BBSE3007 Project & Contract Management

Exercise on CPM and PERT

Consider a project involving the following activities and precedence relationship. The cost of each
activity is listed.

Duration (week)
Precedence Cost per week
Activity Optimistic Most likely Pessimistic
Activity ($/week)
(a) (m) (b)
A - 5,000 2 3 5
B A 3,000 3 5 8
C A 6,000 4 6 9
D B 2,000 1 2 4
E C 4,000 3 4 7
F D 7,000 1 2 4
G D 4,000 2 3 5
H G 8,000 1 2 3
J B,E 6,000 4 6 8
K E,F,H 5,000 2 4 7
L J 3,000 2 3 6

a) Sketch the network using Activity-On-Arrow (AOA) and Activity-On-Node (AON)

b) Using CPM, by performing forward-pass and backward-pass computations, conduct a critical
path analysis of the network. Find the critical path of the project and determine the overall
duration.
c) Plot the Gantt Chart using Earliest Start Time (ES) with Float.
d) Determine the cost distribution using Earliest Start Time (ES) and Latest Start Time (LS), then
sketch the cumulative cost against time (S-curve).
e) Perform a Program Evaluation and Review Technique (PERT) to determine the expected
total duration of the project.
f) By using uncertainty analysis, determine the probability that the project will complete
between 2 weeks earlier and 4 weeks later than the expected duration.
Solution
a) The AOA is sketched as follows:

The AON is sketched as follows:

b) Use the CPM Forward and Backward Pass Computation as follows. The Critical Path is shown
(thick line path).

The total duration = 22 weeks.

BBSE3007 Project and Contract Management

CPM / PERT Exercise Page 2
c) The Gantt Chart with Earliest Start Time with Float is shown.

d) The cost distribution is conducted by assigning the cost of the activities per week (See
attached). The S-curve is plotted accordingly.

200,000

180,000

160,000

140,000

120,000
Early Start
100,000
Late Start
80,000 Target

60,000

40,000

20,000

0
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21

BBSE3007 Project and Contract Management

CPM / PERT Exercise Page 3
e) The Expected Duration (te) and the variance (v) is computed in the PERT.

Duration (week) Expected

Precedence Variance
Activity Optimistic Most likely Pessimistic Duration
Activity ( )
(a) (m) (b) (te)
A - 2 3 5 3.17 0.25
B A 3 5 8 5.17 0.69
C A 4 6 9 6.17 0.69
D B 1 2 4 2.17 0.25
E C 3 4 7 4.33 0.44
F D 1 2 4 2.17 0.25
G D 2 3 5 3.17 0.25
H G 1 2 3 2.00 0.11
J B,E 4 6 8 6.00 0.44
K E,F,H 2 4 7 4.17 0.69
L J 2 3 6 3.33 0.44
Total in
critical path
( ) 2.26
Deviation
1.50

The total expected duration = 23.00 weeks.

f) The standard deviation S = 1.50 weeks

Therefore,
2 weeks earlier than the expected duration = (2/1.50) = 1.33S from the normal; &
4 weeks later than the expected duration = (4/1.50) = 2.67S from the normal.

Total area = 0.4082 + 0.4962 = 0.9044

Thus, the chance of having the project completed between 2 weeks earlier and 4 weeks later
than the expected duration is around 90%.

BBSE3007 Project and Contract Management

CPM / PERT Exercise Page 4
EarlyStartTime
weekly Duration Week
Activity cost 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22
A 5,000 3 5,000 5,000 5,000
B 3,000 5 3,000 3,000 3,000 3,000 3,000
C 6,000 6 6,000 6,000 6,000 6,000 6,000 6,000
D 2,000 2 2,000 2,000
E 4,000 4 4,000 4,000 4,000 4,000
F 7,000 2 7,000 7,000
G 4,000 3 4,000 4,000 4,000
H 8,000 2 8,000 8,000
J 6,000 6 6,000 6,000 6,000 6,000 6,000 6,000
K 5,000 4 5,000 5,000 5,000 5,000
L 3,000 3 3,000 3,000 3,000
Total 5,000 5,000 5,000 9,000 9,000 9,000 9,000 9,000 8,000 6,000 15,000 15,000 8,000 14,000 14,000 11,000 11,000 11,000 11,000 3,000 3,000 3,000
Cummulative 5,000 10,000 15,000 24,000 33,000 42,000 51,000 60,000 68,000 74,000 89,000 104,000 112,000 126,000 140,000 151,000 162,000 173,000 184,000 187,000 190,000 193,000

LateStartTime
weekly Duration Week
Activity cost 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22
A 5,000 3 5,000 5,000 5,000
B 3,000 5 3,000 3,000 3,000 3,000 3,000
C 6,000 6 6,000 6,000 6,000 6,000 6,000 6,000
D 2,000 2 2,000 2,000
E 4,000 4 4,000 4,000 4,000 4,000
F 7,000 2 7,000 7,000
G 4,000 3 4,000 4,000 4,000
H 8,000 2 8,000 8,000
J 6,000 6 6,000 6,000 6,000 6,000 6,000 6,000
K 5,000 4 5,000 5,000 5,000 5,000
L 3,000 3 3,000 3,000 3,000
Total 5,000 5,000 5,000 6,000 6,000 6,000 9,000 9,000 9,000 7,000 7,000 6,000 6,000 10,000 10,000 10,000 21,000 21,000 11,000 8,000 8,000 8,000
Cummulative 5,000 10,000 15,000 21,000 27,000 33,000 42,000 51,000 60,000 67,000 74,000 80,000 86,000 96,000 106,000 116,000 137,000 158,000 169,000 177,000 185,000 193,000

TargetTime
weekly Duration Week
Activity cost 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22
A 5,000 3 5,000 5,000 5,000
B 3,000 5 1,500 3,000 3,000 3,000 3,000 1,500
C 6,000 6 6,000 6,000 6,000 6,000 6,000 6,000
D 2,000 2 1,000 2,000 1,000
E 4,000 4 4,000 4,000 4,000 4,000
F 7,000 2 7,000 7,000
G 4,000 3 2,000 4,000 4,000 2,000
H 8,000 2 4,000 8,000 4,000
J 6,000 6 6,000 6,000 6,000 6,000 6,000 6,000
K 5,000 4 2,500 5,000 5,000 5,000 2,500
L 3,000 3 3,000 3,000 3,000
Total 5,000 5,000 5,000 6,000 7,500 9,000 9,000 9,000 9,000 6,500 6,000 7,000 8,000 17,000 19,000 14,000 12,500 11,000 11,000 8,000 5,500 3,000
Cummulative 5,000 10,000 15,000 21,000 28,500 37,500 46,500 55,500 64,500 71,000 77,000 84,000 92,000 109,000 128,000 142,000 154,500 165,500 176,500 184,500 190,000 193,000