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CPM & PERT

PROJECT:


A project is a series of activities
directed to the accomplishment of a
desired objective.

HISTORY
CPM was developed by Du Pont and the emphasis was on the
trade-off 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 - how does this affect the overall completion
time of the project?)

PERT was developed by the US Navy for the planning and
control of the Polaris missile program and the emphasis was
on completing the program in the shortest possible time. In
addition PERT had the ability to cope with uncertain activity
completion times (e.g. for a particular activity the most
likely completion time is 4 weeks but it could be anywhere
between 3 weeks and 8 weeks)
PERT/CPM Type Projects:
Construction
Engineering
Software Development
Equipment Cut-over
Anything with many interdependent
activities/steps
CPM - Critical Path Method
DEFINITION:
In CPM activities are shown as a network of precedence
relationships using activity-on-node network construction.
Single estimate of activity time
Deterministic activity times

USED IN:

Production management - for the jobs of repetitive in nature
where the activity time estimates can be predicted with
considerable certainty due to the existence of past
experience.

PERT
(Project Evaluation & Review Techniques)
DEFINITION:
In PERT activities are shown as a network of
precedence relationships using activity-on-arrow network
construction
Multiple time estimates
Probabilistic activity times


USED IN :
Project management - for non-repetitive jobs (research and
development work), where the time and cost estimates
tend to be quite uncertain. This technique uses
probabilistic time estimates.

Network Diagram
Activities

Events
ACTIVITIES
Activities are shown as lines or arrows


Activities require time and other
recourses
SITUATIONS IN NETWORK DIAGRAM:
A
B
C
A must finish before either B or C
can start
A
B
C
both A and B must finish before C
can start
D
C
B
A
both A and C must finish before
either of B or D can start
A
C
B
D
Dummy
A must finish before B can start
both A and C must finish before D can
start
10
EVENTS:
Events or nodes or mileposts or circles
They consume NO time and show
connections between activities
Every PERT/CPM chart has one Start
event and one end event
11
The Six Steps Common to PERT & CPM
1. Define the project and identify each activity
2. Develop relationships among the activities.
(Decide which activities must precede and
which must follow others.)
3. Draw the network connecting all of the
activities
4. Assign time and/or cost estimates to each
activity
5. Compute the longest time path through the
network. This is called the critical path
6. Use the network to help plan, schedule,
monitor, and control the project
Activity Slack:
Each event has two important times associated with it :

- Earliest time , Te , which is a calendar time when an event
can occur when all the predecessor events completed at the
earliest possible times
- Latest time , TL , which is the latest time the event can occur
with out delaying the subsequent events and completion of
project.

Difference between the latest time and the earliest time of an
event is the slack time for that event

Positive slack : Slack is the amount of time an event can be
delayed without delaying the project completion

CRITICAL PATH

Is that the sequence of activities and events where there is no
slack i.e.. Zero slack

Longest path through a network

minimum project completion time
QUESTIONS ANSWERED BY CPM &
PERT
Completion date?

On Schedule?

Within Budget?

Critical Activities?

How can the project be finished early at the least cost?
Example
1. Construct the CPM Network using the details below and
determine the critical path
Activity Immediate
Predecessor
Duration
A - 1
B A 4
C A 2
D A 2
E D 3
F D 3
G E 2
H F,G 1
I C,H 3
J B 2
1 2
CPM NETWORK
A
1 7
4
2
3
CPM NETWORK
A
B
D
C
1 7
6
5
4
2
3
CPM NETWORK
A
B
D
F
E
C
1 7
6
5
4
2
3
CPM NETWORK
A
B
D
F
G
E
C
1 7
6
5
4
2
3
CPM NETWORK
A
B
D
F
G
E
C
H
1 7
6
5
4
2
8
3
CPM NETWORK
A
B
D
F
G
E
C
I
H
1 7
6
5
4
2
8
3
CPM NETWORK
A
J
B
D
F
G
E
C
I
H
1 7
6
5
4
2
8
3
CPM NETWORK with duration of each activity
A(1)
J(2)
B(4)
D(2)
F(3)
G(2)
E(3)
C(2)
I(3)
H(1)
1 7
6
5
4
2
8
3
To find the Critical Path
A(1)
J(2)
B(4)
D(2)
F(3)
G(2)
E(3)
C(2)
I(3)
H(1) 0
0
LFT
EST
1 7
6
5
4
2
8
3
To find the Critical Path
A(1)
J(2)
B(4)
D(2)
F(3)
G(2)
E(3)
C(2)
I(3)
H(1) 0
0
LFT
EST
0
1
1 7
6
5
4
2
8
3
To find the Critical Path
A(1)
J(2)
B(4)
D(2)
F(3)
G(2)
E(3)
C(2)
I(3)
H(1) 0
0
LFT
EST
0
1
0
3
1 7
6
5
4
2
8
3
To find the Critical Path
A(1)
J(2)
B(4)
D(2)
F(3)
G(2)
E(3)
C(2)
I(3)
H(1) 0
0
LFT
EST
0
1
0
3
0
6
1 7
6
5
4
2
8
3
To find the Critical Path
A(1)
J(2)
B(4)
D(2)
F(3)
G(2)
E(3)
C(2)
I(3)
H(1) 0
0
LFT
EST
0
1
0
3
0
6
0
8
0
9
0
5
0
12
1 7
6
5
4
2
8
3
To find the Critical Path
A(1)
J(2)
B(4)
D(2)
F(3)
G(2)
E(3)
C(2)
I(3)
H(1) 0
0
LFT
EST
0
1
0
3
0
6
0
8
0
9
0
5
12
12
1 7
6
5
4
2
8
3
To find the Critical Path
A(1)
J(2)
B(4)
D(2)
F(3)
G(2)
E(3)
C(2)
I(3)
H(1) 0
0
LFT
EST
0
1
0
3
0
6
0
8
9
9
0
5
12
12
1 7
6
5
4
2
8
3
To find the Critical Path
A(1)
J(2)
B(4)
D(2)
F(3)
G(2)
E(3)
C(2)
I(3)
H(1) 0
0
LFT
EST
0
1
0
3
0
6
8
8
9
9
0
5
12
12
1 7
6
5
4
2
8
3
To find the Critical Path
A(1)
J(2)
B(4)
D(2)
F(3)
G(2)
E(3)
C(2)
I(3)
H(1) 0
0
LFT
EST
0
1
0
3
6
6
8
8
9
9
0
5
12
12
1 7
6
5
4
2
8
3
To find the Critical Path
A(1)
J(2)
B(4)
D(2)
F(3)
G(2)
E(3)
C(2)
I(3)
H(1) 0
0
LFT
EST
0
1
3
3
6
6
8
8
9
9
0
5
12
12
1 7
6
5
4
2
8
3
To find the Critical Path
A(1)
J(2)
B(4)
D(2)
F(3)
G(2)
E(3)
C(2)
I(3)
H(1) 0
0
LFT
EST
1
1
3
3
6
6
8
8
9
9
0
5
12
12
1 7
6
5
4
2
8
3
A(1)
J(2)
B(4)
D(2)
F(3)
G(2)
E(3)
C(2)
I(3)
H(1) 0
0
9
9
12
12
6
6
10
5
1
1
3
3
8
8
Critical Path
Critical Path
A B E G H - I
Critical Path
1 - 2 - 4 5 6 7 - 8
CPM - Example
Critical Path
1 - 2 - 4 5 6 7
8
Critical Path
A B E G H - I
Project Completion Time = 12 months
PERT
Probabilistic
Three estimates
t
o
(a) optimistic time
t
p
(b) pessimistic time
t
l
(m) most likely time

Mean = (t
o
+ 4* t
l
+ t
p
)/6

Variance
2
= [(t
p
t
o
)/6]
2

TIME ESTIMATION:
Optimistic Time -- the minimum time period in
which the activity can be accomplished, i.e., the
time it would take to complete it if everything
proceeded better than expected

Most Likely Time -- the best estimate of the time
period in which the activity can be accomplished,
i.e., the estimate submitted if one (only) had been
requested

Pessimistic Time -- the maximum time period it
would take to accomplish the activity, i.e., the time
required if everything went wrong, excluding major
catastrophes.
Activity Predecesso
r
a m b
A - 6 7 8
B - 1 2 9
C - 1 4 7
D A 1 2 3
E A,B 1 2 9
F C 1 5 9
G C 2 2 8
H E,F 4 4 4
I E,F 4 4 10
J D,H 2 5 14
K G,I 2 2 8
PERT Example: Construct Project network, find the expected
duration and variance for each activity & find the critical path and
expected project completion time
Activity Predece
ssor
a m b
t
e

A - 6 7 8 7
B - 1 2 9
C - 1 4 7
D A 1 2 3
E A,B 1 2 9
F C 1 5 9
G C 2 2 8
H E,F 4 4 4
I E,F 4 4 10
J D,H 2 5 14
K G,I 2 2 8
PERT Example:
Mean = (t
o
+ 4* t
l
+ t
p
)/6 Variance
2
= [(t
p
t
o
)/6]
2

Activity Predece
ssor
a m b
t
e

A - 6 7 8 7
B - 1 2 9 3
C - 1 4 7
D A 1 2 3
E A,B 1 2 9
F C 1 5 9
G C 2 2 8
H E,F 4 4 4
I E,F 4 4 10
J D,H 2 5 14
K G,I 2 2 8
PERT Example:
Mean = (t
o
+ 4* t
l
+ t
p
)/6 Variance
2
= [(t
p
t
o
)/6]
2

Activity Predecesso
r
a m b
t
e

2

A - 6 7 8 7
B - 1 2 9 3
C - 1 4 7 4
D A 1 2 3 2
E A,B 1 2 9 3
F C 1 5 9 5
G C 2 2 8 3
H E,F 4 4 4 4
I E,F 4 4 10 5
J D,H 2 5 14 6
K G,I 2 2 8 3
PERT Example:
Mean = (t
o
+ 4* t
l
+ t
p
)/6 Variance
2
= [(t
p
t
o
)/6]
2

Activity Predecesso
r
a m b
t
e

2

A - 6 7 8 7 0.11
B - 1 2 9 3
C - 1 4 7 4
D A 1 2 3 2
E A,B 1 2 9 3
F C 1 5 9 5
G C 2 2 8 3
H E,F 4 4 4 4
I E,F 4 4 10 5
J D,H 2 5 14 6
K G,I 2 2 8 3
PERT Example:
Mean = (t
o
+ 4* t
l
+ t
p
)/6 Variance
2
= [(t
p
t
o
)/6]
2

Activity Predecesso
r
a m b
t
e

2

A - 6 7 8 7 0.11
B - 1 2 9 3 1.78
C - 1 4 7 4
D A 1 2 3 2
E A,B 1 2 9 3
F C 1 5 9 5
G C 2 2 8 3
H E,F 4 4 4 4
I E,F 4 4 10 5
J D,H 2 5 14 6
K G,I 2 2 8 3
PERT Example:
Mean = (t
o
+ 4* t
l
+ t
p
)/6 Variance
2
= [(t
p
t
o
)/6]
2

Activity Predecesso
r
a m b
t
e

2

A - 6 7 8 7 0.11
B - 1 2 9 3 1.78
C - 1 4 7 4 1.00
D A 1 2 3 2 0.11
E A,B 1 2 9 3 1.78
F C 1 5 9 5 1.78
G C 2 2 8 3 1.00
H E,F 4 4 4 4 0
I E,F 4 4 10 5 1.00
J D,H 2 5 14 6 4.00
K G,I 2 2 8 3 1.00
PERT Example:
Mean = (t
o
+ 4* t
l
+ t
p
)/6 Variance
2
= [(t
p
t
o
)/6]
2

1
4
2
3
A(7)
J(6)
B(3)
D(2)
F(5)
G(3)
E(3)
C(4)
I(5)
H(4)
6
6
LFT
EST
K(3)
1
4
2
6
3
A(7)
J(6)
B(3)
D(2)
F(5)
G(3)
E(3)
C(4)
I(5)
H(4)
6
6
To find the Critical Path
LFT
EST
K(3)
1
6
5
4
2
3
A(7)
J(6)
B(3)
D(2)
F(5)
G(3)
E(3)
C(4)
I(5)
H(4)
6
6
To find the Critical Path
LFT
EST
K(3)
1
6
5
4
2
3
A(7)
J(6)
B(3)
D(2)
F(5)
G(3)
E(3)
C(4)
I(5)
H(4)
6
6
To find the Critical Path
LFT
EST
K(3)
1
7
6
5
4
2
3
A(7)
J(6)
B(3)
D(2)
F(5)
G(3)
E(3)
C(4)
I(5)
H(4)
6
6
To find the Critical Path
LFT
EST
K(3)
1
7
6
5
4
2
3
A(7)
J(6)
B(3)
D(2)
F(5)
G(3)
E(3)
C(4)
I(5)
H(4)
6
6
To find the Critical Path
LFT
EST
K(3)
1
7
6
5
4
2
3
A(7)
J(6)
B(3)
D(2)
F(5)
G(3)
E(3)
C(4)
I(5)
H(4)
6
6
To find the Critical Path
LFT
EST
K(3)
1
7
6
5
4
2
8
3
A(7)
J(6)
B(3)
D(2)
F(5)
G(3)
E(3)
C(4)
I(5)
H(4)
6
6
To find the Critical Path
LFT
EST
K(3)
1
7
6
5
4
2
8
3
A(7)
J(6)
B(3)
D(2)
F(5)
G(3)
E(3)
C(4)
I(5)
H(4)
6
6
To find the Critical Path
LFT
EST
K(3)
1
7
6
5
4
2
8
3
A(7)
J(6)
B(3)
D(2)
F(5)
G(3)
E(3)
C(4)
I(5)
H(4)
0
0
To find the Critical Path
LFT
EST
K(3)
14
14
4
5
7
7
7
7
10
10
15
17
20
20
1
7
6
5
4
2
8
3
A(7)
J(6)
B(3)
D(2)
F(5)
G(3)
E(3)
C(4)
I(5)
H(4)
0
0
K(3)
14
14
4
5
7
7
7
7
10
10
15
17
20
20
Critical path 1 2 3 5 6 8

Critical path A Dummy E H J
PERT - Example
What is the probability of completing the project within 25
weeks?









2
= 5.89 = (
2
) = 2.43
Ts (Scheduled time) = 25 weeks
Z = (T
s
T
e
) / = (25 20) / 2.43 = 2.06
From z table (normal table) z(2.06) = 97.68 %

Activities Variance
A 0.11
Dummy 0
E 1.78
H 0
J 4
PERT - Example
What is the probability of completing the project within 15
weeks?









2
= 5.89 = (
2
) = 2.43
Ts (Scheduled time) = 15 weeks
Z = (T
s
T
e
) / = (15 20) / 2.43 = -2.06
From z table (normal table) z(-2.06) = 100 - 97.68 %
= 2.02 %
Activities Variance
A 0.11
Dummy 0
E 1.78
H 0
J 4
Advantages of PERT/CPM
Especially useful when scheduling and controlling
large projects.
Straightforward concept and not mathematically
complex.
Graphical networks aid perception of relationships
among project activities.
Critical path & slack time analyses help pinpoint
activities that need to be closely watched.
Project documentation and graphics point out who is
responsible for various activities.
Applicable to a wide variety of projects.
Useful in monitoring schedules and costs.
Limitations of CPM/PERT
Clearly defined, independent and stable activities
Specified precedence relationships
Over emphasis on critical paths