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PERT/CPM CALCULATIONS
Basic Techniques Using MS Excel And Manual Calculation
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This Unit of Instruction was crafted by Robert Hugg For Minnesota State University, Mankato Urban and Regional Studies Institute - 2004
The longest time path through the task network. The series of tasks
(or even a single task) that dictates the calculated finish date
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
Formula derives a probability-based expected duration (TE) Complete this calculation for all tasks
(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
Variance (V) reflects the spread of a value over a normal distribution V=SD2 (Standard deviation squared)
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helpful to construct a table to stay organized Consider the sample project in Unit 1 planting trees and flowers, set up using a list Rough estimates and no risk analysis No Range, simply rough estimates - unreliable? PERT Analysis will better refine estimates Start by setting up a table to organize data
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2 3 4 5 6
7
Buy Edging
7 8
? ? ? ? ? ? ? ?
3
Buy Trees
1
Start Mark Utilities
2
Dig Holes
5
Plant Trees
6
Plant Flowers
8
Install Edging Finish
4
Buy Flowers
TO
TO
TL
TP
TO-Optimistic
TM-Likely
Remember tasks 3, 4 and 7 are concurrent and do not add to the timeline
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TO 1 2 1 1 1 7
TO .5 .5 .5 1.5
CRITICAL PATH TASKS (Longest Duration) TL TP TE 3 5 3 4 7 4.17 3 6 3.17 3 5 3 2 4 2.17 15 28 15.6 OTHER PROJECT TASKS TL TP TE 1 3 1.25 1 3 1.25 1 3 1.25 3 9 3.75
TO-Optimistic
TM-Likely
SD=Standard Deviation
V .444 .694 .694 .444 .254 2.530 V .17 .17 .17 .51
Earliest Finish
LS=Latest Start
LF=Latest Finish
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For our project, figure a probability based on the most likely time, 15
days: (15-15.51)/square root(2.53) = (15-15.51)/1.59=-.3207 (Z) A corresponding probability is 37.7% (Rounded) This process can be repeated for any date desired
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http://math.uc.edu/statistics/statbook/tables.html) to enter a z number the application will retrieve the probability from the lengthy table
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Computing Variances
For each task cell: ((Pessimistic-Optimistic)/6)2 Adjust cell address for each task
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If a error message shows up check cell addresses in the formulae first formulae must reflect intent
calculations but takes less time for the user Because PERT is a probabilistic approach, these formulae can deliver a 100% probability but no plan is perfect these are always estimates Never feel there is a 100% probability of a project completing on the estimated date
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PERT Analysis
Thoughts, Philosophy and Lessons Learned
All Plans are estimates and are only as good as the task
estimates unrealistic estimates equal unrealistic plans If the scope of a plan changes, all estimates must change adding tasks equals added time and cost PERT Analysis is a good way to what if before a project is launched helps determine if it is needed at all
What tasks will it take to do the project? What is the optimum order of the project tasks? How long will it take to do the project? How likely is the project to succeed? What if The Boss wants it earlier, what is the likelihood then?
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CPM Analysis
In comparison to PERT, CPM analysis is simple CPM Analysis is a series of easy steps
1. Develop time and cost data ("normal" and "crashed") for all tasks 2. Develop cost-per-week for crashing (crashed costs divided by time saved) 3. Develop project network (PERT) 4. Crash the activity on the critical path with the lowest cost-forcrashing 5. Recalculate the project network (the critical path might change!)
crashed. Ease up on all non-critical paths, just to the point that all paths are critical.
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CPM Analysis
A typical CPM table might have the
following structure:
Begin End Time (Crashed) Time (Normal) Activity Cost (Crashed) Cost (Normal) Time Saved Cost Increase Cost / Week
Foundation Frame
1 2
2 3
1 1
2 4
4000 8000
3000 4000
1 3
1000 4000
1000 1333
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CPM Analysis
Thoughts, Philosophy and Lessons Learned
All Plans are estimates and are only as good as the task
estimates unrealistic estimates equal unrealistic plans If the scope of a plan changes, all estimates must change adding tasks equals added time and cost CPM Analysis is a good way to what if before a project is launched helps control expectations
How How How How much will it cost? long will it take? long will it take if it needs to be done sooner? much will it cost if it needs to be done sooner?
PM Calculations Overview
PERT and CPM can be used together Calculations are based on a few simple
formulae:
PERT Derived duration estimates Standard Deviation Variance Probability of meeting expectation Crash costs and time & normal costs and time
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Project Scheduling, Ferris State, 1999 US National Performance Survey, The Standish Group, 1998 Verma, Vijay K., Managing the Project Team: The Human Aspects of Project Management, Philadelphia: PMI, 1997 Wiest, Jerome D., and Levy, Ferdinand K., A Management Guide to PERT/CPM, New Delhi: Prentice-Hall of India Private Limited, 1974
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