CPM/PERT

In 1956, a research team at E. I. du Pont de Nemours & Company, Inc., initiated a

project to develop a computerized system to improve the planning, scheduling,
and reporting of the company’s engineering programs (including plant
maintenance and construction projects). The resulting network approach is
known as the critical path method (CPM).

At the same time, the U.S. Navy established a research team. They developed a
similar network approach for the design of a management control system for the
development of the Polaris Missile Project (a ballistic missile-firing nuclear
submarine). This network scheduling technique was named the program
evaluation and review technique, or PERT.

Both CPM and PERT are derivatives of the Gantt chart and, as a result, are very
similar.

There were originally two primary differences between CPM and PERT.

With CPM a single estimate for activity time was used that did not allow for any
variation in activity times—activity times were treated as if they were known for
certain, or “deterministic.”
With PERT, multiple time estimates were used for each activity that allowed for
variation in activity times—activity times were treated as “probabilistic.”

However, over time CPM and PERT have been effectively merged into a single
technique conventionally referred to as CPM/PERT. The advantage of CPM/PERT
over the Gantt chart is in the use of a network to depict the precedence
relationships between activities. The Gantt chart does not clearly show
precedence relationships, which is a disadvantage that limited its use to small
projects.
THE PROJECT NETWORK
A project network is one of the most critical pieces of information that a project
manager needs in order to correctly plan and conduct a project.

A CPM/PERT network consist of branches and nodes.

When CPM and PERT were first developed, they employed different conventions
for constructing a network.

There are two project networks, the Activity on Arrow(AOA) and the Activity on
Node (AON). However, for our purposes the AON network has one distinct
advantage—it is the convention used in the popular Microsoft Project software
package, and because we want to demonstrate how to use this software, we will
use the AON convention in this chapter.

With PERT the opposite convention was taken. The branches represented the
activities and the nodes in between them reflected events, or points in time such
as the end of one activity and the beginning of another. In this approach, referred
to as activity-on-arrow (AOA), the activities are normally identified by the node
numbers at the start and end of an activity. A dummy activity is inserted into the
network to show a precedence relationship, but it does not represent any actual
passage of time. Dummy is two or more activities cannot share the same start and
end nodes.

With CPM the nodes, or circles, represented the project activities. The arrows in
between the nodes indicated the precedence relationships between activities.
Activity 1, represented by node 1, precedes activity 2, and 2 precedes 3. This
approach to network construction is called activity-on-node (AON). In here there
is no dummy activity; dummy activities are not required in an AON network since
two activities will never be confused because they have the same start and end
nodes.
Activity Scheduling, Activity Slack, Critical Path

 A is the activity, B is the time/ expected activity duration.

 ES is the earliest time the activity can start, EF is the Earliest finish Time.
 LS is the latest start time and LF is the latest finish time without extending
the minimum completion time of the project.

So let’s start with a sketch to make a full network.

 Activity A and B have no predecessors so they begin at start. Activity C
needs A to be completed before it can start. D needs A & B completed
before it can start. E needs D, F needs both C & E completed and G needs E.
 Since F & G has no successors it goes to finish.

So here is the network with the activity nodes, displaying the letters and times.
Let’s do the forward slash. Forward slashs starts at the beginning of a network to
determine the earliest activity times.

EF=ES+t
 A has no predecessor so its earliest start time is 0 right away. Since it has 7
weeks to be completed, its earliest finish time will be 0+7=7.
 B also has an earliest start time of 0, with time of 9 so it will have an earliest
finish time of 9.
 Now C needs A to be completed before it can start. Since the earliest finish
time for A is 7 then the earliest time C can start is 7. With activity time of 12
weeks, so C will have an earliest finish time of 7+12=19.
 D needs A & B before it can start. Since there are two earliest finish time,
The highest finish time will be used. So the earliest start time of D is 9.
9+8=17.
 E has only one predecessor D, so it can start at 17 and finish earliest at 26.
 F has C and E, since the highest finish time was 26 it will be the earliest start
time of F. 26+6= 32
 G can start at 26 and finish at 31.
 Although G is the last letter, it does not have the highest earliest finish
time. So we say the project’s completion time is 32 weeks.
 Now let’s do the backward pass. It determines the latest activity times by
starting at the end of a CPM/PERT network and working forward.

LS= LF-t
 For G the latest start time will be 32-5= 27. For F will be 32-6=26.
 E has F & G,As a result E needs to finish at 26 in order for f to start, so
when doing backward pass the lowest/minimum start time will be the
latest start time of the successor. So E will be 26-9=17.
 D has only E, so the latest finish time of D will be 17-8=9.
 C will have 26-12=14
 A has C & D. 9 is the minimum start time so 9-7=2.
 B has D so the latest finish time is 9-9=0.

The backward pass is now complete. So Now Slack for an activity is defined as
how long the activity can be delayed without extending or increasing the project
completion time. And is calculated as :

LS-ES or LF-EF

 So the slack for A will be 2-0 or 9-7 which will be 2.

 Slack for B will be 0, for C=7, for D=0, for E=0, For F=0 and For G=1.

Note, for example, the activity C can begin anytime between 7 weeks and 14 and
it can finish between anytime at 19 & 26.
Thus C can be delayed for up to 7 weeks and the project will still be completed in
32 weeks.

Activity B,D,E & F on the other hand cannot be delayed at all without extending
the project’s completion time.
So for example if D is delayed by 2 weeks then the project completion time will be
extended by 2 weeks as well so it will become 34 weeks.
The activities with 0 slack are called the Critical Activities. And they form the
critical path which is the longest path in the network. So the critical path here is
B-D-E-F.
CPM/PERT ANALYSIS WITH OM TOOLS
The “Project Management” module in OM Tools has the capability to develop
both single-time estimate and three-time estimate networks.

PROBABILISTIC TIME ESTIMATES

We will be calculating expected times and variances for uncertain activity times
and also the probabilities of completing a project at specified times.

Here we have a table showing activity predecessors and their uncertain time
estimates. The three time estimates for each activity is optimistic time (a), most
likely time(m) and pessimistic time (b).

To calculate the expected time (t) we apply the formula :_________

So the expected time for A is 7.

We do the same for Activity B,C,D,E,F and G.
And using these expected activity times and predecessors, we completed the
project network earlier.

The critical path is BDEF and the project completion time is 32 weeks.
Note that the project completion time can also be found by adding up the
expected activity times for the critical activities.

Now, the formula for calculating the variance for each activity is :__________

Just like the project completion time, the project variance is also found by adding
up the variances for critical activities.

Thus, for B the variance is 2.7778. For D is 1.7778, For E is 2.7778 and For F the
variance is 1.

And adding these, we have the project variance of 8.3333. Then taking the square
root we have the project standard deviation of 2.8867.

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Although the uncertain time etimates are beta distributed, we can approximate
the project completion time by a normal distribution.

In this case, with mean equals 32 and standard deviation us 2.8867

So we can apply the z formula to answer these questions.

( To determine the probability that a project will be completed.)

a) in less than 35 weeks
b) in more than 31 weeks
c) between 31 and 35 weeks
d) in less than 31 or more than 35 weeks

First,we find the probability that the project will be completed within 35 weeks.
That is, x=35 and that gives z=1.04.
And looking up in tables we have a less-than area of 0.8508.

For x greater than 31, we have z greater than -0.35. The area less than -0.35 is
0.3632.
And subtracting it from 1 we obtain the more than area of 0.6368.

Between 31 and 35, we find the area between their z values of -0.35 and 1.04 by
subtracting the larger area from the smaller are which is 0.8508-0.3632 = 0.4876.

For d), less than 31 or more than 35 is the completement of our result in c).
So we just subtract the result from 1 to obtain 0.5124.