PERT / CPM advantages

1. Disciplined planning
2. Realistic objectives 3. Unambiguous communication 4. Allows management by exception of critical tasks

Project Management

PERT and CPM

Network techniques Developed in 1950s
CPM by DuPont for chemical plants (1957) PERT by Booz, Allen & Hamilton with the U.S. Navy, for Polaris missile (1958)

Consider precedence relationships and interdependencies Each uses a different estimate of activity times

Six Steps PERT & CPM

1. Define the project and prepare the work breakdown structure 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

Six Steps PERT & CPM

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

Questions PERT & CPM Can Answer

1. When will the entire project be completed? 2. What are the critical activities or tasks in the project? 3. Which are the noncritical activities? 4. What is the probability the project will be completed by a specific date?

Questions PERT & CPM Can Answer

5. Is the project on schedule, behind schedule, or ahead of schedule? 6. Is the money spent equal to, less than, or greater than the budget? 7. Are there enough resources available to finish the project on time? 8. If the project must be finished in a shorter time, what is the way to accomplish this at least cost?

A Comparison of AON and AOA Network Conventions

Activity on Node (AON) (a) A A (b) C B C Activity Meaning
A comes before B, which comes before C A and B must both be completed before C can start

Activity on Arrow (AOA)

A A B

B
B (c)
Figure 3.5

A C

B and C cannot begin until A is completed

B A C

A Comparison of AON and AOA Network Conventions

Activity on Node (AON) A (d) B D C Activity Meaning
C and D cannot begin until both A and B are completed

Activity on Arrow (AOA) A B C D

A
(e) B
Figure 3.5

C
D

C cannot begin until both A and B are completed; D cannot begin until B is completed. A dummy activity is introduced in AOA

A B

C
Dummy activity

A Comparison of AON and AOA Network Conventions

Activity on Node (AON) Activity Meaning
B and C cannot begin until A is completed. D cannot begin until both B and C are completed. A dummy activity is again introduced in AOA.

Activity on Arrow (AOA)

A (f)

B C

A
Dummy activity

B C

Figure 3.5

Why Network Diagrams?

Splits up the decision making process into
Method/logic - the order in which tasks have to be completed Time estimates for the time to completion can be added to each task Resources these can be added and then analysis carried out

Project Exercise 1
Project 1: Verification of a computer system
The followng table shows the activities required for this project. Activity ID 1 2 3 4 5 6 7 8 9 Duration (Days) 4 6 7 4 5 2 9 1 2

Activity Test Module A Test Module B Test Module C Test Combined Modules Check User Documents Print User Documents Final Systems Check Prepare Invoice Ship to Customer

Immediate Predecessor none Test Module A none Test Module B, Test Module C Test Combined Modules Check User Documents Test Combined Modules Final Systems Check Print User Documents, Final Systems Check

Drawing exercise 1
Activity A B C D E F G Predecessors A A B,C C D E,F

Draw this format in AoN format. Repeat in AoA format.

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Drawing exercise 2
Activity A B C D E F G Predecessors A,B A,B C C,D F

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Scheduling calculations:
1. Forward pass Start each activity as early as possible. ES = Max. EF of immediate predecessors EF = ES + Task time

2. Backward pass Work backward from the project completion time in step 1, starting each activity as late as possible. LS = LF Task time LF = Min. LS of immediate successors
3. Compute slack times. Slack = LS ES or LF EF
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Black Lagoon project

Work breakdown table:
Preceding tasks A B Succeeding tasks A B 3 5 5 6 7 8 4 6

Description Edit script Casting Special effects Build sets Horror scenes Other scenes Previews Edit film

Task # 1 2 3 4 5 6 7 8

Days 2 1 2 2 3 1 1 2

1 1 3 2 5 5

4 4 6

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Black Lagoon project (cont.)

Precedence diagram:
#3 (2 days) Special effects
#4 (2 days) Build sets

#1 (2 days) Edit script

#5 (3 days) Horror scenes

#7 (1 Day) Previews

#2 (1 day) Casting

#6 (1 day) Other scenes

#8 (2 days) Edit film

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What about the float?

Float represents the amount of time that the task can be delayed without affecting the outcome of the project
A task with zero float cannot be delayed and is therefore critical to the timely completion of the project

What about the float?

A time optimised project will have a sequence of tasks from start to finish that have zero float
This sequence of tasks is called the critical path

Project Exercise 1
Project 1: Verification of a computer system
The followng table shows the activities required for this project. Activity ID 1 2 3 4 5 6 7 8 9 Duration (Days) 4 6 7 4 5 2 9 1 2

Activity Test Module A Test Module B Test Module C Test Combined Modules Check User Documents Print User Documents Final Systems Check Prepare Invoice Ship to Customer

Immediate Predecessor none Test Module A none Test Module B, Test Module C Test Combined Modules Check User Documents Test Combined Modules Final Systems Check Print User Documents, Final Systems Check

Example
Activity Time Preceded By A 10 -B 7 -C 5 A D 13 A E 4 B,C F 12 D G 14 E
Chapter 11: Project Management 20

Exercise 1 Critical Path

Calculate the float for each task and identify the critical path through the project

AON Example
Milwaukee Paper Manufacturing's Activities and Predecessors
Activity A B C
D E F Immediate Predecessors

Description Build internal components Modify roof and floor Construct collection stack
Pour concrete and install frame Build high-temperature burner Install pollution control system

A
A, B C C

G
H

Install air pollution device

Inspect and test

D, E
F, G
Table 3.1

AON Network for Milwaukee Paper

F

C E H

Start

D Arrows Show Precedence Relationships

Figure 3.8

Variability in Activity Times

Three time estimates are required
Optimistic time (a) if everything goes according to plan Pessimistic time (b) assuming very unfavorable conditions Most likely time (m) most realistic estimate

Variability in Activity Times

Estimate follows beta distribution Expected time: t = (a + 4m + b)/6 Variance of times: v = [(b a)/6]2

Variability in Activity Times

Estimate follows beta distribution Expected time: Figure 3.12 t = (a + 4m + b)/6 Probability times: Variance of of 1 of in 100 Probability of 1 < a occurring v = [(b a)/6]2 in 100 of > b occurring
Probability Activity Time Optimistic Time (a) Most Likely Time (m) Pessimistic Time (b)

Computing Variance
Optimistic Activity
a

Most Likely
m

Pessimistic
b

Expected Time
t = (a + 4m + b)/6

Variance
[(b a)/6]2

A B C D E F G H

1 2 1 2 1 1 3 1

2 3 2 4 4 2 4 2

3 4 3 6 7 9 11 3

2 3 2 4 4 3 5 2

.11 .11 .11 .44 1.00 1.78 1.78 .11

Table 3.4

Probability of Project Completion

Project variance is computed by summing the variances of critical activities
2 sp = Project variance

= (variances of activities on critical path)

Probability of Project Completion

Project variance is computed by summing the variances of critical Project activitiesvariance

s2 = .11 + .11 + 1.00 + 1.78 + .11 = 3.11 p

Project standard deviation

sp = = Project variance 3.11 = 1.76 weeks

Time-cost tradeoffs
Activity direct costs Crash Activity fully expedited

Direct cost

Normal No expediting

Time

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Time-cost tradeoffs (cont.)

Project direct costs

All activities crashed Direct cost

All activities normal

Time

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Time-cost tradeoffs (cont.)

Project total costs Total cost

Total cost

Indirect cost (overhead) Direct cost Time

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