Distinction Between PERT and CPM:

Both PERT and CPM are managerial techniques for planning and control of large complex
projects. Both are techniques of network analysis wherein a network is prepared to analyze
interrelationships between different activities of a project. PERT and CPM are very similar in
their approach. However there are several distinctions between the two techniques

1. PERT is a probabilistic model with uncertainty in activity duration. Multiple time estimates
are made to calculate the probability of completing the project within scheduled time. On the
contrary, CPM is a deterministic model with well-known activity (single) times based upon past
experience. It therefore, does not deal with uncertainty in project duration.

2. CPM is used for repetitive jobs like planning the construction of a house. On the other hand,
PERT is used for non-repetitive jobs like planning the assembly of the space platform.

3. PERT analysis does not usually consider costs in a direct manner. But CPM directly deals with
cost of project schedule and their minimization. The concept of crashing is applied to CPM
models. Thus, CPM is more explicit about cost-time relationship. In CPM network cost is
assigned to each activity.

4. PERT incorporates statistical analysis and thereby enables the determination of probabilities
concerning the time by which each activity and the entire project would be completed. On the
other hand, CPM does not incorporate statistical analysis in determining time estimates because
time is precise and known.

5. PERT serves a useful control device as it assists the management in controlling a project by
calling attention through constant review to such delays in activities which might lead to a delay
in the project completion date. But it is difficult to use CPM as a controlling device for the
simple reason that one must repeat the entire evaluation of the project each time the changes are
introduced into the network.

6. PERT is applied mainly for planning and scheduling research programs. On the other hand,
CPM is employed in construction and business problems.

Extensions of both PERT and CPM allow the user to manage other resources in addition to time
and money, to trade off resources, to analyze different types of schedules and to balance th use of
resources.

Rules for Network Construction:

The rules to be observed in constructing the network diagram are discussed below:
1. Each activity must have a preceding and a succeeding event. An activity is numerically
denoted by the pair of pair of preceding and succeeding events. In the dinner project, for
example, the activity ‘send invitations’ is designed as (1-2).

Send invitations 2

1 Receive guests

4
Prepare dinner 3
Take dinner

2. Each event should have a distinct number. The number given to an event can be chosen in any
way, provided this condition is satisfied. In practice, however, events are so numbered that the
number at the head of the arrow is greater that at its tail.

3. There should be no loops in the project network. A situation like the one shown below is not
permissible.

3 2

4. Not more than one activity can have the same preceding and succeeding events. This means
that each activity is represented by a uniquely numbered arrow and a situation like the one shown
below is not permissible.

1 2

To ensure each activity is uniquely numbered it may be necessary sometimes to introduce

dummy activities. A dummy activity is an imaginary activity which can be accomplished in zero
time and which does not consume resources. It is represented by a dashed arrow.
Formulation: The Basic Inputs to PERT/ CPM:
Some basic steps are followed in PER and CPM formulation. And here, we will consider
imaginary project (Moose lake Project).

Step 1: Analysis of the Project: After consultation with all departments heads a list of activities
is agreed on. Each activity is clearly defined and responsibility is assigned to the proper
department heads.

Step 2: Sequence the Activities: Once the content of each activity is defined, the sequence of
execution is determined. For example, personnel cannot be hired before proper authorization is
granted and equipment cannot be assembled before all parts and materials are on site.

Activit Description Duration Preceding Activities

y
A Administrative srt up 3 None
B Hire personnel 4 a
C Obtain material 4 a
D Transport material 2 c
E Gathering measuring team 4 a
f Planning 6 c
G Plan evaluation 1 e
H Oxygenation 8 f, g
i Measurement and evaluation 2 I, h

Step 3: Estimate Activity Times and Costs: The next step is to determine the required duration
(elapsed time) for each activity. In CPM the activity duration is considered to be deterministic
(certain). This assumption occurs when there is a wealth of experience regarding activity times.
In PERT, we assume that the duration is unknown, so we use three estimates with an averaging
procedure.

Step 4: Construct the Network: The PERT (or CPM) network is a graphical representation of
information. It shows the interrelationship among the activities, the events and the entire project.
To construct a PERT network, start by viewing an activity as an arrow (arc) between two events
(circle).
Administrative Setup

1 2

Step 5: Event Analysis: Event-oriented analysis is used primarily in PERT because it is

especially convenient for risk analysis involving probabilities of completion. The following
procedure is used in event analysis:
 a) Enter time estimates on the network.
b) Compute the earliest and latest dates for all events.
c) Find the slack on the events and identify critical events.
d) Find the slack on the activities and identify critical activities.
e) Find the critical path.

Step 6: Activity Analysis: The previous method identified the critical event computing their
earliest and latest times. From this information, we derived the critical path, critical activities and
the slack. The following method can be used as an alternative for arriving at the same result.
Computing earliest start time (ES) and earliest finish time (EF) and it is called forward pass.
Once all ESs and EFs are computed, we start by setting the latest finish time (LF) of all final
activities. Then we sequentially compute the resulting LSs, then the resulting LFs and so on until
the beginning node is reached.

Step 7: Monitoring and Control: Sometimes some activities require more time and some
activities are started at delay. In this case proper monitoring is needed. In addition to transferring
resources to critical activities, management can correct delays by some other actions such as:
changing the sequencing of activities, pouring additional resources into the project, expediting
activities by various incentives.

Step 8: Resource Utilization: The regular PERT/CPM analysis is limited to planning the
elapsed time. Because the planning is done prior to actual project execution. It is not always
possible to know the precise resource availability. So, we assume that there are sufficient
resources for executing the activities as planned.