CONTROL OF OPERATIONS

Critical path method (CPM) AND

Project Evaluation and Review
Technique (PERT) Method
 CRITICAL PATH METHOD
• First used about 1959 by DuPont to control
the major overhaul of a neoprene plant.
Gains: savings of about $1 million
 • Developed in 1950’s

History •
•
CPM by DuPont for chemical plants
PERT by U.S. Navy for Polaris missile

CPM was developed by Du Pont and the emphasis was on

the trade-off between the cost of the project and its
overall completion time (e.g. for certain activities it may
be possible to decrease their completion times by
spending more money - how does this affect the overall
completion time of the project?)

PERT was developed by the US Navy for the planning and

control of the Polaris missile program and the emphasis was
on completing the program in the shortest possible time. In
addition PERT had the ability to cope with uncertain activity
completion times (e.g. for a particular activity the most likely
completion time is 4 weeks but it could be anywhere between
3 weeks and 8 weeks).
 CRITICAL PATH METHOD
• All project management techniques compute what
is called a critical path. Since a project consists of an
ordered set of independent activities, it can be
represented as network.
• A path through the network is any set of successive
activities, which goes from the beginning to the end
of the project associated with each activity in the
network is a single number that best estimates the
time that activity will consume.

4
When embarking on a project, one has to keep the
following objectives in mind
1. Determine the shortest possible time in which a
project can be completed
2. Find a suitable time-cost trade-off i.e strike a
balance between higher operating cost of rapid
completion methods and the longer time of normal
methods
3. Leveling of resources for example utilizing a constant
number of men on a project rather than reassigning
personnel or other necessary resources.
4. Find the best scheduling procedure when
insufficient resources and facilities limit the number
of jobs that can be done
• The CPM and PERT are used to find the
shortest possible time in which a project can
be completed.
• The CPM is a deterministic method, in that the
estimated completion times for individual
components are assumed to be definitely
known.
• The PERT method provides for the use and
combining of estimated completion times of
components parts wherein the time estimates
contain a probable amount of error or
variance.
 ADVANTAGES OF CRITICAL PATH
PLANNING
• It is a logical method for setting down and organizing
a plan of action.
• It facilitates additional breakdown of activities into
smaller activities.
• It permits fuller utilization of individual capacities for
planning and organization.
• It points out those activities which are in the critical
path, those whose delay would result in delay of
completion of the entire project.
• Critical path planning can help to point out where
best efforts will be most rewarding.
 Description
• In the CPM, the individual activities that make
up a total project are represented as a
network of arrows.
• There are some activities that can be done
concurrently , hence parallel paths appear in
the arrow diagram.
• For the entire projects, the series of
consecutive activities which requires the
longest time and therefore determines the
completion date is referred to as the CRITICAL
PATH
 The Project Network

• Use of nodes and arrows

Arrows An arrow leads from tail to head

directionally
– Indicate ACTIVITY, a time consuming effort that is
required to perform a part of the work.

Nodes A node is represented by a circle

- Indicate EVENT, a point in time where one or
more activities start and/or finish.
 ARROW DIAGRAMS
• There are two types
Activity-on-node diagram
Activity-on-arrow diagram
This method of representation is fast and readily
shows the relationship between major stages of
project , thus can be recommended for initial
planning stages. The arrows merely show
direction, thereby indicating sequences. Each
node contain a description of the activity that is to
be performed.
• Here the arrow starts and end at numbered
circles. The circles are referred to as events.
• The direction of the arrow designates at which
number the activity begins and at which event
number the activity ends
 USING DUMMY ARROWS IN ACTIVITY ON
ARROW DIAGRAM
• The defect in the above diagram is remedied by using
dummy arrows (dummy activities), so that one
activity is represented by a particular pair of
numbers. See figure below
• In the activity-on-arrow diagram, the time required
to perform the activity is allocated to the arrow.
• The events are instantaneous and require no time.
• An event is said to occur when all activities that lead
into the event circle have been completed.
• Only after completion of all entering activities can
any of the one or more leaving activities be started.
• This means that some activities must be completed
before beginning other ones.
• An activity is designated by two numbers and
is said to start at i and end at j.
• The same i and j values designate two events.
• Events are designated by a single number.
• Both the earliest and latest times at which
events can occur without disturbing the
starting and finishing times of the entire
network are calculated. if these coincide for a
particular event, that event is on the critical
path.
 EXAMPLE
An oil producing company desires to Install a
• small water injection plant. The first planning
for the installation of a water injection plant.
CALCULATION OF EARLIEST START VALUES

i
CALCULATION OF LATEST FINISH
VALUES
 PERT
• Activity duration times cannot always be estimated
precisely. Sources of uncertainty include weather,
uncertain delivery of supplies, equipment failure,
lack of knowledge concerning procedures and
methods to be used, etc
• PERT method consist of making estimates from
which the expected duration times as well as their
variance can be obtained.
• Adding the expected duration times for individual
activities along a path gives the expected time for
completion of the path.
• Adding their variances give the TOTAL
VARIANCE
• The combined variance of a path corresponds
to a normal distribution.
• Use of the normal distribution offers a way to
calculate the probability of achieving various
completion dates.
• Three time estimates are used in the PERT
method. The time estimates are
• OPTIMISTIC (L): An estimate of the minimum
time required for completing an activity if
there is unusually good luck and all goes well
without any trouble.
• MOST LIKELY (M): An estimate of the normal
duration time, which would be repeated most
often if a large number of trials were made.
• PESSIMISTIC (H): An estimate of the maximum
time an activity will require for its completion
if an unusually bad luck is encountered.
 EXAMPLE
• The PERT time estimates for a project is shown
below: using the data in the table,
a) Calculate the duration time (TE) for each activity
b) Calculate the variance for each activity
c) Draw an activity-on-arrow diagram of the project
showing the expected duration time (TE) on each
arrow
d) Calculate both the expected time for completion
and the total variance for the critical path
e) Calculate both the expected time for completion
and the total variance for the near critical path.
f) Calculate the probability of completing the project 1
week before the expected completion time and the
probability of completing the project prior to the
end of 1 week after the estimated completion date
for (i) the critical path (ii) the near critical path
• (b) To install a water injection plant in an oil company’s field, decision to
start will be made. This will take 0 day. Pumps to be used will be ordered
and the concrete foundations can be poured and given time to harden
while waiting for the pumps to arrive. The procurement of the pump will
take 15 days while the pouring and hardening of the foundation will take
20 days. Both of these activities can be done concurrently.
• On arrival of the machinery (pumps), they can then be installed. This will
take 10 days. When this is done, a building can be built over the pumps
and testing of the machinery can proceed concurrently, which would
complete the project. Testing of the machinery will take 5 days and the
erection of the building will take 10 days.
• (i) Show the above information (activities and duration times) in an
activity on arrow diagram with dummy arrows. (2 marks)
• (ii) Calculate the earlier start times of all the activities. (4.5 marks)
• (iii) Then, calculate the latest finish times of all the activities. (4.5
marks)