PERT AND CPM

PERT (program evaluation and review technique)

and CPM (critical path method) are two of the
most widely used techniques for planning and
coordinating large scale projects.
By using PERT or CPM managers are able to
obtain:

A graphical display of the project activities

An estimate of how long the project will take
An indication of which activities are most critical
An indication of how long an activity can be delayed
without lengthening the project

Network Models PERT & CPM

PERT Initial use was for the Polaris Missile Project
- Late 1950s
CPM was developed to plan and coordinate
maintenance projects in chemical industry.
Although two techniques were developed
independently, they have a great deal in common.
Initial differences between them have disappeared.
Used to planning and controlling many programs &
projects consisting of various activities (all activities
be completed)

The framework of PERT and CPM

For proceeding with PERT/CPM following
common six points have to be followed:

Define the project with significant activities or tasks

Develop relationship among the activities
Draw network connecting all activities
Assign time and/or cost estimates to each activity
Compute the critical path
Use network to help plan, schedule, monitor and
control the project

Terminology
Activity: A specific or set of tasks required by the
project
Event: Outcome of one or more activities
Network: Combination of all activities and events
Path: Series of connected activities or between
any two events
Critical path: Longest - Any delay would delay
the project
Slack/float: Allowable slippage for a path

Precedence Diagramming Method

(PDM) Activities on Nodes (AON)

Finish-to-start (most often used)

Finish-to-finish
Start-to-start
Start-to-finish

Start

A-B; B-C; etc

B-E
B-D
F-C

C
Finish

No repetitive activities or conditional

loops! No Dummies!
Often used for Three Point Estimates (was
called PERT) and Critical Path Methods

Arrow Diagramming Method

(ADM) Activities on Arrows (AOA)
2
Star
t

A
1
D

dum
my
4

Finish

E
Finish to start only (need additional nodes for
leads and lags)
No repetitive activities or conditional loops
May use dummies

A simple project network diagram

Order furniture

Locate
facilities

4
Furniture setup

2
Remodel

1
Interview

Hire & train

Move
in

Activity relationship
a

b
c

c
d

b
Dummy Activity

(A)
(C)

1
(B)

Activity
A
B
C
D

(D)

Immediate
Predecessors
A
A, B

A
1

Dummy Activity

B
5

4
D

2
(B)

(A)

(E)

4
(C)

(D)

3
Activity List for a Two-Machine Maintenance Project
Activity Description
Expected Time
(in days)
A

Overhaul machine I

Adjust machine I

Overhaul machine II

Adjust machine II

Test system

Routing
(C)

Product
Design
(A)

Prototype
(D)

1
Market
Research
Plan
(B)

Marketing
Brochure
(E)
Market
Survey
(H)

5
Testing
(G)

Cost
Estimates
(F)
Final
Report
(J)

Pricing
and
Forecast
(I)

COMPLETION

Activity list for the Daugherty Porta-Vac Project

Activity

Description

A
B
C
D
E
F
G
H
I
J

R&D product design

Plan market research
Routing (manufacturing engineering)
Build prototype model
Prepare marketing brochure
Cost estimates (industrial engineering)
Preliminary product testing
Market survey
Pricing and forecast report
Final report

Immediate
Predecessors
A
A
A
C
D
B, E
H
F, G, I

PERT Diagram
Activity
A
B
C
D
E
F
G
H
I
J
K

Preceding Activity
---A
A
C
C
E, B, F
E, B, F
D, H
G, I, J

D
5

2
E

H
B

1
C

F
3

J
J
6

Sales Management Training Program

A
B
C
D
E
F
G
H
I

Plan topic
Obtain speakers
List meeting locations
Select location
Speaker travel plans
Final check with speakers
Prepare and mail brochure
Take reservations
Last minute details

Network Diagram
2
A

5
B

1
4
C
3

7
E

I
8

Activities of a project
Activity
a
b
c
d
e
f
g
h
I
j

Predecessor Activity
a
b,c
b,c
b,c
c
g,h
d,e

Network Diagram

d
6

c
4

f
g

j
7
i

Make a Network Diagram

Activity Time Preceding
(days) Activity
A
B
C
D
E
F
G
H
I
J
K
L
M
N
O
P
Q

6
2
2
3
8
5
9
3
2
3
10
1
10
3
5
4
5

----A
B, E
C, F, D
-P, H
B, E
G
D
I, J, K
L, Q
M, N
A
G

I, 2
5

8
P, 4

H, 3

A,6

J, 3

E, 8
B, 2

M, 10

K,
10

C, 2
D, 3

F, 5
6

O, 5

N, 3
G, 9

7
Q, 5

Dum1
K, 1

10

11

A
B
C
D
E
F
G
H
I
J
K
L
M
N
O
P

-6
-7
-8
A
5
A
6
A
8
C
5
C
6
B, G, F
B, G, F
E, J, L
I, H 5
I, H 4
L, E, J
K, D 4
M, N, O

6
4
3

2
4

Network Diagram
D, 5

2
A, 6
1

E, 6

F, 8
B, 7

G, 5

J, 4
I, 6

C, 8

O, 4

L, 5

N,2
M, 4

7
H, 6
4

Dum

P, 4

Problem
I

B, E, F

4
G (5)

C (3)

A (8)
1

D (7)

E (6)

B (10)

6
3
H (3)

F (7)
5
(Activity time in days in parenthesis)

Questions??
Identify the critical path
How long will it take to complete this project?
Can activity E be delayed without delaying
the entire project?
Can activity D be delayed without delaying
the entire projec?, for how many days!
What is the schedule for activity F (I.e., start
and completion times)

Critical Path Analysis

Provides activity information
Earliest (ES) & latest (LS) start
Earliest (EF) & latest (LF) finish
Slack (S): Allowable delay

Identifies critical path

Longest path in network

Shortest time project can be completed
Any delay on activities delays project
Activities have 0 slack

Critical Path Analysis

Example

Network Solution
B
B
A
A
1

D
D

C
C
3

E
E

FF
4

G
G
1

Earliest Start & Finish Steps

Begin at starting event & work forward
ES = 0 for starting activities
ES is earliest start

EF = ES + Activity time
EF is earliest finish

ES = Maximum EF of all predecessors for

non-starting activities

Activity A
Earliest Start Solution
Activity
A
B
C
D
E
F

ES
0

EF
1

LS

A
A
1

LF

Slack

B
B

D
D

E
E
3 G
G

C
C

FF

For
Forstarting
starting activities,
activities, ES
ES == 0.
0.

Earliest Start Solution

A
A
1

B
B

D
D

E
E
3 G
G

C
C

FF

Latest Start & Finish Steps

Begin at ending event & work backward
LF = Maximum EF for ending activities
LF is latest finish; EF is earliest finish

LS = LF - Activity time
LS is latest start

LF = Minimum LS of all successors for nonending activities

Activity
A
B
C
D
E
F
G

ES
0
1
1
7
9
4
12

EF
1
7
4
9
12
8
13

LS

LF

Slack

B
B D
D E
E

A
A 6
1 C
C

3 G
G
FF 1
4

13

Latest Finish Solution

Activity ES
EF
A
1
BB0 DD EE
B AA 61 2 73
C 1 1
4
CC
FF
D
7
9
3
4
E
9
12
F
4
8
G
12
13

G
G

LS
0
1
4
7
9
7
12

LF
1
7
7
9
12
12
13

Slack

Compute Slack

Critical Path

A
A
1

BB

D
D

EE

C
C

FF

G
G
1

Gantt Chart - ES
A
C
B
D
E
F
G
0

10

15

20

25

30

35

40

Exercises
Ex. 1
Draw a PERT Network, Identify Critical Path
and Calculate Critical Time.

Activities

Preceding Activities

Duration (Days)

----

----

----

A,B,C

E,R

E,R

H,I

E,F,G

G,Q

G,Q

L,M

N,K,O,J

A, B, C

A, B, C

CRITICAL PATH CALCULATIONS

The critical path calculations include two phases. The first
phase is called the forward pass, where calculations begin
from the start node and move to the end node.

The second phase, called the backward pass, begins

calculations from the end node and moves to the start
node, represents the latest occurrence time of the
corresponding event. The forward pass is considered now.

Duration Estimates
The time estimates are calculated based on
two exercises in Network Diagrams
Forward Pass: To determine Earliest times
Backward Pass: To determine Latest times

Methods for calculating Fwd and Bckwd Pass

Zero Method
Assumes start point as Zero
EF = ES +D for forward pass
LS = LF +D For backward pass

Example Zero Method

Slack or Float

Total Float: The total amount of time that a schedule activity may be
delayed from its early start without delaying the project finish date, or
violating a schedule constraint.
Total Float = LS ES

Free Float: The amount of time that a schedule activity can be delayed
without delaying the early start date of any immediately following
schedule activities
Free Float = ESs EFp - Lag

Lead and Lag

Lead Time: Part of activity which must be done before
following activity can start

Lag Time: Part of activity cannot begin until the preceding

activity have finished

Exercises
Ex. 2
Take a Real World or Hypothetical Project,
Identify Activities, Estimate Activity Time and
Draw a PERT Network. Identify Critical Path
and Calculate

PERT Calculations

Step 1: Define tasks

Step 2: Place Tasks in a logical order, find the critical path
The longest time path through the task network. The series of tasks
(or even a single task) that dictates the calculated finish date
Step 3: Generate estimates
Optimistic, pessimistic, likely and PERT- expected
Standard Deviation and variance
Step 4: Determine earliest and latest dates
Step 5:Determine probability of meeting expected date
Steps 1 and 2 are logic and legwork, not calculation these require a
clear goal

PERT Calculations

Estimated durations per task

Most Optimistic (TO) best case scenario
Most Likely (TL) normal scenario
Most Pessimistic (TP) Worst case scenario

Formula derives a probability-based expected duration

(TO x 1 + TL x 4 + TP x 1) / 6 = TE
Read this formula as the sum of (optimistic x 1 + likely x 4 + pessimistic x 1)
divided by 6 = expected task duration

Complete this calculation for all tasks

PERT Activity Times

3 time estimates
Optimistic times (a)
Most-likely time (m)
Pessimistic time (b)

Follow beta distribution

Expected time: t = (a + 4m + b)/6
Variance of times: v = (b - a)2/36

Project Times
Expected project time
(T)
Sum of critical path
activity times, t

Project variance (V)

Sum of critical path
activity variances, v

a 4m b
ET
6

b a

36

Example
Activity
A
B
C
Project

a m
b
2 4
8
3 6.1 11.5
4 8 10

A
A

B
B

C
C

4.33

6.48

7.67

E[T]
4.33
6.48
7.67

variance
1
2
1

18.5

SD and Variance
Standard deviation and variance
Standard deviation (SD) is the average deviation from the estimated
time
SD=(TP-T0)/6 {read as (pessimistic-optimistic)/6}
As a general rule, the higher the standard deviation the greater the amount
of uncertainty

Variance (V) reflects the spread of a value over a normal distribution

V=SD2 (Standard deviation squared)

Working Example
Consider the sample project Installing computers
with furniture, set up using a list
Start by setting up a table to organize data
Task ID Description

Duration

Mark Electricity and network points

Set up wiring

Buy computers

Buy Furniture

Install Furniture

Install Computers

2
Buy
Computers
1
Mark
Utilities

4
Set up
Wiring
3
Buy Furniture

5
Install
Furniture

6
Install
Computer
s

In considering all tasks on the previous slide, a table

Critical
Tasks
might
lookPath
like
this
ID

T0

TP

TL

TE

SD

0.33

0.1089

0.33

0.1089

0.33

0.1089

1.2

0.16

Other Project Tasks

2

0.33

0.1089

2.2

0.16

0.0256

T0 = Time Optimistic,
TP = Time Pessimistic
TL = Time Likely
TE = Time Expected (Derived by PERT)
SD = Standard Deviation
V = Variance