PERT AND CPM

By- Akshit Garg(01/24)

Hansika Khanna(15/24)
Nandita(24/24)
 PROJECT MANAGEMENT
PROJECT: project is defined as a combination of inter-related activities which must
be executed in a certain order before the entire task is completed.
Project Management: project management is the discipline of initiating, planning,
executing, controlling and closing the work of a team to achieve specific goals and
meet specific success criteria.
 BASIC TOOLS AND TECHNIQUES OF PROJECT MANAGEMENT

The various tools and techniques of project management are grouped into the following
two
heads :
1. Bar charts, milestone charts and velocity diagrams.
2. Network techniques.
BAR CHARTS, MILESTONES AND VELOCITY DIAGRAMS
• Bar charts are the two-dimensional pictorial representation of a project. In a bar
chart, the activities of the project are shown on one axis and their durations are
represented on the other axis.
• Milestone charts are the modified and improved versions of bar charts.
• Velocity diagrams are useful for representing the activities which require a
series of crews working in a given sequence.
 WHAT IS NETWORK ANALYSIS?

• Network Analysis is a technique for planning and controlling

large projects, such as construction work, Research &
Development projects, computerization of systems etc.
• Its primary aim is to program and monitor the progress of a
project so that the project is completed in the minimum time. In
doing this, it pinpoints the parts of the project which are
"crucial“
• It can also be used in allocating resources such as labor and
equipment and thus helps to make the total cost of a project
minimum.
 NETWORK TECHNIQUES

A network (also called network diagram or network technique) is a symbolic representation of the
essential characteristics of a project. PERT and CPM are the two most widely applied techniques.
(a) Programme Evaluation and Review Technique(PERT)
• It uses event-oriented network in which successive events are joined by arrows. It is preferred for
projects that are non-repetitive and in which time for various activities cannot be precisely
predetermined.
• There is no significant past experience to guide; they are once-through projects. Launching a new
product in the market by a company, research and development of a new war weapon, launching
of satellite, sending space craft to Mars are PERT projects.
(b) Critical Path Method (CPM)
• It uses Thus, network which consists of a number of well recognized jobs, tasks or activities. Each
activity is represented by an arrow and the activities are joined together by events.
• CPM is generally used for simple, repetitive types of projects for which the activity times and costs
are certainty and precisely known. Projects like construction of a building, road, bridge, physical
verification of store, yearly closing of accounts by a company can be handled by CPM. Thus, it is
deterministic rather than probabilistic model.
 HISTORY

• PERT (Programme Evaluation and Review Technique) was

developed in 1956-58 by a research team to help in the planning and
scheduling of the US Navy's Polaris Nuclear Submarine Missile project
involving thousands of activities. The objective of the team was to
efficiently plan and develop the Polaris missile system. This technique
has proved to be useful for projects that have an element of uncertainty
in the estimation of activity duration, as is the case with new types of
projects which have never been taken up before.
• CPM (Critical Path Method) was developed by E.I. DuPont company
along with Remington Rand Corporation almost at the same time, 1956-
58. The objective of the company was to develop a technique to monitor
the maintenance of its chemical plants. This technique has proved to be
useful for developing time-cost trade-off for projects that involve
activities of repetitive nature.
 WHAT IS CRITICAL PATH?

• The sequence of project

activities which add up to
the longest overall
duration.
• The critical path
determines the shortest
time possible to
complete the project.
 WHAT IS CRITICAL PATH METHOD?

• The objective of critical path analysis is to estimate the total project

duration and to assign starting and finishing times to all the
activities in the project. This helps to check the actual progress
against the scheduled duration of the project
• The duration of individual activities may uniquely determine (in case
of CPM) or may involve the Three-time estimates (in case of PERT)
out of which the expected duration of an activity is computed.
 ASSUMPTIONS OF CPM

• Activity Times are Deterministic:

Unlike PERT, CPM assumes that the time required for each activity is
deterministic, meaning that the activity duration is known with certainty.
This simplifying assumption makes calculations more straightforward.
• Activity Dependency:
CPM assumes that there is a clear dependency between activities, and the
sequence in which activities are performed is well-defined. The network
diagram in CPM reflects the logical relationships between different
activities.
• No Time-Cost Trade-Offs:
CPM assumes that there is no flexibility in the project schedule, and there
are no trade-offs between time and cost. This means that the schedule is
fixed, and changes in the schedule do not affect the project cost.
 ASSUMPTIONS OF CPM

• No interruptions once started:

Once an activity begins, it continues without interruption
until completion.
• No external influences:
the method assumes that external environment(e.g.
market) do not impact the schedule.
• No resources constraints:
CPM assumes unlimited resources, meaning that task can
be scheduled without restrictions due to resource availability.
• Float Calculation:
CPM assumes that float (slack) can be calculated by
identifying the difference between the earliest and latest start
times of an activity without delaying the project.
 APPLICATIONS

1. Construction Projects:
• Scheduling tasks such as site preparation, foundation work, and finishing.
• Identifying critical activities to avoid delays in project completion.
• Managing labor, materials, and equipment effectively.
2. Software Development:
• Planning and tracking software development life cycles (SDLC).
• Identifying bottlenecks in coding, testing, and deployment phases.
• Ensuring timely delivery of software projects.
3. Manufacturing and Production:
• Optimizing production schedules to meet deadlines.
• Coordinating procurement, assembly, and quality control processes.
• Reducing downtime and improving efficiency in production lines.
 APPLICATIONS

4. Research and Development (R&D):

• Structuring complex R&D projects with multiple dependencies.
• Identifying critical tasks in product development timelines.
• Allocating resources efficiently to avoid delays.
5. Event Planning:
• Managing large-scale events, such as conferences, weddings, and concerts.
• Coordinating venue setup, logistics, and execution.
• Ensuring that critical tasks are completed on time.
6. Infrastructure Development:
• Planning transportation projects like roads, bridges, and railways.
• Identifying and mitigating risks associated with delays.
• Managing dependencies between different project phases.
 APPLICATIONS

7. Healthcare and Pharmaceuticals:

• Managing clinical trials and drug development timelines.
• Ensuring regulatory approvals are obtained on schedule.
• Planning hospital construction and facility upgrades.
8. Oil and Gas Industry:
• Scheduling exploration, drilling, and production activities.
• Coordinating logistics for offshore and onshore projects.
• Managing risk and ensuring operational efficiency.
9. Business Process Optimization:
• Streamlining operations and reducing inefficiencies.
• Enhancing workflow automation and resource allocation,.
• Implementing large-scale business transformations.
 TERMINOLOGY USED IN NETWORKS

1. Activity:
• It is physically identifiable part of a project which requires time and resources for its execution.
• An activity is represented by an arrow, the tail of which represents the start and the head, the
finish of the activity. The length, shape and direction of the arrow has no relation to the size of the
activity.
• 2. Event :
• The beginning and end points of an activity are called events or nodes. Event is a point in time
and does not consume any resources. It is represented by a circle.
• The head event, called the jth event, has always a number higher than the tail event, called the
ith event i.e. j>i.
1. Merge event – When more than one activity comes and joins an
event such an event is known as merge event.
2. Burst event – When more than one activity leaves an event such
an event is known as burst event.
3. Merge and Burst event – An activity may be merge and burst
event at the same time as with respect to some activities it can be
a merge event and with respect to some other activities it may be
a burst event
 TERMINOLOGY USED IN NETWORKS
3. Path
An unbroken chain of activity arrows connecting the initial event to some other event is called a
path.
4. Network
It is the graphical representation of logically and sequentially connected arrows and nodes representing
activities and events of a project. Networks are also called arrow diagrams.
5. Network Construction
• Firstly, the project is split into activities. Start and finish events of the project are then decided. After deciding
the precedence order, the activities are put in a logical sequence by using the graphical notations.
• Predecessor activity – Activities that must be completed immediately prior to the start of
another activity are called predecessor activities.
• Successor activity – Activities that cannot be started until one or more of other activities are
completed but immediately succeed them are called successor activities.
• Concurrent activity – Activities which can be accomplished concurrently are known as
concurrent activities. It may be noted that an activity can be a predecessor or a successor to
an event or it may be concurrent with one or more of other activities.
 TERMINOLOGY USED IN NETWORKS
6. Dummy
An activity which only determines the dependency of one activity over the other, but does not consume
any time is called a dummy activity. Dummies are usually represented by dotted line arrows.
• A dummy activity is introduced in the network for two basic reasons:
1. To comply with the rule that no two or more activities can have the same tail and head events. Such a
dummy is called grammatical dummy’.
2. To maintain the precise logic of the precedence of activities. Such a dummy is called logical dummy’.
 TERMINOLOGY USED IN NETWORKS

7. Looping
• Sometimes due to faulty network sequence a condition illustrated in Fig. 8.3 arises. Here the
activities D, E and F form a loop. Activity D cannot start until F is completed, which, in turn,
depends upon the completion of E.

• But E is dependent upon the completion of D. Thus, the network cannot proceed. This
situation can be avoided by checking the precedence relationship of the activities and by
numbering them in a logical sequence.
 WORK BREAKDOWN STRUCTURE(W.B.S)

• A project is a combination
of interrelated activities
which must be performed
in a certain order for its
completion. The process
of dividing the project into
these activities is called
Work Breakdown
Structure (W.B.S).
 NUMBERING THE EVENTS (FULKERSON’S RULE)

After the network is drawn in a logical sequence, every event is assigned a number
which is placed inside the node circle. The number sequence should be such as to
reflect the flow of the network. The rule devised by D. R. Fulkerson is used for the
purpose of numbering. It involves the following steps.
1. The initial event which has all outgoing arrows with no incoming arrow is
numbered 1.
2. Delete all the arrows coming out from node 1. This will convert some more nodes
(at least one) into initial events. Number these events 2, 3, ……..
3. Delete all the arrows going out from these numbered events to create more initial
events. Assign the next numbers to these events.
4. Continue until the final or terminal node, which has all arrows coming in with no
arrow going out, is numbered.
 STEPS IN THE CRITICAL PATH METHOD

Step 1: Specify Each Activity

The first step is to identify the main deliverables of a project.
Then you can start breaking down the high-level activities
into smaller chunks of work.
Step 2: Establish Dependencies (Activity Sequence)
Some activities will depend on the completion of others.
Listing the immediate predecessors of each activity will help
you identify the correct order.
 STEPS IN THE CRITICAL PATH METHOD

Step 3: Draw the Network Diagram

Once you have identified the activities and their dependencies,
you can draw the critical path analysis chart (CPA), known as the
network diagram
STEPS IN THE CRITICAL PATH METHOD

Step 4: Estimate Activity Completion Time

Using past experience or the knowledge of an experienced team member,
you must now estimate the time required to complete each activity. If you are
managing a smaller project, you will most likely estimate time in days. If you
are working with a complex project, you may have to measure time in weeks.
Step 5: Identify the Critical Path
There are two ways you can now identify the critical path.
1. You can eyeball your network diagram and simply identify the longest path
throughout the network (in terms of longest duration in days)
2. You can also identify critical activities with the Forward Pass/Backward
Pass technique, identifying the earliest start and finish times, and the
latest start and finish times for each activity.
 STEPS IN THE CRITICAL PATH METHOD

Step 6: Update the Critical Path Diagram to Show

Progress:
As the project progresses, you will learn the actual activity
completion times. The network diagram can then be updated
to include this information (rather than continuing to use
estimations).
 FLOAT(SLACK) OF AN ACTIVITY AND EVENT

• The slack(float) or free time is the length of time in which a non-critical

activity or an event can be delayed or extended without delaying the
total project completion time.
• Slack of an event:-The slack (or float) of an event is the difference
between its latest occurrence time, and its earliest occurrence time.

• Slack of an activity: it is the amount of activity time that can

increased or delayed without delaying project completion time. This float
is calculated as the difference between the latest finish time and the
earliest finish time for the activity.
(a)TOTAL FLOAT: The total time an activity can be delayed without delaying
the project’s completion date.
 Total Float = Late start –Early Start or Late Finish – Early Finish

• Thus, the total float of an activity is the difference of its latest start and earliest start times or the
difference of its latest finish and earliest finish times.
• If the Total Float is zero, the activity is on the critical path and cannot be delayed without
affecting the project timeline.
(b) Free float : The time an activity can be delayed without delaying the early start of its
immediate successor.
Free float of activity = ES of next activity – EF of current activity
• If Free Float is zero, it means any delay in the activity will immediately impact the next dependent activity.
(c) Independent float : The time an activity can be delayed without affecting the early start of its
successor and without being affected by the late finish of its predecessor.
Independent float of activity= ES of next activity - LF of current activity - Duration
• Independent Float is usually the least among the three and can be negative if constraints are
tight which exist in real-world.
 WHY CPM IS IMPORTANT?

• Identifies the Longest Path – CPM determines the critical path, which is the
longest sequence of dependent activities. This helps project managers understand
the minimum project duration and prioritize tasks that must be completed on time.
• Optimizes Resource Allocation – By identifying critical and non-critical tasks, CPM
enables better allocation of resources, reducing idle time and avoiding bottlenecks.
• Improves Time Management – CPM helps set realistic deadlines by estimating
task durations and dependencies, ensuring smooth project execution.
• Facilitates Risk Management – Since CPM highlights critical tasks, managers can
anticipate potential delays and take proactive measures to mitigate risks.
• Enhances Decision-Making – CPM provides a structured framework for making
informed decisions regarding task sequencing, resource constraints, and project
adjustments
• Increases Project Efficiency – By identifying tasks with float (slack time), CPM
allows for adjustments without delaying the overall project, improving flexibility and
efficiency.
 ADVANTAGES OF CPM

• Consistent framework for planning, scheduling, monitoring, and

controlling project.
• Helps proper communications between departments and functions.
• Determines expected project completion date.
• Determines the dates on which tasks may be started or must be
started if the project is to stay in schedule.
• Shows which tasks must be coordinated to avoid resource or timing
conflicts.
• Shows which tasks may run in parallel to meet project completion date.
 DISADVANTAGES OF CPM

• Reliability of CPM largely based on accurate estimates and

assumptions made.
• CPM does not guarantee the success of project.
• Resources may not actually be as flexible as management hope when
they come to address network float.
• Too many activities may the network diagram too complicated.
• Activities might themselves have to be broken down into mini
projects.
 PROBLEMS IN USING NETWORK TECHNIQUES

1. Difficulty in securing the realistic time estimates. In the case of new and non-
repetitive type projects, the time estimates produced are often mere guesses.
2. The natural tendency to oppose changes results in the difficulty of persuading
the management to accept these techniques.
3. The planning and implementation of network require personnel trained in the
network methodology. Managements are reluctant to spare the existing staff to
learn these techniques or to recruit trained personnel.
4. Developing a clear logical network is also troublesome. This depends upon the
data input the thus the plan can be no better than the personnel who provides the
data.
5. Determination of the level of network detail is another troublesome area. The
level of detail of varies from planner to planner and depends upon the judgement
and experience.