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PROJECT MANAGEMENT
CPM & PERT
Aneesh Chinubhai
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Origin
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Real projects
Large scale
One time, Non-routine
Complex
Inter-dependent
Planning, scheduling and control of activities with respect to the
whole
Network Planning
CPM: DuPont, chemical plant maintenance (1957)
PERT: Booz, Allen & Hamilton with the U. S. Navy to track the Polaris
missile project (1958)
Project Characteristics
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Single unit
Many related activities
Difficult production planning and inventory control
General purpose equipment
High labor skills
Projects
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Definitions
Project
A series of related jobs usually directed toward some
major output and requiring a significant period of time
to perform
Project Management
Planning, directing, and controlling resources (people,
equipment, material) to meet the technical, cost, and
time constraints of the project
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Project Constraints
Managing projects is, it is
said, like juggling three
balls cost, quality and
time.
Program management is
like organizing a troupe of
jugglers all juggling three
balls and swapping balls
from time to time.
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Project Management
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Planning
goal setting, defining the project, team organization
Scheduling
relates people, money, and supplies to specific activities and
activities to each other
Controlling
monitors resources, costs, quality, and budgets; revises plans
and shifts resources to meet time and cost demands
Project Planning
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Project Scheduling
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Project Controlling
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Tools
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Budgets
Delayed activities report
Slack activities report
Time/cost estimates
Budgets
Engineering diagrams
Cash flow charts
Material availability details
CPM/PERT
Gantt charts
Milestone charts
Cash flow schedules
Work Breakdown Structure (WBS)
A project starts out as a statement of work (SOW)
SOW contains
a written description of the objectives to be achieved
a brief statement of the work to be done
a proposed schedule specifying the start and
completion dates
performance measures in terms of budget and
completion steps (milestones)
written reports to be supplied
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WBS
Task
A subdivision of a project, usually not longer than several months in
duration and is performed by one group or organization
A subtask may be used if needed to further subdivide the project into
more meaningful pieces
Work Package
A group of activities combined to be assignable to a single
organizational unit
Milestones
Specific events to be reached at points in time
Typically used to track performance
Activities
pieces of work that consume time
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Work Breakdown Structure (WBS)
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Hierarchical structure
Defines the hierarchy of project tasks, subtasks, and work packages
Completion of one or more work packages results in the completion
of a subtask
Completion of one or more subtasks results in the completion of a
task
Finally, the completion of all tasks is required to complete the project
An Example of a WBS
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WBS in Microsoft Project
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Sample WBS
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Gantt Chart
Developed by Henry Gantt in 1914
Precursor of the CPM/PERT methodology
A chart with a bar for each project activity that shows
the passage of time
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Gantt Chart Building a House
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CPM/PERT Methodology
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Activity analysis
What is an activity?
Network diagramming
A-O-A
A-O-N
Node numbering
Loops
What is the difference between CPM and PERT?
Steps / Methodology
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Steps
Identify each activity to be done in the project and estimate
how long it will take to complete each activity
Determine the required sequence of activities and construct
a network reflecting the precedence relationships
Identify immediate predecessors
Determine the early start/finish and late start/finish
schedule
Determine the critical path
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Sample Project
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Network Diagramming
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Networks typically flow from left to right
An activity cannot begin until all of its preceding
activities are complete
Arrows indicate precedence and flow and can cross
over each other
Identify each activity uniquely using an identifier
greater than its predecessors
Looping is not allowed
Conditional statements are not allowed
Start and stop nodes can be used
Comparison of A-O-N and A-O-A
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Activity on Activity Activity on
Node (AON) Meaning Arrow (AOA)
A comes before B,
which comes
before C
(a) A B C
B A C
A and B must both be
completed before C
can start
(b)
A
C
C
B
A
B
B and C cannot
begin until A is
completed
(c)
B
A
C
A
B
C
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Comparison of A-O-N and A-O-A
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Activity on Activity Activity on
Node (AON) Meaning Arrow (AOA)
C and D cannot
begin until both A
and B are
completed
(d)
A
B
C
D
B
A C
D
C cannot begin until
both A and B are
completed; D cannot
begin until B is
completed. A dummy
activity is introduced
in AOA
(e)
C A
B D
Dummy activity
A
B
C
D
Comparison of A-O-N and A-O-A
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Activity on Activity Activity on
Node (AON) Meaning Arrow (AOA)
B and C cannot
begin until A is
completed. D
cannot begin until
both B and C are
completed. A
dummy activity is
again introduced in
AOA.
(f)
A
C
D B
A B
C
D
Dummy
activity
Dummy Activities
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Proper representation of precedence
relationships
Dummy Activities (contd.)
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Unambiguous beginning and end
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Construct a Network Diagram
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Activity Immediate Predecessors
A -
B -
C A
D B
E C
F C
G D, E
Construct a Network Diagram
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A, B, C are the first activities of the project and can
start simultaneously
A and B precede D
B precedes E, F, and H
F and C precede G
E and H precede I and J
C, D, F, and J precede K
K precedes L
I, G, and L are the terminal activities of the project
Record the following information
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Record the following information for each node
Forward Pass
Determines the earliest times and the total duration of the
project
Backward Pass
Determines latest times and where delays are possible
ES, LS EF, LF
Critical Path Scheduling
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ES/EF
Earliest possible time that an activity can start/finish
EF = ES + activity time
LS/LF
Latest possible time that an activity can start/finish
LS = LF - activity time
Slack
Time that an activity can be delayed without delaying
project completion
Slack = LS - ES = LF - EF
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Critical Path
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Critical activities have zero (or least) slack
Alternatively, it is the longest path through the
network
Cannot be delayed without delaying the completion
of the project
Could also be those activities with least slack
Resource Constraints
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Crashing
Minimize crashing cost
Subject to:
Precedence
Target completion
Crashing allowed
Develop a time-cost tradeoff
curve
Completion Time
A
d
d
i
t
i
o
n
a
l

C
o
s
t
Manual Crashing
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Activity Normal Time Crash Time Normal Cost Crash Cost
A 2 1 6 10
B 5 2 9 18
C 4 3 6 8
D 3 1 5 9
Formulation
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n
j
= normal time for activity j
m
j
= crash time for activity j
s
j
= cost per unit reduction of activity j
y
j
= units of time by which activity j is
shortened
x
j
= finish time for activity j
T = target project completion time
Re-solve for various T
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Example
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Solution
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Minimize s
a
y
a
+s
b
y
b
+s
c
y
c
+s
d
y
d
+s
e
y
e
+s
f
y
f
subject to
x
f
T
x
a
n
a
- y
a
y
a
n
a
- m
a
x
b
x
a
+ n
b
- y
b
y
b
n
b
- m
b
x
c
x
a
+ n
c
- y
c
y
c
n
c
- m
c
x
d
x
b
+ n
d
- y
d
y
d
n
d
- m
d
x
e
x
c
+ n
e
- y
e
y
e
n
e
- m
e
x
f
x
d
+ n
f
- y
f
y
f
n
f
- m
f
x
f
x
e
+ n
f
- y
f
PERT
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Probabilistic (Beta)
Optimistic (a)
P(t a) 0.01
Pessimistic (b)
P(t a) 0.01
Modal (m)
CLT
n?
Distribution of completion time?
Simulation
Example
The optimistic, modal
and pessimistic activity
duration for the
following network are
shown in the table
Calculate the expected
completion time of the
project
Calculate the standard
deviation of project
completion time
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Activity Optimistic Modal Pessimistic
A 8 10 14
B 3 7 8
C 10 16 24
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Uncertain Activity Times
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Activity Durations
(Normally Distributed)
A B C D E F G Activities
4.0 7.0 5.0 6.0 3.0 6.0 4.0 Mean ()
1.41 3.00 1.73 2.00 1.00 1.73 1.41 Stdev. ()
(1) What is the probability that path A-C-F is the critical path?
(2) What is the probability of completing the project in less than 20 days?
Project Management Software
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Primavera from Oracle
Microsoft Project
OpenProj (open source)