PERT/CPM

AGENDA
MGT 606

1. Motivation PERT/CPM
2a. Digraphs (Project Diagrams) 2b. PERT 3a. CPM--Starts, Finishes, Slacks, 3b. Resource Allocation 4. CPM with Crashing 5. PERT Simulation

1. Motivation for PERT/CPM Use

Definition of a Project Organizational Trajectories and Change
The Environment Adaptation and Agility
Reactive Strategy Proactive Strategy

Ubiquity of Projects Dealing with Project Complexity

2. PERT Example
A. AON Network Diagrams: General Foundry Diagramming a projects network of activities
Installation of air-pollution control equipment @ General Foundry, Milwaukee

Activity A B C D E F G H

Immediate Description Predecessor build internal components ___ modify roof and floor ___ construct collection stack A pour concrete and install frame B build hi-temp burner C install control system C install air-pollution control device D,E inspect and test F,G

2. PERT Example
A. AON Network Diagrams (continued): General Foundry

A
edge or arc

Node A represents Activity A

Node C represents Activity C The edge or arc represents the precedence relationship between the two activities

2. PERT Example
A. AON Network Diagrams (continued): General Foundry continued A C

D F

A B

C
E D

2. PERT Example
A. AON Network Diagrams (continued): General Foundry concluded

C
H E

B D G

2. PERT Example
A. AON Network Diagrams (continued) The General Foundry project network began on more than one node and ended on a single node. Other variants are: B A C D E Beginning with one node and ending with more than one node.

F
Beginning with more than one node and ending with more than one node.

A C B D

E F

2. PERT Example
A. AON Network Diagrams (concluded) Sometimes the following convention is used. A Start C D

E Finish

The Start and Finish boxes tie the network off at its ends and give one a sense that the network has defined points in time at which the project begins and ends . The use of such a convention is not necessary and will generally be avoided.

8b

2. PERT Example
A2. AOA Network Diagrams (continued): General Foundry

Activity A
edge or arc

2
Node 2 represents the ending of Activity A

Node 1 represents the beginning of Activity A

The edge or arc represents Activity A

8c

2. PERT Example
A2. AOA Network Diagrams (continued): General Foundry continued

2 C
2 3

1
A 1

B C 4 E 3

2 B

8d

2. PERT Example
A2. AOA Network Diagrams (continued): General Foundry concluded

2
A 1 B 3

4 F

E
D G

2. PERT Example
A2. AOA Network Diagrams (concluded)

8e

Note that the General Foundry project network on slide #6 began on a single node and ended on a single node. When constructing Network diagrams using the AOA approach, this convention is followed--network diagrams begin on a single node and end on a single node.

Note also a second convention in AOA Network diagram construction. Two nodes are connected by one and only one activity (edge or arc). Thus, Act. I.P. A C C A A __ B __ d1 C A,B B B D D B D No, and why not? Rather, this is preferred and why?

Finally, a third convention. An arc cannot emanate from or terminate at more D than one node. D Act. I.P. NO! d1 A A A __ C C B __ d2 B C A,B B E E D A E B

2. PERT Example
B. Project Completion Times and Probabilities: General Foundry of Milwaukee
The duration time for each of a Projects activities in a PERT environment are estimated on the basis of most likely, pessimistic, and optimistic completion times. These times can be arrived at in various ways. A number of these ways contain substantial subjective components because it is often the case that little historical information is available to guide those estimates. The expected (value) duration time of an individual activity and its variation follow what is called a beta distribution and are calculated as follows:

E(ti) = (a + 4m + b) / 6 and var(ti) = (b - a)2 / 36

where a is the activitys optimistic completion time, m is the activitys most likely completion time, and b is the activitys most pessimistic completion time.

10

2. PERT Example
B. Project Completion Times and Probabilities: General Foundry of Milwaukee (continued)
Consider the following table of activities; immediate predecessor(s) (I.P.); optimistic, most likely, and pessimistic completion times for General Foundry; and the E(ti) and var(ti) for each activity. ACT A B C D E F G H I.P. Optimistic (a) Most Likely (m) Pessimistic(b) E(ti) __ 1 week 2 weeks 3 weeks 2 wks. __ 2 3 4 3 A 1 2 3 2 B 2 4 6 4 C 1 4 7 4 C 1 2 9 3 D,E 3 4 11 5 F,G 1 2 3 2 var(ti) 4/36 4/36 4/36 16/36 36/36 64/36 64/36 4/36

B. Project Completion Times and Probabilities: General Foundry of Milwaukee (continued)

From the reduced version of General Foundys PERT table., the E(ti) for each activity can be entered into the projects network diagram.

2. PERT Example
var(ti) 4/36 4/36 4/36 16/36 36/36 64/36 64/36 4/36

11

ACT A B C D E F G H

I.P. __ __ A B C C D,E F,G

(a) (m) (b) E(ti) 1 2 3 2 2 3 4 3 1 2 3 2 2 4 6 4 1 4 7 4 1 2 9 3 3 4 11 5 1 2 3 2

A 2 B 3

C 2 D 4

F 3 E 4 G 5 H 2

Inspection of the network discloses three paths thru the project: A-C-F-H; A-C-E-G-H; and B-D-G-H. Summing the E(ti) on each path yield time thru each path of 9, 15, and 14 weeks, respectively. With an E(t) = 15 for A-C-E-G-H, this path is defined as the critical path (CP) being the path that govens the completion time of the project . Despite the beta distribution of each activity, the assumption is made that the number of activities on the CP is sufficient for it to be normally distributed with a variance equal to the sum of the variances of its activities only, var(t) = 112/36 = 3.11.

2. PERT Example
B2. Project Completion Times and Probabilities: General Foundry of Milwaukee (continued)

11b

From the reduced version of General Foundys PERT table., the E(ti) for each activity can be entered into the projects network diagram. ACT I.P. (a) (m) (b) E(ti) var(ti) A __ 1 2 3 2 4/36 C2 4 F3 B __ 2 3 4 3 4/36 2 H2 2 A C A 1 2 3 2 4/36 E4 6 7 D B 2 4 6 4 16/36 1 E C 1 4 7 4 36/36 G5 5 3 F C 1 2 9 3 64/36 3 B D4 G D,E 3 4 11 5 64/36 H F,G 1 2 3 2 4/36 critical path Inspection of the network discloses three paths thru the project: A-C-F-H; A-C-E-G-H; and B-D-G-H. Summing the E(ti) on each path yield time thru each path of 9, 15, and 14 weeks, respectively. With an E(t) = 15 for A-C-EG-H, this path is defined as the critical path (CP) being the path that governs the completion time of the project . Despite the beta distribution of each activity, the assumption is made that the number of activities on the CP is sufficient for it to be normally distributed with a variance equal to the sum of the variances of its activities only, var(t) = 112/36 = 3.11.

12

2. PERT Example
B. Project Completion Times and Probabilites: General Foundry (concluded)
Given General Foundrys E(t) = 15 weeks and var(t) = 3.11, what is the probability of the project requiring in excess of 16 weeks to complete?

P( X > 16) = 1 - P ( X < 16) = 1 - P ( Z < (16 - 15) / 1.76 = .57) = 1 - 0.716
where the value 1.76 is the square root of 3.11, the standard deviation of the expected completion time of General Foundrys project. The assumption being made is that summing up a sufficient number of activities following a beta distribution yield a result which approximates or a approaches a variable which is normally distributed--~N(,2)

13

3. CPM Example
A. Starts, Finishes, Slacks
E(arly)S(tart) -- earliest possible commencement time for a project activity. ES calculation -- beginning at the initial node(s) of a projects network diagram, conduct a forward pass where

ESj = ESi + ti

0 A 3 0=0+0

3 B 4
3=0+3

7 C 2
7=3+4

9 D 5 9=7+2

What if?

3 B 4 7 C 2

? D
5

ESD =

ESB + tB = 7 ESC + tC = 9
MAX

14

3. CPM Example
A. Starts, Finishes, Slacks
E(arly)F(inish) -- earliest possible time a projects activity can be completed.
EF calculation -- beginning at the initial node(s) of a projects network diagram , conduct a forward pass where

EFi = ESi + ti

0 A 3 3
3=0+3

3 B 7 4 7=3+4

7 C 9 2
9=7+2

9 D 14 5 14 = 9 + 5

15

3. CPM Example
A. Starts, Finishes, Slacks
E(arly) S(tarts), E(arly F(inishes) for Milwaukee Foundry . 4 4 F 3 E 4 G 5 13 H 2 15 7 ES EF

A 2 2

C 2

4 0 B 3 3 3

D
4

13

16

3. CPM Example
A. Starts, Finishes, Slacks
L(ate) F(inish) -- latest possible time an activity can be completed without delaying the completion time of the project.

LF calculation -- beginning at the final node, conduct a backward pass through the networks paths where

LFi = LFj - tj

A 3 3

3 B 4 7
7=9-2

7 C 2 9
9 = 14 - 5

3=7-4

9 D 14 5 1 4

A 3

B 4 ?

C 2 9

LFB =
D 5 14

LFC -tC = 7
LFD -tD =9
MIN

3. CPM Example
A. Starts, Finishes, Slacks
LS calculation -- beginning with the final node(s) of the network make a backward pass through the network where L(ate) S(tart) -- the latest possible time and activity can begin without delaying the completion time of the project.

17

LSi = LFi - ti
A 0 3 3
0=3-3

B 3 4 7
3 = 7 -4

C
7 2 9 9

D 5 14

7 = 9 -2

9 = 14 -5

3. CPM Example
A. Starts, Finishes, Slacks
E(arly) S(tarts)/ F(inishes) and L(ate) S(tarts)/F(inishes) for Milwaukee Foundry . 4 0 0 A 2 2 2 2 2 C 2 4 4 F 7 13 ES 4 3 4 3 4 D 4 7 E 13 H 8 8 LS LF 8
critical path

18

10 3

EF

15 15

0 1

B 3

13 2

G 13 5 13

18b

3. CPM Example
A2. Starts, Finishes, Slacks
E(arly)S(tart) -- earliest possible commencement time for a project activity. ES calculation -- beginning at the initial node(s) of a projects network diagram, conduct a forward pass where: ESj = ESi + ti 2 5 4 3 C D 3 7 9 B 0 A 4

ESj

0=0+0
node #

3=0+3 9 D5 4

7=3+4

9=7+2

B4 ESB + tB = 7 ESD = ESC + tC = 9

MAX

What if?

C2

18c

3. CPM Example
A2. Starts, Finishes, Slacks
E(arly)F(inish) -- earliest possible time a projects activity can be completed. EF calculation -- beginning at the initial node(s) of a projects network diagram , conduct a forward pass where: EFi = ESi + ti
EF
i

0 1 0

A3

3 2

3 B4

5 2 D C 9 4 9 3 7

ESj

3=0+3 3 4 3
What if?

7=3+4

9=7+2

node #

D4
7/6

5 7

F5

12 6 12 G3

3 4

E2
critical path

18d

3. CPM Example
A2. Starts, Finishes, Slacks
E(arly) S(tarts), E(arly F(inishes) for Milwaukee Foundry .
EF
i

ESj

2
node #

A2
0

C2

F3
7/13

E4
B3
3

13

H2

6 G5
critical path

15

15

D4

8/7

3. CPM Example
A2. Starts, Finishes, Slacks
L(ate) F(inish) -- latest possible time an activity can be completed without delaying the completion time of the project. LF calculation -- beginning at the final node, conduct a backward pass through the networks paths where:
LFi = LFj - tj
EFi LFi ESi node #

18e

A3
3

B4 7

C2 9

4
9 = 14 - 5

D5

14
14 5
14 = 14 - 0

0=3-3

3=7-4

7=9-2

What if?

C2 B4 ? 3 D5

4
LFB = LFC -tC = 7

14

LFD -tD =9
MIN

3. CPM Example
A2. Starts, Finishes, Slacks
L(ate) S(tart) -- the latest possible time and activity can begin without delaying the completion time of the following activity. LS calculation -- beginning with the final node(s) of the network make a backward pass through the network where:
LSi = LFi - ti
EFi LFi ESi LSj node #

18f

A3 1
0
0=3-3

B4
3 7

C2
7 9

4
9

D5
14

14

0
What if?

3=7-4

7 = 9 -2

9 = 14 -5

C2 B4 3
7/9

4
LSC,D LFC -tC = 7 LFD -tD = 9 =

D5 14

3. CPM Example
A2. Starts, Finishes, Slacks
E(arly) S(tarts)/ F(inishes) and L(ate) S(tarts)/F(inishes) for Milwaukee Foundry .
2 2
2

18g

A2
0 0

C2

4
4

4
10/4

F3
7/13

0 0

E4
3

13

H2

13

13

15 15

15
15

B3

D4

8/7

8 8

G5
critical path

19

3. CPM Example
A. Starts, Finishes, Slacks
T(otal) S(lack) -- the amount of time an activitys completion can be delayed without delaying the projects completion where,

TSi = LFi - ESi - ti

and where i = the ith activity.

F(ree) S(lack) -- the amount of time an activitys completion can be delayed without delaying the commencement of the next activity where,

FSi = ESj - ESi - ti

and where i = the ith activity and j = the jth activity.

3. CPM Example
A. Starts, Finishes., Slacks
T(otal) S(lacks) and F(ree) S(lacks) for Milwaukee Foundry . F 3 4 13 ES

20

4 0 A 2 2 2 C 2 D

TSE=8-4-4=0 FSE=8-4-4=0

TSH=0=15-13-2 FSH=0=15-13-2

3 0 B 3 4

13 H

2
8

15

TSB=1=4-3-0 FSB=0=3-3-0

TSD=1=8-4-3 FSD=1=8-4-3

LF 8 G 5 13

critical path

3. CPM Example
A. Starts, Finishes., Slacks
Shared Slack -- the slack in a project along a non-critical segment of a path which all activities on that non-critical segment share. Consider the lower path for Milwaukee Foundry. B 3 4 G 5 13

21

3 D 4 8

TSB = 1 TSD = 1 TSG = 0 FSB = 0 FSD = 1 FSG = 0 The slack of one time period along this non-critical path segment is shared between activities B and D, i.e., 7 time periods of activities are scheduled over an 8 time period segment. *Other variations 8 time periods (TPs)* are possible if the one TP of slock is divided up. B -- 4 TPs A -- 3 TPs B -- 4TPs A -- 3TPs B -- 4TPs A -- 3TPs

3. CPM Example
A. Starts, Finishes., Slacks

22

Nested Slacks -- when one segment of a non-critical path is imbedded in another segment of a non-critical path, the free slack of the terminal activity in the imbedded non-critical segment will not necessarily be 0.
0 C 8 13 TS=5, FS=0 0 A 10 10 TS,FS=0 8 D 7 20 TS=5, FS=0 15 E 5 25 TS,FS = 5 10 B 15 25

Activity A B C D E

I.P. __ A __ C D

TS,FS=0

NOTE: Path C-D-E is the non-critical path and is nested in A-B (the critical path). Hence, the ES for activity A is 0 and the LF for activity E is 25, the ES and LF for activities A and B , respectively.

23

3. CPM Example
A. Starts, Finishes., Slacks
Nested Slacks -- when one segment of a non-critical path is imbedded in another segment of a non-critical path, the free slack of the terminal activity in the imbedded non-critical segment will not necessarily be 0.
0 C 8 13 8 D 7 20 15 E 5 25 TS,FS = 3 10 B 15 25

TS=5, FS=0 TS=5, FS=2 0 F 17 20 TS=3, FS=0

Activity A B C D E F

I.P. __ A __ C D,F __

TS,FS=0
NOTE: Path A-B is the one critical path in this poject while paths F-E and C-D-E are non-critcal with C-D-E nested in F-E and shorter in path length by two time periods. As a consequence, in figuring the total and free slacks on C-D-E, ref;ect the two additional time periods of slack shared by them beginning with activity D where TSD = FSD or FSD = 0.

0 A
10 10 TS,FS=0

3. CPM Example
A2. Starts, Finishes., Slacks
T(otal) S(lacks) and F(ree) S(lacks) for Milwaukee Foundry .
early start
4

23b

TSC = 4 - 2 - 2 = 0 FSC = 4 - 2 - 2 = 0

A2
0

2
2

C2

4
10/8

F3
7/13

0
0
TSB = 4 - 0 - 3 = 1 FSB = 3 - 0 - 3 = 0

E4 D4
TSD = 8 - 3 - 4 = 1 FSD = 8 - 3 - 4 = 1 7/8

13

H2

15

13

13

15

15

B3
late finish

3
4

8
8

G5

3. CPM Example
Shared Slack -- the slack in a project along a non-critical segment of a path which all activities on that non-critical segment share. Consider the lower path for Milwaukee Foundry. 2 4 1 B3 TSB = 1 FSB = 0 5 4 D4 TSD = 1 8 FSD = 1 C8 TSC = 0 FSC = 0 5 8

23c

A2. Starts, Finishes., Slacks

The slack of one time period along this non-critical path segment is shared between activities B and D, i.e., 7 time periods of activities are scheduled over an 8 time period segment. *Other variations 8 time periods (TPs)* are possible if the one TP of slock is divided up. D -- 4 TPs B -- 3 TPs D -- 4TPs B -- 3TPs D -- 4TPs B -- 3TPs

3. CPM Example
A2. Starts, Finishes., Slacks

23d

Nested Slacks -- when one segment of a non-critical path is imbedded in another segment of a non-critical path, the free slack of the terminal activity in the imbedded non-critical segment will not necessarily be 0.
TS=5, FS=0 2 8 D7 TS=5, FS=0 C8 0 1 0 A10 TS,FS=0 10 3 10 B15 TS,FS=0 13 20 4 15 TS,FS = 5 E5 5 25 25

Activity A B C D E

I.P. __ A __ C D

NOTE: Path C-D-E is the non-critical path and is nested in A-B (the critical path). Hence, the ES for activity A is 0 and the LF for activity E is 25, the ES and LF for activities A and B , respectively.

23e

3. CPM Example
Nested Slacks -- when one segment of a non-critical path is imbedded in another segment of a non-critical path, the free slack of the terminal activity in the imbedded non-critical segment will not necessarily be 0.
TS=5, FS=2 2 8 D7
TS=5, FS=0 C8 0 1 0 A10 TS,FS=0 3 10 10 20 B15 TS,FS=0 13 F17 TS=3, FS=0 20 4 17 TS,FS = 3 E5 5 25

A2. Starts, Finishes., Slacks

25

Activity A B C D E F

I.P. __ A __ C D,F __

NOTE: Path A-B is the one critical path in this project while paths F-E and C-D-E are non-critical with C-D-E nested in F-E and shorter in path length by two time periods. As a consequence, in figuring the total and free slacks on C-D-E, they reflect the two additional tim periods of slack shared by them beginning with activity D.

3. CPM Example
B. Resource Allocation Scheduling (ES)

24

Activity TP1 TP2 TP3 TP4 TP5 TP6 TP7 TP8 TP9 TP10 TP11 TP12 TP13 TP14 TP15 *A (2) 11K 11K B (3) *C (2) D (4) *E (4) F (3) *G (5) *H (2) 21 21 Activity Cost A -- 22K ($22,000) B -- 30K C -- 26K 21 42 23 65 25 36 36 36 14 16 16 16 260 10K 10K 10K

13K 13K 12K 12K 12K 12k

14K 14K 14K 14K 10K 10K 10K 16K 16K 16K 16K 16K 8K 8K 8 308

16

16

90 126 162 198 212 228 244

276 292 300

D -- 48K E -- 56K F -- 30K

G -- 80K H -- 16K * -- critical path

3. CPM Example
B. Resource Allocation Scheduling (LS)

25

Activity TP1 TP2 TP3 TP4 TP5 TP6 TP7 TP8 TP9 TP10 TP11 TP12 TP13 TP14 TP15 *A (2) 11K 11K B (3) *C (2) D (4) *E (4) F (3) *G (5) *H (2) 11 11 Activity Cost A -- 22K ($22,000) B -- 30K C -- 26K 21 32 23 55 23 26 26 26 26 16 16 26 240 10K 10K 10K

13K 13K
12K 12K 12k 12K 14K 14K 14K 14K 10K 10K 10K 16K 16K 16K 16K 16K 8K 8K 8 308

26

26

78 104 130 156 182 198 214

266 292 300

D -- 48K E -- 56K F -- 30K

G -- 80K H -- 16K * -- critical path

3. CPM Example
B. Resource Allocation Scheduling

26

Early/Late Start Resource Allocation Schedules

350 C u 300 m. P 250 r o 200 j. 150 C 100 o s 50 t s 0 TP1 TP3 TP5 TP7 TP9 TP11 TP13 TP15

Early Start Late Start

Project Time Periods

4. CPM Example
CPM with Crashing --a

27

It is sometime necessary to accelerate the completion time of a project. This usually leads to greater cost in completing the project than what might have otherwise been the case because of opportunity costs incurred as the result of diverting resources away from other pursuits. As a result of this increase in cost, it is incumbent upon project managers to reduce the completion time of the project in the most cost effective way possible. The following guidelines are designed to achieve that end.
1) Reduce duration times of critical activities only. 2) Do not reduce the duration time of critical activity such that its path length (in time) falls below the lengths (in time) of other paths in the network. 3) Reduce critical activity duration times on the basis of the least costly first and in case of a tie, the least costly activity closest to the completion node(s) of the project. 4) When two or more critical paths exist, reduce the length (in time) of all critical paths simultaneously. 5) Given two or more critical paths and a cost tie between a joint activity and a subset of disjoint activities on the same critical path, generally reduce the duration time of the one joint to the most paths. 6) Note, if reducing a joint activity means that more critical paths emerge that what would otherwise be the case, reduce disjoint activities.

4. CPM Example
CPM with Crashing --b Consider the crashing of the Milwaukee Foundry Project
Act. N.T. C.T. N.C. C.C. U.C.C. *A 2 1 22K 23K 1K B 3 1 30K 34K 2K *C 2 1 26K 27K 1K D 4 3 48K 49K 1K *E 4 1 56K 59K 1K F 3 2 30K 30.5K 0.5K *G 5 2 80K 86K 2K *H 2 1 16K 19K 3K * - Critical Path An inspection of Milwaukee Foundrys project network identifies the following three paths and of duration, A-C-F-H : 9 *A - C - E - G -H : 15 B - D - G - H : 14

28

4. CPM Example
CPM with Crashing --c
ACT N.T. C.T. N.C. C.C. *A 2 1 22K 23K B 3 2 1 1 30K 34K *C 2 1 1 26K 27K D 4 3 3 48K 49K *E 4 3 2 1 1 56K 59K F 3 2 30K 30.5K *G 5 2 2 80K 86K *H 2 1 1 16K 19K 308 K - - SECOND CRITICAL PATH
A-C-F-H : *A - C - E - G -H : B-D-G-H : A-C-F-H *A - C - E - G -H B - D - G - H : : : 1 9 8 15 14 14 14 1 9 9 15 14 14 14

29

U.C.C. 1K 2K 5 1K 6 1K 3 1K 1 0.5K 2K 2 3K 4

3K 3K 2K 1K 6K 3K 18K

1 Act. E has the lowest U.C.C.

and closest to the final node of the network-- crash one time period and two CPs emerge. D or G. Reduce G, three time periods. It is A joint activity.

2 One can now reduce Acts. E &

3 Now E & D can be reduced

one time period for the same U.C.C. as G.

4 Now reduce H by one time

unit.
5 Now reduce C & B by one

time unit.
2 3 9 9 11 10 11 10 4 8 9 9 5 7 8 8 6 7 7 7 6 Finally, reduce E & B by one

time unit.

4. CPM Example
CPM with Crashing --d ( Summary)

30

Why would reduce Activity E in crashing step one ( 1 ) and by only one time unit? Why do you reduce Activity G and not Activities E & D in 2 and by three time units? Why do you now reduce Activities E & D in 3 and by only one time unit? Why do you reduce Activity H in 4 ? Why do you now reduce E & B in 5 but by only one time unit? Why do you now reduce C & B in 6 and how do you know now that you have crashed the project down to the minimum possible completion time? Why were Activities A & F never reduced? Why should we concern ourselves with crashing a project by always reducing the least costly activities first?

31

5. PERT Simulation
--agenda--

Motivation

Illustrative Examples

Performing Simulations with WinQSB

5. PERT Simulation
Motivation non-stochasticity/stochasticity & non-critical paths

32

independence of/interdependence between paths

strength of an assumption

5. PERT Simulationmotivation
--non-stochasticity/stochasticity & non-critical paths-Reconsider General Foundry of Milwaukee
The E(ti) for each activity in this reduced version of General Foundys PERT table has been entered into the projects network diagram. ACT I.P. (a) (m) (b) E(ti) var(ti) F A __ 1 2 3 2 4/36 3 B __ 2 3 4 3 4/36 C A C A 1 2 3 2 4/36 D B 2 4 6 4 16/36 2 2 E E C 1 4 7 4 36/36 F C 1 2 9 3 64/36 4 B D G D,E 3 4 11 5 64/36 H F,G 1 2 3 2 4/36 3 4 Inspection of the network discloses three paths thru the project: A-C-F-H; A-C-E-G-H; and B-D-G-H. Summing the E(ti) on each path yields the time thru each path to be 9, 15, and 14 weeks, respectively. With an E(t) = 15 for A-C-E-G-H, this path is defined as the critical path (CP) having a path variance of 3.11 (112.36). The other paths however, also have variances of 2.11 for A-C-F-H and 2.44 for B-D-G-H. We assume all three paths to be normally distributed.

33

H 2

G 5

Implications of assuming non-stochasticity on the (two) non-critical paths-how serious? How strong is the assumption of non-stochasticity in this case?

5. PERT Simulation--motivation
--independence of/interdependence between paths-Reconsider General Foundry of Milwaukee

34

A 2 B 3

C 2 D 4

E 4 F 3

H 2 G 5

A 2 B 3

C 2

F 3
E 4 G 5 H 2

D 4

Digraph with independent paths

Digraph with interdependent paths

Which paths are interdependent and why? Why might this path interdependence complicate estimating the expected completion time of this project? How strong might the assumption of path independence be in this case?

35

5. PERT Simulationillustrative examples

Reconsider General Foundry of Milwaukee
CASE 1
ACT A B C D E F G H I.P. __ __ A B C C D,E F,G (a) (m) (b) E(ti) var(ti) 1 2 3 2 4/36 2 3 4 3 4/36 1 2 3 2 4/36 2 4 6 4 16/36 1 4 7 4 36/36 1 2 9 3 64/36 3 4 11 5 64/36 1 2 3 2 4/36 ACT A B C D E F G H I.P. __ __ A B C C D,E F,G

CASE 2
(a) (m) (b) E(ti) var(ti) 1 2 3 2 4/36 .1 3 5.9 3 33.64/36 1 2 3 2 4/36 .1 4 7.9 4 60.84/36 1 4 7 4 36/36 1 2 9 3 64/36 3 4 11 5 64/36 1 2 3 2 4/36

The PERT table above merely replicates the results of a previous pagepaths A-C-F-H; A-C-E-G-H; and B-D-G-H have E(t)s of 9, 15, and 14 weeks with variances of 2.11, 3.11, and 2.44, respectively.

The PERT table above in contrast to the one at its left while replicating the same path expected duration times path as before B-D-G-H now has a variance of 4.513. Relaxing the two assumptions that 1) non-critical paths are non-stochastic and 2) paths are independent of each other, how might estimation results of completion times with respect to Case 1 and Case 2 differ one from the other?

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5. PERT Simulationrunning WinQSB

Why simulation? Consider Case 2

Running WinQSB
Open PERT/CPM > Select PERT > enter problem > Solve & Analyze > perform simulation The simulation input menu will drop defaulting to random seed with the estimated completion time of the critical path based on the standard method presented in 2b. Enter 10,000 for the # of simulated observations to be made. Enter the desired completion time Click on the simulation button. View the results

5. PERT Simulationrunning WinQSB

Results: Foundry Project
independent paths/non-stochastic non-critical paths assumptions in play
E(t) = 15; CP A C E G - H; prob(X < 17) = 87.16% A-C-F-H: 9, 2 = 2.11; A-C-E-G-H: 15, 2 = 3.11; and B-D-G-H: 14, 2 = 2.44

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independent paths/non-stochastic non-critical paths assumptions NOT in play Simulation

A-C-F-H:

E(t) = 15.19; prob(X < 17) = 86.10% 9, 2 = 2.11; A-C-E-G-H: 15, 2 = 3.11; and B-D-G-H: 14, 2 = 2.44

(strength of the above assumptions if in play with Case 1 ????)

independent paths/non-stochastic non-critical paths assumptions NOT in play

E(t) = 15.39; prob(X < 17) = 82.51%
A-C-F-H: 9, 2 = 2.11; A-C-E-G-H: 15, 2 = 3.11; and B-D-G-H: 14, 2

= 4.513

(strength of the above assumptions if in play with Case 2 ????)

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5. PERT Simulationrunning WinQSB

Generalizations???