been minimized. There are several algorithms for
solving this problem which includes, Dijkstra’s algorithm, Bellman-Ford algorithm, A search algorithm, Floyd-Warshall
algorithm, Johnson’s algorithm, and Viterbi algorithm. Each of these algorithms has a formula for solving the short path
problem (MacCrimmon, 1987). An adjacency matrix which is a two-dimensional matrix can be used to generate or
represent a graph. A graph can also be represented using an adjacency list which is an array of pointers that are used to
describe vertices that are adjacent to Vi (Lun et, al. 2004). For the above graph, the adjacency matrix would be as below.

III. DISCUSSION
This research paper aims at investigating the role of the graphs and the network to decide on the best projects or
products to invest in at the minimum cost. Project networks make use of node where different related nodes are
interrelated through the arcs. Nodes are the activities while the arcs (arrows or edges) represent the prioritized
relationships (Gabriel, 2009). Nodes are also responsible for receiving, processing and replicating the packets to other
nodes through a given direction (Lun & Medard, 2014).
Several ways can be used to achieve at minimum cost in a network. These methods include the Critical Path
Method (CPM). For minimum cost, there is a need to identify the critical path within the network by use of appropriate
graphing. This is achieved through identification and action on the instances that would cause a delay in the entire
project when they delay. The critical path saves the time costs through ensuring that the task is accomplished in the least
time (James, 1959).
Another viable way to achieve this is through solving network flow problem where restricted algebraic operations
are performed at the nodes allowing it to process the received packets and enable concurrent transmission and
replications (Koetter, & Medard2003). Network decoding decouples the problems enabling the project to be cost-
effective (Lun et, al. 2004).
IV. THE GENERAL NETWORK FLOW PROBLEM SOLUTION
This kind of problem arises from the fact that products are manufactured from a plant and are expected to reach the
destination which is the consumer. There are however intermediaries such as warehouses and distribution centers that a
product goes through before it gets to the consumer. This, therefore, creates a network where in the graph, the nodes are
used to represent the sources intermediaries and destination of a product and the edges represent the network channels.
In a practical scenario, the nodes will represent the product source, intermediary and destination and the edges or arcs
will represent the flow capacity and the cost per unit from one node to the next. The aim of this is to determine the
minimum cost flow problem. In the example below, 1 is the source node, and 4 and 5 are the destination nodes. 2 and 3
are the intermediaries or transshipment nodes. Node 1 has 20 products to ship, and node 4 and 5 require five products
and fifteen products respectively, which is indicated by the negative signs. The objective is to find the minimum cost
shipment method (Fondahl, 1961).

The problem is then transcribed into a formal linear program after generating the graphical representation into a
tabular form using an adjacency matrix. The table for the above is as shown below;
The linear equations are then generated from the table above where the +1 coefficient shows the node from which
the arc emanates and -1 shows the node to which the arc is an incident. Linear equations are formed and minimized
from the above matrix, and hence the minimum product cost is determined.
V. CRITICAL PATH METHOD (CPM)
This is a technique that is used for project modeling, and it was developed in the 1950s. The critical path method
was developed by Morgan R. Walker, James E. Kelly Jnr who related their memories around 1989. CPM has very many
applications and can be sued on different kinds of projects including research projects, construction projects,
engineering projects, software development projects among others (MacCrimmon, 1987).
This method is widely applied in planning and control of big projects whose duration is known or can be
determined. Before a critical path is identified, there are three things that have to be done. This includes breaking down
the project into basic activities, identifying the predecessor activity that is immediate to each activity and finally does an
estimation of the duration of every activity (Magallon, 2009). The activities here are the nodes, and these nodes are
connected by the edges with each edge indicating the duration of each activity (Hartley, 1966). The project network will
have the start node and the finish node in the network of activities. A path, in this case, can be defined as one of the
routes that lead one from the start node to the finish node. From the values in a project network, we can calculate the
longest and shortest path from the start node to the finish node.
CPM uses the values that are contained in a network diagram to calculate the longest path of the activities that are
planned to take place during the project. CPM also calculate the earliest or latest that each activity can start without
necessarily making the project to be lengthier. This process makes it easier to determine which activities are critical, i. e.,
the activities on the longest path and activities which can be delayed without making the project longer and these
activities can be said to have the total float (Fondahl, 1961).
The critical path method helps in determining the shortest time that a project can take. Any activity which falls on
the critical path cannot be delayed. If an activity on the critical path is delayed. It has a direct impact on the length of the
X12 X13 X23 X24 X25 X34 X35 X45 X53 Right
hand side
Node 1 1 1 20
Node 2 -1 1 1 1 0
Node 3 -1 -1 1 1 -1 0
Node 4 -1 -1 1 -5
Node 5 -1 -1 -1 1 -15
Capacities 15 8 ∞ 4 10 15 5 ∞ 4
Objective
function
4 4 2 2 6 1 3 2 1 (Min)

project or completion date. A project can have several critical paths. The diagram blow shows a network of activities and
the critical path.
Activities A and E are the start and finish activities respectively. Activities F, G, and H are not on the critical path,
activities A, B, C, D and E fall on the critical path. If an activity in the critical path has no parallel activity, then the drag
of that activity is the duration of the activity.
On the other hand, if an activity on the critical path has a parallel activity, then its drag is the duration of whichever
activity is less (Hofmann, 1993).
From the computations obtained from the graph above, a project manager is able to decide on what activities can be
run in parallel and also see how they can reduce the time of the activities in the critical path. The lesser the time used in
a project, the more the resources required and therefore the cost of the project is expected to go up. On the other hand, if
we increase the duration of project the number of resources required to complete the project such as labor will reduce
and hence the cost of the project is expected to go down (James, 1959).
VI. CONCLUSION
Graphs and Networks are very applicable in planning and control of projects and products. This is very useful and
helps in making financial and other forms of decisions regarding projects. They help in determining unnecessary costs
which need not be incurred while carrying out a project’s object. Graphs and networks play a vital role in minimizing
project and product costs.
REFERENCES
[1] Stefan Bornholdt, H. G. (2003). Handbook of Graphs and Networks. Berling: Wiley VCH GmbH& Co.
[2] Newman, M. (2010). Networks, An Introduction. Oxford New York: Oxford University Press.
[3] Saaty, T. L., & Busacker, R. G. (1965). Finite graphs and networks: an introduction with applications. McGraw-Hiss
Book Company.
[4] Bollobas, B. (1979). Graph Theory. New York: Springer Verlag Inc.
[5] MacCrimmon, K. R. (1987). Critical Path Analysis. In M. M. John Eatwell, The New Palgrave: A Dictionary of Economics
(pp. 1-3) Palgrave Macmillan UK.

[6] Lun, D. S., Medard, M., Ho, T., & Koetter, R. (2004). Network coding with a cost criterion. In Proc. 2004 International
Symposlum on Information Theory and its Applications. ISITA 2004.
[7] Gabriel, S. A. (2009). Management Science Applications in Project Management Lectures 5-7. Project Management LP
Models in Scheduling, Integer Programming.
[8] Lun, D. S., & Medard, M. (2014). Achieving Minimum-Cost Multicast: A Decentralized Approach Based on
Network Coding. Conference Paper in Proceedings. IEEE INFOCOM.
[9] James E. Kelley, J. M. (1959). Critical Path Planning and Scheduling. New York.
[10] Koetter, R., & Medard, M. (2003). An algebraic approach to network coding. IEEE/ACM Trans. Networking, 11(5),
782-795.
[11] Fondahl, J. W. (1961). Non-Computer Approach to the Critical Path Method for. Stanford University.
[12] Magallon, J. S. (2009). Critical Path Method.New York.
[13] Hartley., A. W. (1966). A Statistical Theory for PERT Critical Path Analysis. Texas: Published Online.
[14] Golumbic, M. C. (2004). Algorithmic Graph Thoery and Perfect Graphs. Amsterdam: Elsevier B. V.
[15] Hofmann, P. (1993). Critical Path Method: An important Tool for Coordinating Clinical Care. The Joint Commission
Journal on Quality Improvement, 1-16.
[16] Tarjan, R. E. (1983). Data Structures and Network Algorithms. Murray Hill, New Jersey: RIAM.

Impact of Graphs and Network in Minimizing Project and Product Cost

More Related Content

What's hot (18)

Similar to Impact of Graphs and Network in Minimizing Project and Product Cost (20)

More from The International Journal of Business Management and Technology (20)

Recently uploaded (20)

Impact of Graphs and Network in Minimizing Project and Product Cost