PERT and CPM

Chapter 4
What is PERT and CPM?

PERT
- Program Evaluation and Review Technique

CPM
- Critical Path Method
 HISTORY

PERT CPM

 Developed by the US  Developed by J.E. Kelly of

Navy for the planning the Remington Rand Corp.
and control of the and M.R. Walker of Du
Polaris Missile Project Pont

 The emphasis was on  The emphasis was on the

completing the program trade-off between the
in the shortest possible cost of the project and its
time overall completion time
 PERT and CPM

 Developed independently in the late 1950s

 These are networks and a technique used for
planning and coordinating large scale projects
 The use of PERT began in 1958
 The Polaris Missile Project
CPM was designed as:

 Tool for planning

 Scheduling

 Control of construction work

 Emphasis on work or activities to be managed

PERT was developed as:

 A result of looking for an improved method of

planning

 To provide the management a periodic report

 “Is this a feasible schedule?”

PERT and CPM were developed
independently, yet, they have a great deal in
common

 PERT originally stressed Probabilistic Activity Time

Estimate

 CPM originally made no provisions for Variable

Time Estimates
 PERT/CPM is:

 A control tool
 An aid to the construction manager
 Only enable the Project Manager to see the whole
picture of the entire job
 Encourage periodic re-evaluation and provision of
an accurate measure of progress
Thus, a person in charge of each work and the
project manager know what is supposed to happen
and when it is supposed to happen.
PERT/CPM Project Requirements

 PD 1594

 Pres. Ferdinand E. Marcos issued Memorandum

Circular No. 153 (January 27, 1968)

 Executive Committee for Infrastructure Program

(June 19, 1968)

 Section 6 of R.A. 5979

PERT/CPM Project Requirements

With the use of PERT/CPM, the Manager can easily

obtain the following information:
1. The graphical display of project activities.
2. An estimate of how long will the project last.
3. Determine which activities are the most critical to
timely project completion.
4. Determine how long any activity can be delayed
without lengthening the project.
 Objectives of PERT and CPM

1. Helpful in Planning
2. Inter-relationship of various activities
3. Cost Control
4. Minimization of Maintenance
5. Reduction of time
6. Control of idle resources
7. Avoiding delays and interruptions
Three Phases of PERT/CPM

1 PLANNING

2 SCHEDULING

3 CONTROLLING AND MONITORING

 Planning

 Planning is defined as determining the relationship

between the work operation and the sequence in
which they are to be performed.

 Scheduling or sequence involves distribution of

work time to each work operation and determining
when to start and when to finish.
 Planning

 Each work operation can be performed in different

ways at different costs and in different time
duration.
 When the contract time is less, in effect it requires
higher indirect costs.
 However, there is a danger that shortening a single
operation may only increase the project cost by
may not shorten the construction time.
Critical Path Method (CPM) systematic
approach:
1. PERT/CPM pinpoints the particular work
operations whose completion times are
responsible for controlling the complete date.
2. It provides a means of speeding up a project
without excessive costs for overtime.
3. It gives a time leeway or float available for each
of the non-critical work operations.
Critical Path Method (CPM) systematic
approach:
4. It establishes time boundaries for operations
with possibilities of shifting resources,
equipment and manpower to meet time
requirements.
5. PERT/CPM indicates the earliest starting date for
each work operations and sub-contracts for
supply and delivery of materials.
6. It shows the most advantageous scheduling for
all operations.
Critical Path Method (CPM) systematic
approach:
7. It offers a means of assessing the effect on the
overall project variations on one operation such
as change orders.
8. In case of change order where the owner would
not want to extend the contract time, PERT/CPM
offers a means of re-scheduling the operations
but still to be completed at the least increase in
cost.
Critical Path Method (CPM) systematic
approach:
9. With the critical path schedule as revised to
reflect the change order, any claim if any, for
additional payment will be understood both by
the owner and the contractor.
10. In case of serious delay due to weather, late
material or equipment delivery, the network can
be revised at that stage and new computation is
made to determine the new critical operation if
any and revised float times determined for the
non-critical operations.
In any project construction undertakings,
planning is the most important
consideration which includes:
1. Gathering of all the necessary input data to make
the PERT/CPM works.
2. Planning phase is the main work of the contractor
for being familiar and knowledgeable of his costing
methods of doing business.
3. The contractor can seek assistance for the
accomplishment of his work.
4. The contractor has the complete perception,
experiences, resources, and interest in getting the
project done in the best possible time and cost.
In any project construction undertakings,
planning is the most important
consideration which includes:

5. The planning stages give the contractor a “Dry

Run” on the construction of the project.
6. If the contractor wants an effective approach
and use of the construction management, he
must do it himself.
7. By performing the work personally, one obtains
intimate first hand knowledge of the job and
gain insight and details of anticipated problems.
 Scheduling

 Defined process of translating the arrow diagram into

time table of calendar days.

 Shows the relationships between the operations and

leeway limitations.

 Non critical activities can be scheduled to more

efficiently utilize manpower and available resources
 Scheduling

 Job control through the use of PERT/CPM gives the

management a reliable system identifying job
problems.

 Progress along the arrow diagram should be

updated for immediate references.
PERT/CPM diagram should be update
periodically to account for:

1. Time discrepancies

2. Deliveries

3. Weather

4. Change orders

5. Unexpected events or conditions

Controlling and Monitoring

Flexibility and updated re-computations brought

about by changing conditions is the key to a successful
network programming. To keep the schedule more up
to date and meaningful, it can be done by hand but is
easier and less in cost if it is done with the assistance
of computer to have the following output:
1. The contractor is supplied with time status reports
showing the overall status of the project in general
and in particular.
Controlling and Monitoring

2. The contractor is provided with revised schedules

which reflect the actual work conditions and the
project status.
3. The contractor is supplied with the cost status
reports showing how much money is being
disbursed for what type of expenses.
4. The contractor should be supplied with those
reports as frequently as desired or required to
maintain control over the project.
In the Planning Phase, there are five
inputs that can be obtained:
 A network diagram defining the activities in the
project
 The duration of activities
 Cost estimates of the activities for monitoring
cost, cash flow requirements
 Resource estimates
 Trade indicators (responsibility) for activity
grouping
From the Schedule Phase, there are
four output that can be obtained:
1. The schedule of activities in the network showing
the following:
• The Critical Activities
• The Earliest Start date for each activity
• The Earliest Finish date for each activity
• The Latest Finish date each activity
• The Float which refers to the amount of extra
time available for an activity
From the Schedule Phase, there are
four output that can be obtained:
2. A Bar Chart or Time Scaled Network (arrow diagram
network for the project).
3. A Resource Analysis showing the number and kind of
resources, man power, equipment and others that are
required for each day of the project.
4. A Cash Requirements prediction indicating how much
cash to be disbursed for the job and the amount for the
job and the amount of money that will be collected as a
result of work accomplishments.
The Control Monitor Phase uses actual
data which includes:
 Additions to the project- This refers to the new
activities.
 Deletion from the project
 Changes as to duration, description, trade
indicators, cost estimates or resource estimates.
 Actual starting dates
 Actual finishing dates
The Output Phase consists of the
following:
 Time status report
 Revised schedules
 Revised Bar Charts/ Arrow Diagram or Network
 Revised resource analysis
 Revised cash flow predictions
 Cost status reports
There are three major reasons for
construction failure:
 Unbalanced organization due to lack of planning
and scheduling.
 Lack of financial planning
 Poor cost control