PROJECT MANAGEMENT

REFERENCE: A Management Guide to Pert/CPM

by Jerome D. Wiest and Ferdinand K Levy,
Prentice Hall of India.
 SESSION OBJECTIVES/SCOPE
To acquaint the participants with the Project
Management Techniques such as PERT
(Program Evaluation & Review Technique)
and CPM (Critical Path Method).
 DEFINITION OF A PROJECT
A project consists of a number of activities
which when completed marks the end of the
Project. The activities are to be performed in
some defined sequence. This technological
sequence is typically captured by noting the
“immediate predecessor (s)” (Imm.Pred.) for
each activity. Data for a typical project is
shown next.
EXAMPLE 1 :PROJECT DATA:
Preparing MDP Budget
Activity Time Imm.Pred.

A. Forecast number
of participants 14 -
B. Survey Program
fees 3 -

C. Decide on Fees 3 A,B

D. Prepare Program
Schedule 7 A
E. Estimate Cost 4 D
F.Prepare Budget 10 C,E
 NETWORK DIAGRAM
14 7 4
A D E

10
3
F
C

3
B

Assuming resources are not a constraint; determine

the time required to prepare the budget?
 DETERMINING PROJECT
DURATION
• CRITCAL PATH is the longest path in the
network. The length of the critical path
gives the Project Duration.
• The activities in the critical path are the
critical activities.
• From the given Network Diagram, we find
that there are three paths (a) A-D-E-F, (b)
A-C-F and (c) B-C-F with path lengths 35
days, 27 days and 16 days respectively.
 Mass Production Planning and
Project Planning
Mass Production represents high volume
Production; Project is a one shot affair. The
data for these are similar looking but the
queries and hence the planning techniques
are different. For example, given the data on
an assembly, the query may be to determine
how the activities are to be planned to get
a defined continuous output per hour.
 Assembly Data
Activity Time(mins.) Imm.Pred.
A. 2 -
C. 1 A
D. 2 A
D. 1 B,C
E. 3 D
(Time of 2 minutes for activity A implies
that one man working on the activity will take 2
Minutes to do it.)
 Assembly Planning
Query: Number of persons to employ and
work to be assigned to each.
1
B
1 3
2
D E
A
2

C
 Algorithm for finding Critical Path :
Notations
• ES Early Start (Earliest possible time that an
activity can begin).
• EF Early Finish = ES of the activity + activity
duration
• LS Late Start (Latest time an activity can
begin without delaying the project)
• LF Late Finish = LS of an activity + activity
duration
• ES, EF etc., of any activity “a”, are written as
ES(a), EF(a) etc.
 Computations of ES, EF, LF,LS
• Let Start time for the Project = 0, then
ES(a)= 0, for all starting activities.
• For other activities, ES(a) = Max[EF(all
predecessors of a)]
• EF(a) = ES(a) + duration of “a”
• T = Max[EF(all activities)] = Earliest
Finish Time for the Project.
• Let LF(a) = T for all ending activities.
 Computations (contd.)
• For other activities, LF(a) = Min[LS(all
successors of “a”]
• LS(a) = LF(a) – duration of “a”

• TS(a) = LS(a)-ES(a) = LF(a)-EF(a)

• FS(a) = Min[ES(all of immediate
successors of a)]-EF(a)
 SOLUTION: EXAMPLE 1

Activity ES EF LF LS
A 0 14 14 0
B 0 3 22 19
C 14 17 25 22
D 14 21 21 14
E 21 25 25 21
F 25 35 35 25
 SOLUTION: EXAMPLE 1(cont.)
• Identification of critical activities

Activities with ES=LS (or EF=LF) are

the Critical activities.
A, D, E, F are the critical activities.
• ADEF is the Critical Path
• The project duration is 35 days.
 Example 2 : Project Data

Act. Imm.Pred. a m b
A - 2 5 14
B - 3 12 21
C A 5 14 17
D B 2 5 8
E B 6 15 30
F C,D 1 4 7
 Example 2 (Contd.)
• “a” is the most optimistic time
• “m” denotes most probable time
• “b” denotes the most optimistic time
Question
Assuming resources are not a constraint;
determine the expected duration of the
project. What is the probability of completing
the project in (a)33 days (b) 23 days?
 PERT : COMPUTATIONS
Step 1 Calculate Expected duration of
Each activity = te= (a+4*m+b)/ 6.
Step 2 Taking te s’ as the activity durations
Determine the critical path. Say, the
length of the critical path is μ days.
Step 3 Calculate the Standard deviation (σ)
and variance (σ 2 ) of each activity in
the critical path.
Standard Deviation = σ = (b-a)/6
Variance = σ 2
 PERT Computations (Contd.)
Network Diagram

6 13 4

A F
C

5
D 16

12 E

B
 SOLUTION : EXAMPLE 2
The Critical Path in the network) is BE.
Expected Project Duration (say, μ ) is the sum
of the expected duration of the activities on the
critical path. Variance (σ) of project duration is
the sum of the variances of the activities on the
critical path. Project Duration (T) is a random
variable that is normally distributed with mean
of μ and standard deviation of σ.
Check, for the given problem, T is N (28,5) σ
 SOLUTION : EXAMPLE 2
The probability of completing a project by “D”
days can be determined as follows:

Find Z = (D – μ)/σ , where μ and σ are the mean

And standard deviation of the project duration.

Find the required Probability by a table look-up

corresponding to the Z value obtained.
 TABLE
Z Prob. Z Prob. Z Prob.
3.0 .999 0.8 .788 -1.4 .081
2.8 .997 0.6 .726 -1.6 .055
2.6 .995 0.4 .655 -1.8 .036
2.4 .992 0.2 .579 -2.0 .023
2.2 .986 0.0 .500 -2.2 .014
2.0 .977 -.2 .421 -2.4 .008
1.8 .964 -.4 .345 -2.6 .005
1.6 .945 -.6 .274 -2.8 .003
1.4 .919 -.8 .212 -3.0 .001
1.2 .885 -1 .159
1.0 .841 -1.2 .115
 SOLUTION : EXAMPLE 2
To find the probability of completing the
Project by 33 days, we note that D = 33.
Hence, Z = (33-28)/5 = 1. From the table,
the corresponding probability is 0.841.
Hence the chances of completing the
project by 33 days is 84%.
 EXAMPLE 3
Activity Imm.Pred. N M C
A - 3 1 4
B A 7 3 1
C A 4 2 4
D C 5 2 2

N denotes the normal duration in days

M denotes the minimum duration in days
C denotes the cost per day of crashing

If the time-related overhead expense for the project is

Rs.4.50 per day, find the Optimum Project Duration.
 EXAMPLE 3

7
B
3

A 5

D
4
C
SCHEDULE GRAPH

SLACK

B
7

A C D
4 5
3

PROJECT DURATION 12
OPTIMUM PROJECT DURATION
Duration Crashing Cost Indirect Cost TC
(Days) (Rs.) (Rs.) (Rs.)
12 - 54 54
11 2 49.5 51.5
10 4 45 49
9 7 40.5 47.5
8 11 36 47
7 15 31.5 46.5
6