PROJECT MANAGEMENT

PERT and CPM

Project

A project is a series of activities directed to

accomplishment of a desired objective.
Plan your work first..then work your plan
Characteristic of a project
A project is a temporary endeavour involving a connected
sequence of activities and a range of resources, which is
designed to achieve a specific and unique outcome and
which operates within time, cost and quality constraints
and which is often used to introduce change
! A unique, one"time operational activity or effort
# Requires the completion of a large num$er of interrelated
activities
% Esta$lished to achieve specific o$jective
& Resources, such as time and'or money, are limited
( Typically has its own management structure
) *eed leadership
Project
+hat is project management

The application of a collection of tools and techniques to

direct the use of diverse resources towards the
accomplishment of a unique, comple,, one time tas-
within time, cost and quality constraints

.ts origins lie in +orld +ar .., when the military authorities
used the techniques of operational research to plan the
optimum use of resources

/ne of these techniques was the use of networ-s to

represent a system of related activities
Network analysis
Network analysis is the general name given to certain specific
techniques which can be used for the planning, management and
control of projects.

A project is a temporary endeavour undertaken to create a
"unique" product or service
History
!"#$ was developed by the %& Navy for the planning
and control of the !olaris missile program and the
emphasis was on completing the program in the shortest
possible time. 'n addition !"#$ had the ability to cope
with uncertain activity completion times (e.g. for a
particular activity the most likely completion time is )
weeks but it could be anywhere between * weeks and +
weeks,.
-!. was developed by /u !ont and the emphasis was on
the trade0off between the cost of the project and its overall
completion time (e.g. for certain activities it may be
possible to decrease their completion times by spending
more money 0 how does this affect the overall completion
time of the project1,
CPM - Critical Path Method
Definition:

'n CPM activities are shown as a network of precedence

relationships using activity0on0node network construction

&ingle estimate of activity time

/eterministic activity times

USED IN :
!roduction management 0 for the jobs of repetitive in nature
where the activity time estimates can be predicted with
considerable certainty due to the e2istence of past e2perience
PERT -
Project Evaluation & Revie Tec!ni"ue#
Definition0
.n PERT activities are shown as a networ- of precedence
relationships using activity"on"arrow networ- construction
Multiple time estimates
Pro$a$ilistic activity times
USED IN : Project maa!emet - for non"repetitive jo$s 1research
and development wor-2, where the time and cost estimates tend to $e
quite uncertain This technique uses pro$a$ilistic time estimates
P!a#e# O$ Project Mana%e&ent
! Project planning phase
# 3cheduling phase
% Project control phase
Di$$erence 'eteen PERT an( CPM
!4
PERT CPM
3. $hree estimates are used
4. $ool for planning and
control
*. "mphasis is on completion
of the task
). 5elps in identifying critical
areas in the project
6. 't is used for the activities
of non repetitive nature
3. 7nly one estimate is used
4. 't is a tool for maintenance
*. &uitable for balancing a
tradeoff between time and
cost
). %sed for analy8ing total
project duration
6. 't is used for the activities
of repetitive nature
)ene$it# o$ CPM*PERT

%seful at many stages of project management

.athematically simple

9ive critical path and slack time

!rovide project documentation

%seful in monitoring costs

The Project Net"or#
Use of odes ad arro"s
Arrows An arrow leads from tail to head directionally

.ndicate ACT.5.T6, a time consuming effort that is required

to perform a part of the wor-
*odes A node is represented $y a circle
" .ndicate E5E*T, a point in time where one or more activities
start and'or finish
$cti%ity o Node & $cti%ity o $rro"
Activity on *ode
" A completion of an activity is
represented $y a node
Activity on Arrow
" An arrow represents a tas-,
while a node is the completion
of a tas-
" Arrows represent order of
events
Rule# o$ Netor+ Con#truction
3. "ach activity is represented by one arrow
4. An activity can begin only when all its predecessors are done
*. :ength and bearing of arrows is of no consequence
). Arrow direction indicates general progression in time ; tail events represent start while
head events represent end of activities
6. "vents are identified by numbers while activities are represented by their starting and
ending events
<. A network should have only one initial and one final node
=. 'ntroduce as few dummy activities as may be necessary
+. :ooping is not permitted
Error# An( Du&&ie# In T!e Netor+

7ooping and 8angling

8ummy Activity
,ue#tion -

/raw an arrow diagram showing the following

relationship
!)
$cti%ity Immediate Predecessor
A
>
-
/
"
?
9
5
'
@
A
:
.
N
0
0
0
A ,>
> , -
A , >
-
/ , " , ?
/
9
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A
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,ue#tion .

A new type of water pump is to be designed for an automobile.

'ts major specifications are given in the table below. /raw the
network diagram for the activities involved in the project
!9
Activity 8escription Predecessor
activity
A
:
C
8
E
;
<
=
.
>
?
8rawing prepared and approved
Cost analysis
Tool feasi$ility 1economics4
Tool manufactured
;avoura$le cost
Raw material procured
3u$assem$lies ordered
3u$assem$lies received
Part manufactured
;inal assem$ly
Testing and shipment
"
A
A
C
:, C
8 , E
E
<
8, ;
., =
j
Critical Pat! Anal/#i#
Critical Pat! Anal/#i#
! Earliest and latest Time
1a2;orward Pass calculation
E 3 and E; Time
1$2:ac-ward Pass Calculation
73 and 7; Time
$cti%ity Slac# ' (loats)
8ifference $etween the latest time and the earliest time of an
event is the slac- time for that event
Positive slac- 0 3lac- is the amount of time an event can $e
delayed without delaying the project completion
$cti%ity Slac# ' (loats)
Total $loat is the amount of time by which an activity may be
delayed without delaying the project completion
0ree $loat is that part of total float which can be used without
affecting floats of the succeeding activities
Inter$erin% $loat the part of total float which is not free
In(e1en(ent $loat is the amount of time which can be used
without affecting the head and the tail events
Total 0loat 2 0ree 0loat 2 In(e1en(ent 0loat
Critical Path

's that the sequence of activities and events where there is no

slack i.e33 4ero #lac+

:ongest path through a network

minimum project completion time

Deter&inin% T!e Critical Pat!

8raw a networ- corresponding to the

following information /$tain the early and
the late start and completion time Also
determine the critical path
$cti%ity D*ratio
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CA5CU5ATION O0 05OATS
0loat#

Total float
B 7atest start time C Earliest start time

(ree float
B Total float C =ead event slac-

Iterferi! float
B Total float C ;ree float

Idepedet float
B ;ree float C Tail event slac-, or Dero, whichever
is higher
+*estio
8raw a networ- corresponding to the
following information Calculate the floats
associated with the activities in the networ-
$cti%ity D*ratio
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Re#ource Anal/#i# an( Allocation
!roblems related to resources include
Ti&e-co#t tra(e-o$$, called crashing
-ompletion time of the project is systematically reduced
considering cost
Re#ource 5evellin%
An attempt is made to smoothen the resources requirements
by systematically scheduling the activities
Re#ource Allocation
Allocation of limited availability of resources in a manner
that the project is completed in minimum time
Cra#!in%
'nvolves use of additional resources with a view to reduce the
project duration
-rashing increases direct cost of doing activities but reduces
overhead, which is usually a function of time
't may also help to reap any benefits of early completion
't needs information on cost of reduction of every activity per
unit of time
Cra#!in%
'n crashing, always consider the critical path and choose the
activity that can be crashed at least cost
'n case of multiple critical paths, all of them should be
considered for crashing simultaneously
$ime0cost schedule is prepared to get information on normal
time and the cost, the minimum time to complete project and
the cost, and optimal duration of the project.
,ue#tion
$he following table give data on normal time, cost and
crash time and cost for a project
$cti%ity Normal Crash
Time 1wee-2 Cost 1Rs2 Time 1wee-2 Cost 1Rs2
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Project Sc!e(ule 6it! Uncertain Ti&e
Eses three time estimates for every activity0
optimistic (t0 or a2
pessimistic 1tp or $2
and most li-ely 1tm or m2
E,pected time B 1aF&GmFb2')H
and
5ariance B I1b C a 2')J#
PERT $pplicatios
A modification of !"#$ which allows planning, monitoring and controlling of project
cost and duration
>udgeting process allows to determine how much money is to be spent every time unit
(weekBmonth, over planned duration of project
>udgets are prepared on the basis of earliest and latest start times of activities
-omparisons are made continuously between the actual costs and budgeted amounts

-omparisons are also made between percentage of work done and percentage of
budgeted amount spentC if former is smaller than the later, we have budget overrun
An established company has decided to add a new product to its line. 't
will buy the product from a manufacturing concern, package it, and sell
it to a number of distributers that will have been selected on a
geographical basis. .arket research has already indicated the volume
e2pected and the si8e for sales force required.
a, /raw an arrow diagram for this project
b, 'ndicate the critical path
c, ?or each non critical activity find the total and free float.
$he steps shown in the following table are to be planned.
Duestion 6
$cti%ity Descriptio
Predecess
or
D*ratio
A /rganiDe sales force " )
: =ire sales man A &
C Train sales man : 9
8 3elect advertising agency A #
E Plan advertising campaign 8 &
; Conduct advertising campaign E !4
< 8esign pac-age " #
= 3etup pac-aging facilities < !4
. Pac-age initial stoc-s >, = )
> /rder stoc- from manufacturer " !%
? 3elect distri$uter A A
7 3ell to distri$uter C,? %
M 3hip stoc- to distri$uter .,7 (