Statistics-III

PERT and CPM

PERT chart

PERT stands for “Program Evaluation Review Technique”. This methodology was developed by the U.S. Navy in the 1950s to manage the
Polaris submarine missile program. A similar methodology, the critical path method (CPM) was developed for project management in the
private sector at about the same time.

A PERT chart, sometimes called a PERT diagram, is a project management tool used to schedule, organize and coordinate tasks within a project.
It provides a graphical representation of a project's timeline that enables project managers to break down each individual task in the project for
analysis. The PERT chart template uses nodes -- drawn as rectangles or circles -- to represent events and milestones throughout the project. The
nodes are connected by vectors -- drawn as lines -- which represent the various tasks that need to be completed.

A PERT network chart for a seven-month project with five milestones (10 through 50) and six activities (A through F).

AR, Lecturer, Statistics Discipline, KU 1

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PERT and CPM
Construction of a PERT chart
A PERT chart presents a graphic illustration of a project as a network diagram consisting of numbered nodes linked by labeled vectors. The
direction of the arrows on the lines indicates the sequence of tasks.
When creating a PERT chart, project managers should follow the below steps:
 Define all activities involved in the project.
 Consider any dependencies between tasks.
 Draw nodes and arrows based on the information gathered in the first two steps.
 Identify the completion time for each task.
 Update the PERT chart as the project progresses.

Once the PERT chart is drawn, project managers can use it to develop a realistic time frame for the project:

 This can be done by finding the longest path, based on the estimations entered. This path should include the tasks that take the longest to
complete.
 By adding together the time it takes to complete each task, estimation will be provided for how long the entire project will take.
 Once this is done, the PERT chart can then be used to adjust the times if circumstances change or to ensure the project is finished by its
designated deadline.

AR, Lecturer, Statistics Discipline, KU 2

 Statistics-III
PERT and CPM

A PERT network chart for a seven-month project with five milestones (10 through 50) and six activities (A through F).

When to use a PERT chart

 PERT charts should be used when a project manager needs to:
 determine the project's critical path in order to guarantee all deadlines are met;

 display the various interdependencies of tasks; estimate the amount of time needed to complete the project; and
 prepare for more complex and larger projects.

Advantages of PERT charts

Project managers use PERT charts to gain these benefits:
 The PERT technique provides the ability to evaluate the time and resources necessary to a project by tracking required assets at each
stage of the process, as well as throughout the course of the project.
 PERT charts are useful in what-if analyses, helping companies understand all possible workflows and choose the most efficient and
beneficial path.

AR, Lecturer, Statistics Discipline, KU 3

 Statistics-III
PERT and CPM
 The analysis of the PERT chart includes data from various departments within an organization. Combining all of the information helps
identify each responsible team within the company, while facilitating an environment where each department takes responsibility for its
work.
 The process of creating a PERT chart also improves communication and enables an organization to invest energy in projects that will
enhance its strategic positioning.
 PERT charts make unclear deadlines more predictable, clarify dependencies between tasks and establish a clear order for completing the
tasks.

Disadvantages of PERT charts

Disadvantages of the PERT chart include the following:
 A strict focus on deadlines may not enable managers to see the full financial positioning of the project.
 PERT charts lack the flexibility to adapt to small changes that occur when confronted with a roadblock.
 If any calculations are inaccurate in the creation of the chart, delays could occur, causing bottlenecks and negatively impacting the final delivery
date.
 PERT charts are subjective; their success depends on the experience of the project manager. Consequently, some charts may include unreliable
data or unrealistic expectations for the cost and time frame of the project.
 Creating a PERT chart is labor-intensive, requiring additional time and resources. Also, in order for the chart to remain valuable, it must be
consistently reviewed and maintained.

AR, Lecturer, Statistics Discipline, KU 4

 Statistics-III
PERT and CPM
Meaning of CPM
Critical Path Method or CPM is a well-known project modeling technique in project management. It is a resource utilizing algorithm that was
developed in the 1950s by James Kelly and Morgan Walker. CPM is mainly used in projects to determine critical as well as non-critical tasks
that will help in preventing conflicts and reduce bottlenecks.

In essence, CPM is about choosing the path in a project that will help in calculating the least amount of time that is required to complete a task
with the least amount of wastage.

Use: The Critical Path Method or CPM has been used in many industries starting from defence, construction, software, aerospace, etc

Advantages of CPM
 Provides an outline for long term coordination and planning of a project
 Recognizes critical activities
 Easy to plan, schedule and control project
 It improves productivity
 Manages the resource needed
 Helps you recognize the action that needs to be performed on time so that the whole project is completed on time.
 Indicates which responsibilities can be delayed and for how long without affecting the overall project plan.
 Determines the least amount of time it will take to accomplish the project.
 Tells you the newest and latest time each activity can start on in order to manage the schedule

AR, Lecturer, Statistics Discipline, KU 5

 Statistics-III
PERT and CPM
Disadvantages of CPM
 For beginners it is difficult to understand
 Software too expensive
 Sometimes, to structure CPM is too time-consuming
 It cannot control and form the schedule of a person involved in the project
 Allocation of resources cannot be monitored properly

CPM Example and drawing steps

There are six steps in the critical path method:
1. Step 1: Specify Each Activity. ...
2. Step 2: Establish Dependencies (Activity Sequence) ...
3. Step 3: Draw the Network Diagram. ...
4. Step 4: Estimate Activity Completion Time. ...
5. Step 5: Identify the Critical Path. ...
6. Step 6: Update the Critical Path Diagram to Show Progress.

AR, Lecturer, Statistics Discipline, KU 6

 Statistics-III
PERT and CPM
PERT VS CPM

Basis for comparison PERT CPM

Meaning PERT is a project management technique, used to CPM is a statistical technique of project management
manage uncertain activities of a project. that manages well defined activities of a project
What is it? A technique of planning and control of time. A method to control cost and time.
Orientation Event-oriented Activity-oriented
Evolution Evolved as Research & Development project Evolved as construction project
Model Probabilistic model Deterministic model
Focus on Time Time-cost trade-off
Estimate Three time estimate One time estimate
Appropriate for High precision time estimate Reasonable time estimate

Management of Unpredictable Activities Predictable activities

Nature of jobs Non-repetitive nature repetitive nature

Critical and Non-critical No differentiation differentiated

activities
Suitable for Research and Development Project Non-research projects like civil construction, ship
building etc.
Crashing concept Not applicable Applicable

AR, Lecturer, Statistics Discipline, KU 7