PERT/CPM

(For Project Scheduling & Management)

INTRODUCTION:
Basically, CPM (Critical Path Method) and PERT (Programm Evaluation Review Technique)
are project management techniques, which have been created out of the need of Western
industrial and military establishments to plan, schedule and control complex projects.

BRIEF HISTORY OF CPM/PERT:

CPM/PERT or Network Analysis as the technique is sometimes called, developed along two
parallel streams, one industrial and the other military.
CPM was the discovery of M.R.Walker of E.I.Du Pont de Nemours & Co. and J.E.Kelly of
Remington Rand, circa 1957. The computation was designed for the UNIVAC-I computer.
The first test was made in 1958, when CPM was applied to the construction of a new
chemical plant. In March 1959, the method was applied to maintenance shut-down at the Du
Pont works in Louisville, Kentucky. Unproductive time was reduced from 125 to 93 hours.
PERT was devised in 1958 for the POLARIS missile program by the Program Evaluation
Branch of the Special Projects office of the U.S.Navy, helped by the Lockheed Missile
Systems division and the Consultant firm of Booz-Allen & Hamilton. The calculations were
so arranged so that they could be carried out on the IBM Naval Ordinance Research
Computer (NORC) at Dahlgren, Virginia.

PLANNING, SCHEDULING & CONTROLLING:

Planning, Scheduling (or organizing) and Control are considered to be basic Managerial
functions, and CPM/PERT has been rightfully accorded due importance in the literature on
Operations Research and Quantitative Analysis.
Far more than the technical benefits, it was found that PERT/CPM provided a focus around
which managers could brain-storm and put their ideas together. It proved to be a great
communication medium by which thinkers and planners at one level could communicate their
ideas, their doubts and fears to another level. Most important, it became a useful tool for
evaluating the performance of individuals and teams.
There are many variations of CPM/PERT which have been useful in planning costs,
scheduling manpower and machine time. CPM/PERT can answer the following important
questions:

How long will the entire project take to be completed? What are the risks involved?
Which are the critical activities or tasks in the project which could delay the entire
project if they were not completed on time?
Is the project on schedule, behind schedule or ahead of schedule?

If the project has to be finished earlier than planned, what is the best way to do this at
the least cost?

The Framework for PERT and CPM

Essentially, there are six steps which are common to both the techniques. The procedure is
listed below:
1. Define the Project and all of its significant activities or tasks. The Project (made up
of several tasks) should have only a single start activity and a single finish activity.
2. Develop the relationships among the activities. Decide which activities must precede
and which must follow others.
3. Draw the "Network" connecting all the activities. Each Activity should have unique
event numbers. Dummy arrows are used where required to avoid giving the same
numbering to two 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.

TERMINOLOGIES:

PERT event: a point that marks the start or completion of one or more activities. It
consumes no time and uses no resources. When it marks the completion of one or
more activities, it is not "reached" (does not occur) until all of the activities leading to
that event have been completed.
Predecessor event: an event that immediately precedes some other event without
any other events intervening. An event can have multiple predecessor events and can
be the predecessor of multiple events.
Successor event: an event that immediately follows some other event without any
other intervening events. An event can have multiple successor events and can be the
successor of multiple events.
PERT activity: the actual performance of a task which consumes time and
requires resources (such as labor, materials, space, machinery). It can be understood
as representing the time, effort, and resources required to move from one event to
another. A PERT activity cannot be performed until the predecessor event has
occurred.
PERT sub-activity: a PERT activity can be further decomposed into a set of subactivities. For example, activity A1 can be decomposed into A1.1, A1.2 and A1.3 for
example. Sub-activities have all the properties of activities, in particular a sub-activity
has predecessor or successor events just like an activity. A sub-activity can be
decomposed again into finer-grained sub-activities.

Optimistic time (O): the minimum possible time required to accomplish a task,
assuming everything proceeds better than is normally expected
Pessimistic time (P): the maximum possible time required to accomplish a task,
assuming everything goes wrong (but excluding major catastrophes).
Most likely time (M): the best estimate of the time required to accomplish a task,
assuming everything proceeds as normal.
Expected time (TE): the best estimate of the time required to accomplish a task,
accounting for the fact that things don't always proceed as normal (the implication
being that the expected time is the average time the task would require if the task were
repeated on a number of occasions over an extended period of time).
TE = (O + 4M + P) 6

Float or slack is a measure of the excess time and resources available to complete a
task. It is the amount of time that a project task can be delayed without causing a
delay in any subsequent tasks (free float) or the whole project (total float). Positive
slack would indicate ahead of schedule; negative slack would indicate behind
schedule; and zero slack would indicate on schedule.
Critical path: the longest possible continuous pathway taken from the initial event
to the terminal event. It determines the total calendar time required for the project;
and, therefore, any time delays along the critical path will delay the reaching of the
terminal event by at least the same amount.
Critical activity: An activity that has total float equal to zero. An activity with
zero float is not necessarily on the critical path since its path may not be the longest.
Lead time: the time by which a predecessor event must be completed in order to
allow sufficient time for the activities that must elapse before a specific PERT event
reaches completion.
Lag time: the earliest time by which a successor event can follow a specific PERT
event.
Fast tracking: performing more critical activities in parallel
Crashing critical path: Shortening duration of critical activities

PERT CHART:

A PERT chart presents a graphic illustration of a project as a network diagram consisting of

numbered nodes (either circles or rectangles) representing events, or milestones in the project
linked by labeled vectors (directional lines) representing tasks in the project. The direction of
the arrows on the lines indicates the sequence of tasks. In the diagram, for example, the tasks
between nodes 1, 2, 4, 8, and 10 must be completed in sequence. These are called dependent
or serial tasks. The tasks between nodes 1 and 2 and nodes 1 and 3 are not dependent on the
completion of one to start the other and can be undertaken simultaneously. These tasks are
called parallel or concurrent tasks. Tasks that must be completed in sequence but that don't
require resources or completion time are considered to have event dependency. These are
represented by dotted lines with arrows and are called dummy activities. For example, the
dashed arrow linking nodes 6 and 9 indicates that the system files must be converted before
the user test can take place, but that the resources and time required to prepare for the user
test (writing the user manual and user training) are on another path. Numbers on the opposite
sides of the vectors indicate the time allotted for the task.
The PERT chart is sometimes preferred over the Gantt chart, another popular project
management charting method, because it clearly illustrates task dependencies. On the other

hand, the PERT chart can be much more difficult to interpret, especially on complex projects.
Frequently, project managers use both techniques.

Advantages

PERT chart explicitly defines and makes visible dependencies (precedence

relationships) between the work breakdown structure (commonly WBS) elements.
PERT facilitates identification of the critical path and makes this visible.
PERT facilitates identification of early start, late start, and slack for each activity.
PERT provides for potentially reduced project duration due to better understanding of
dependencies leading to improved overlapping of activities and tasks where feasible.
The large amount of project data can be organized & presented in diagram for use in
decision making.

Disadvantages

There can be potentially hundreds or thousands of activities and individual

dependency relationships.
PERT is not easily scalable for smaller projects.
The network charts tend to be large and unwieldy requiring several pages to print and
requiring specially sized paper.
The lack of a timeframe on most PERT/CPM charts makes it harder to show status
although colours can help (e.g., specific colour for completed nodes).

Uncertainty in project scheduling

During project execution, however, a real-life project will never execute exactly as it
was planned due to uncertainty. This can be due to ambiguity resulting from
subjective estimates that are prone to human errors or can be the result of variability
arising from unexpected events or risks. The main reason that PERT may provide
inaccurate information about the project completion time is due to this schedule
uncertainty. This inaccuracy may be large enough to render such estimates as not
helpful.
One possible method to maximize solution robustness is to include safety in the
baseline schedule in order to absorb the anticipated disruptions. This is called
proactive scheduling. A pure proactive scheduling is a utopia; incorporating safety in
a baseline schedule which allows for every possible disruption would lead to a
baseline schedule with a very large make-span. A second approach, termed reactive
scheduling, consists of defining a procedure to react to disruptions that cannot be
absorbed by the baseline schedule.

RESOURCE ALLOCATION
A shortcoming of most scheduling procedures is that they do not address
the issues of resource utilization and availability.
Scheduling procedures tend to focus on time rather than physical
resources.
Schedules should be evaluated not merely in terms of meeting project
milestones, but also in terms of the timing and use of scarce resources.
A fundamental measure of the project managers success in project
management is the skill with which the trade-offs among performance,
time, and cost are managed.
I can shorten this project by 1 day at a cost of $400. Should I do it?
The extreme points of the relationship between time use and resource use are
the following:
Time Limited: The project must be finished by a certain time,
using as few resources as possible. But it is time, not resource
usage, that is critical
Resource Limited: The project must be finished as soon as
possible, but without exceeding some specific level of resource
usage or some general resource constraint
Resource loading describes the amounts of individual resources an
existing schedule requires during specific time periods.
The loads (requirements) of each resource type are listed as a function of
time period.
Resource loading gives a general understanding of the demands a project
or set of projects will make on a firms resources.
The project manager must be aware of the flows of usage for each input
resource throughout the life of the project.
It is the project managers responsibility to ensure that the required
resources, in the required amounts, are available when and where they are
needed.

Resource Leveling (Smooting)

Resource leveling aims to minimize the period-by-period variations in
resource loading by shifting tasks within their slack allowances.
The purpose is to create a smoother distribution of resource usage.
Resource leveling, referred to as resource smoothing, has two objectives:
To determine the resource requirements so that they will be
available at the right time,
To allow each activity to be scheduled with the smoothest
Resource management is a multivariate, combinatorial problem,
i.e. multiple solutions with many variables, the mathematically
optimal solution may be difficult or infeasible.
More common approach to analyzing resource leveling problems is
to apply some resource leveling heuristics.
Possible transition across usage levels.

RESOURCE LEVELING HEURISTICS:

Prioritizing resource allocation include applying resources to activities:
with the smallest amount of slack
with the smallest duration
that start earliest
with the most successor tasks
requiring the most resources

RESOURCE LOADING CHART:

Another way to create a visual diagram of resource management problem
is to use resource-loading charts.
Resource conflicts can be seen in the resource-loading charts.
They are used to display the amount of resources required as a function of
time on a graph.

 Each activitys resource requirements are represented as a block (resource

requirement over time).
Resource limit is set at 8 hourly units per day.
Display the amount of resources required as a function of time.