Project

Management
 PERT and CPM

PERT: Program Evaluation and

Review Technique
CPM: Critical Path Method

 Graphically displays project activities

 Estimates how long the project will take
 Indicates most critical activities
 Show where delays will not affect project
 The Network Diagram
 Network (precedence) diagram – diagram of
project activities that shows sequential
relationships by the use of arrows and nodes.
 Activity-on-arrow (AOA) – a network diagram
convention in which arrows designate activities.
 Activity-on-node (AON) – a network diagram
convention in which nodes designate activities.
 Activities – steps in the project that consume
resources and/or time.
 Events – the starting and finishing of activities,
designated by nodes in the AOA convention.
The Network Diagram (cont’d)
 Path
 Sequence of activities that leads from the starting
node to the finishing node
 Critical path
 The longest path; determines expected project
duration
 Critical activities
 Activities on the critical path
 Slack
 Allowable slippage for path; the difference the
length of path and the length of critical path
 A Comparison of AON and
AOA Network Conventions
Activity on Activity Activity on
Node (AON) Meaning Arrow (AOA)
A comes before
(a) A B C B, which comes
before C A B C
A A
A and B must both
(b) C be completed
before C can start C
B B
B
B and C cannot
(c) A begin until A is B
completed A
C C
 A Comparison of AON and
AOA Network Conventions
Activity on Activity Activity on
Node (AON) Meaning Arrow (AOA)

C and D cannot
A C begin until A A C
(d) and B have
both been
B D completed B D

C cannot begin
until both A and B
A C are completed; D A C
(e) cannot begin until Dummy activity
B is completed. A
B D dummy activity is
introduced in AOA B D
 A Comparison of AON and
AOA Network Conventions
Activity on Activity Activity on
Node (AON) Meaning Arrow (AOA)

B and C cannot
begin until A is
completed. D
A B D cannot begin A B D
until both B and
(f) C are completed. Dummy C
C A dummy activity
activity is again
introduced in
AOA.
 Project Network – Activity on
Arrow
AOA
Order 4

Locate 2 setup
facilities
Remodel
1 5 6
Move
in
Interview
Hire and
train
3
 Project Network – Activity on
Node
AON
Order
Locate 2
facilities setup

1 6
Move
Remodel
in

S 5 7

Hire and
Interview
train

3 4
 Time Estimates
 Deterministic
 Time estimates that are fairly certain

 Probabilistic
 Estimates of times that allow for variation
 Computing Algorithm
 Network activities
 ES: earliest start
 EF: earliest finish
 LS: latest start
 LF: latest finish
 Used to determine
 Expected project duration
 Slack time
 Critical path
Determining the Project Schedule

Perform a Critical Path Analysis

Earliest start (ES) = earliest time at which an activity can start,
Activity Description assuming all predecessors have Time (weeks)
been
A Build internal
completed components 2
EarliestBfinish (EF)
Modify roof and
= earliest floor
time at which an activity can3be
C finished
Construct collection stack 2
D start (LS)
Latest Pour=concrete
latest timeand installan
at which frame 4
activity can start
E so as to not delay the
Build high-temperature completion time
burner 4 of
F Install the entire project
pollution control system 3
Latest
G finish (LF) = latest
Install time by which
air pollution devicean activity has to 5 be
finished so as to not delay the completion
H Inspect and test 2
time of the entire project
Total Time (weeks) Table
25 3.2
 AON Example
Milwaukee Paper Manufacturing's
Activities and Predecessors
Immediate
Activity Description Predecessors
A Build internal components —
B Modify roof and floor —
C Construct collection stack A
D Pour concrete and install frame A, B
E Build high-temperature burner C
F Install pollution control system C
G Install air pollution device D, E
H Inspect and test F, G
 AON Network for Milwaukee
Paper

Activity A
A
(Build Internal Components)

Start

Activity B
Start B (Modify Roof and Floor)
Activity
 AON Network for Milwaukee
Paper
Activity A Precedes Activity C

A C

Start

B D

Activities A and B
Precede Activity D
 AON Network for Milwaukee
Paper

F
A C

E
Start H

B D G

Arrows Show Precedence

Relationships
AOA Network for Milwaukee
Paper
C
2 4
(Construct
Stack)

H
1 Dummy 6 7
Activity (Inspect/
Test)

D
3 5
(Pour
Concrete/
Install Frame)
Determining the Project Schedule

Perform a Critical Path Analysis

Activity Description Time (weeks)
A Build internal components 2
B Modify roof and floor 3
C Construct collection stack 2
D Pour concrete and install frame 4
E Build high-temperature burner 4
F Install pollution control system 3
G Install air pollution device 5
H Inspect and test 2
Total Time (weeks) 25
Determining the Project Schedule

Perform a Critical Path Analysis

Activity Name
or Symbol
A Earliest
Earliest ES EF Finish
Start

Latest LS LF Latest
Start 2 Finish

Activity Duration
ES/EF Network for Milwaukee
Paper (Forward pass)
ES EF = ES + Activity time
Start
0 0

0
 ES/EF Network for Milwaukee
Paper
EF of A =
ES ES of A + 2
of A
A
Start 0 2
0 0

2
 ES/EF Network for Milwaukee
Paper
A
0 2

2 EF of B =
ES ES of B + 3
0
Start
0 of B
B
0 0 3

3
 ES/EF Network for Milwaukee
Paper
A C
0 2 2 4

2 2

Start
0 0

B
0 3

3
 ES/EF Network for Milwaukee
Paper
A C
0 2 2 4

2 2

Start
0 0
= Max (2, 3) D
0
3 7
B
0 3

3
4
 ES/EF Network for Milwaukee
Paper
A C
0 2 2 4

2 2

Start
0 0

B D
0 3 3 7

3 4
 ES/EF Network for Milwaukee
Paper
A C F
0 2 2 4 4 7

2 2 3

Start E H
0 0 4 8 13 15

0 4 2

B D G
0 3 3 7 8 13

3 4 5
 LS/LF Times for Milwaukee
Paper (Backward pass)
A C F
0 2 2 4 4 7

2 2 3

Start E H
0 0 4 8 13 15
13 15
0 4 2

B D – Activity time
LS = LF G
0 3 3 7 8 13

3 4 5 LF = EF
of Project
 LS/LF Times for
Milwaukee Paper
A C F
0 2 2 4 4 7

10 13
2 2 3

Start E H
0 0
LF =4 Min(LS
8 of 13 15
following activity) 13 15
0 4 2

B D G
0 3 3 7 8 13

3 4 5
 LS/LF Times for
LF = Min(4, 10)
Milwaukee Paper
A C F
0 2 2 4 4 7

2 4 10 13
2 2 3

Start E H
0 0 4 8 13 15

4 8 13 15
0 4 2

B D G
0 3 3 7 8 13
8 13
3 4 5
 LS/LF Times for
Milwaukee Paper
A C F
0 2 2 4 4 7

0 2 2 4 10 13
2 2 3

Start E H
0 0 4 8 13 15

0 0 4 8 13 15
0 4 2

B D G
0 3 3 7 8 13
1 4 4 8 8 13
3 4 5
 Computing Slack Time

After computing the ES, EF, LS, and LF times

for all activities, compute the slack or free
time for each activity

 Slack is the length of time an activity can

be delayed without delaying the entire
project

Slack = LS – ES or Slack = LF – EF
 Computing Slack Time
Earliest Earliest Latest Latest On
Start Finish Start Finish Slack Critical
Activity ES EF LS LF LS – ES Path

A 0 2 0 2 0 Yes
B 0 3 1 4 1 No
C 2 4 2 4 0 Yes
D 3 7 4 8 1 No
E 4 8 4 8 0 Yes
F 4 7 10 13 6 No
G 8 13 8 13 0 Yes
H 13 15 13 15 0 Yes
 Critical Path for
Milwaukee Paper
A C F
0 2 2 4 4 7

0 2 2 4 10 13
2 2 3

Start E H
0 0 4 8 13 15

0 0 4 8 13 15
0 4 2

B D G
0 3 3 7 8 13
1 4 4 8 8 13
3 4 5
 Critical Path Example

Perform a Critical Path Analysis

Activity Immediate Predecessors Time (weeks)
A - 6
B - 7
C A 3
D A 2
E B 4
F B 6
G C, E 10
H D, F 7
 C
6 9

8 11
A 3 G
0 6 11 21

2 8 11 21
6 D 10
6 8

12 14
Start
2
End
0 0 21 21
0 0 E 21 21
0 0
7 11

B 7 11
0 7 4 H
13 20
0 7 14 21
7 F 7
7 13

8 14
6
 Computing Slack Time
Earliest Earliest Latest Latest On
Start Finish Start Finish Slack Critical
Activity ES EF LS LF LS – ES Path

A 0 6 2 8 2 No
B 0 7 0 7 0 Yes
C 6 9 8 11 2 No
D 6 8 12 14 6 No
E 7 11 7 11 0 Yes
F 7 13 8 14 1 No
G 11 21 11 21 0 Yes
H 13 20 14 21 1 No
 Probabilistic Time Estimates
 Optimistic time
 Time required under optimal conditions
 Pessimistic time
 Time required under worst conditions
 Most likely time
 Most probable length of time that will be
required
 Probabilistic Estimates

Beta Distribution

to tm te tp

Activity Optimistic Most likely Pessimistic

start time time (mode) time
 Expected Time

te = t o + 4t m +t p
6
te = expected time
to = optimistic time
tm = most likely time
tp = pessimistic time
 Variance

2 (t
= p o– t ) 2

36

2 = variance
to = optimistic time
tp = pessimistic time
 Computing Variance
Most Expected
Optimistic Likely Pessimistic Time Variance
Activity a m b t = (a + 4m + b)/6 [(b – a)/6]2

A 1 2 3 2 .11
B 2 3 4 3 .11
C 1 2 3 2 .11
D 2 4 6 4 .44
E 1 4 7 4 1.00
F 1 2 9 3 1.78
G 3 4 11 5 1.78
H 1 2 3 2 .11
 Probability of Project
Completion
Project variance is computed by
summing the variances of critical
activities
p2 = Project variance
= (variances of activities
on critical path)
 Probability of Project
Completion
Project variance is computed by summing
the variances of critical activities

Project variance
p2 = .11 + .11 + 1.00 + 1.78 + .11 = 3.11

Project standard deviation

p = Project variance
= 3.11 = 1.76 weeks
 Probability of Project
Completion
PERT makes two more assumptions:

 Total project completion times follow a

normal probability distribution
 Activity times are statistically
independent
Probability of Project
Completion
Standard deviation = 1.76 weeks

15 Weeks
(Expected Completion Time)
 Probability of Project
Completion
What is the probability this project can
be completed on or before the 16 week
deadline?

Z = due – expected date /p

date of completion
= (16 wks – 15 wks)/1.76

= 0.57 Where Z is the number of

standard deviations the due
date lies from the mean
 Probability of Project
Completion
0.57 Standard deviations
Probability
(T ≤ 16 weeks)
is 71.57%

15 16 Time
Weeks Weeks
 Determining Project
Completion Time
Due date = 15 + 2.33 x 1.76
Probability = 19.1 weeks
of 0.99

Probability
of 0.01

2.33 Standard Z
Z = 2.33 deviations
0 2.33
 PERT Example
Most Expected
Optimistic Likely Pessimistic ImmediateVariance
Time
Activity a m b t = (aPredecessors
+ 4m + b)/6 [(b – a)/6]2

A 3 6 8 5.83 - 0.69
B 2 4 4 3.67 - 0.11
C 1 2 3 2.00 - 0.11
D 6 7 8 7.00 C 0.11
E 2 4 6 4.00 B,D 0.44
F 6 10 14 10.00 A,E 1.78
G 1 2 4 2.17 A,E 0.25
H 3 6 9 6.00 F 1.00
I 10 11 12 11.00 G 0.11
J 14 16 20 16.33 C 1.00
K 2 8 10 7.33 H,I 1.78
 Advantages of PERT

 Forces managers to organize

 Provides graphic display of activities
 Identifies
4
 Critical activities 2

 Slack activities 1 5 6

3
 Limitations of PERT

 Important activities may be omitted

 Precedence relationships may not be
correct
4
 Estimates may include 2
a fudge factor
 May focus solely 1 5 6

on critical path
142 weeks