after completing this chaps, ° ° ° ° ° o o Demonstrate how to schedule Projects involving resource limitations. ° ° ° ° ° ° er, the students will able to: Give the general description of CPI i Construct a network diagram, i Describe the purposes and adv, ; > antages of CPM/PERT, List the steps in the CPM/PERT Procedure, ; Determine the earliest Start and latest start times. Compute slacks on activities and on events, Describe the issue of resource allocation and how it is handled. ic times and probabilistic times. Construct Gantt Chart. Describe activity crashing and solve simple problems. Suggest ways to manage the reduction of project time. Apply PERT and CPM to business operations. Guapter Outline 7.1 Basic Concepts 72 Critical Path Method i 73 Program/Project Evaluation and Review Technique 74 Gantt Chart 75 Considering Time-Cost Trade-Offs . the sources of invention which are, Nothing is mova important then i 4 shan ta oialns tastabes in my opinion more ¢ efeled Wilhelm feibniz: (1646-1716)Jn many situations, Baa je ak eget at cnt ae FSpiduals. Usually these psy bear in mind al Tesponsible for planning, scheduling and controlling rent tasks handled by a variety of departments and i the jects are complex that the decision maker cannot pogomiproiest In such situation the Pertaining to the plan, schedule, and progress of the information valuation and Review Techn Critical Path Method (CPM) and Program/Project 1 : Ba disadvantages of PERT, CPM as a he an important role. There are some advantages lected below: advantages ‘The chart clearly shows and structure elements, Provides identification of the Provides identification of early start, late Provides visible dependencies between the Work Breakdown ee 3 amount of project data can be organized and presented in diagram for decision pisadvantages 1, There can be potentially large number of activities and individual dependency relationships. 2 The network charts tend to be large, which would need a special size paper to print. 3, The insufficiency of a timeframe on most CPM/PERT charts makes it harder to show the real status. 4, CPM/PERT charts tend to be unmanageable especially in alarge scale networks. ‘The Critical Path Method (CPM) is a network-based project scheduling procedure. It is used primarily for industrial projects for which activity times generally were known. It was developed | by James E. Kelly of Remington Rand and Morgan R. Walker of Du Pont in 1957 to aid in steduling maintenance shutdown of chemical processing plants. The Critical Path isthe longest path through a CPM/PERT network. The critical path is composed of activities with zero slack lime. Critical Path Activities are activities in a CPM/PERT network that are on the critical path and consequently have zero slack time. The CPM/PERT is the actual performance of a task which consumes time and requires resources (such as labor, materials, space, machinery and the like). It an be understood as representing the time, effort, and resources required to move from ee ‘vent to another. A CPM/PERT activity cannot be performed until the predecessor event has ‘curred. Acivities that must be completed jmmediately prior to the start of the activity in question are ivities ity slacks is the time that starts the activity can be delayed Aled Immediate Pr eocetmargiin time, in other words itis the amount of time that a task ‘out exceeding the sri yi vithout causing a delay. It is also known as Float Activity. a Project can eas resin a CPMIPERT network the forward pass andthe backward There are two main proce moving forward through the project network to determine the Rss. Forward Pass involves Page 259 apter 7: Project Managementthe Bac! earliest i ity, while start and earliest finish time for each activity, while ‘start and latest backward through the network to determine the latest activity. Let us examine the example below to illustrate the sol ution set of @ 1 dead he Metastatic an finish time for "Sy CPM. | sq] gf thletic complex On campys, a Example: The Sofia Academy is considering building @ new ® vi iniphoc frouldipoovideia ree pach for intef-school sports ele tLe space, classrooms, and intramural facilites. The following activities Te before construction starts. Activity Description Immediate Predecessor Time (weeks) A Survey building site ©; 8 B_ | Develop initial design a 10 C | Obtain board approval 5 D [Select architect E | Establish budget f F _ | Finalize design a & G | Obtain financing ae H Hire contractor z a. Draw a project network. b. Identify the critical path. c. Develop the activity schedule for the project. ‘ d_ Determine the expected completion time of the project. Solution: Beep 7: Determine the list of activites, its immediate predecessors, and approximate time, which is already provided in the problem. Activity Description Tmmediate Predecessor | Time (weeks) ‘A__| Survey building site ~ 6 B__| Develop initial design - 8 C | Obtain board approval AB 10 D__| Select architect c 5 E__| Establish budget c 6 F , | Finalize design DE 14 G | Obtain financing E B H__| Hire contractor EG Zz Beep 2: Develop the project network. (See Figure 71) Figure 7.1 Page 260 Chapter 7: Project Managem=™*Fan activity forheea ; t= activity time ee The carlest finish time for any activity, then is EF ES+t (See Figure 73) Figure 73 ' 2 7 hp & Compute for the earliest start time and earliest finish time using the forward pass. (See Figure 7.4) Figure 7.4 Ere D é en 17 Stat |. . fell E a] 3 : ¢ @ in 6 weeks and B for 8 weeks. We will select 8 ik ill be completed in 6 weeks an } e Notice that activity ee ine of activity © (or whichever i Righer {nthe previous woeks as the earliest 4°" mediate predecessor). We need to select the highest time Activites wich affect re rr must be al be finshed before we can str with the next Period because all activ’ the activities as reflected in Figure 7.5. one, Continue the solution forall of Page 261 ter 7: Project ManagementFigure 7.5 0 backward pass. {rep 6: Develop the latest start time and latest finish time using the Let LS = latest start time for an activity LF = latest finish time for an activity t=activity time 5 ‘The latest start time for any activity, then is LS = LF —! (Gee Figuee 78 Figure 7.6 EF value to LF Copy |] Gtis only being done in the last activity.) 7: Compute for the latest finish time and latest start time, as shown in Figure 7.7." pu Figure 7.7 alee] Dla |s é[2fe 5 [9 [24 c[e |e aie F [m3 io] @ [28] 16 | 28 [38 elols E [| H[28[S opuyy 3) [58 Notice that 38 were allocated to activity F and G as the latest finish using the backwar! pass, and then compute for the latest finish time of the said activities. Observe that activities F and G have 24 and 25 weeks res} tol 2 pectively. We will select 24 the latest finish time of activity E because it has the least value. Co tinue to solve for! lafest finish time and latest start time of the remaining activities. Page 262 Chapter 7: Project. manageivity is equal to the lar finish © gest of the earliest Fs. And, the latest finish time for an activity is the a |) formula below: ) Slack=LS—ES=LF~ER rs [1s EF | LF | Slack | Critical Path_| | Table 7.1: Activis : + Activity Schedule for Sofia Academy [of eect oes No afer ne Yes 18 1 | 18 Yes wave o ee No Spey aea teh ae Yes 4 2.) 38 | 38 Yes a 25 37 | 38 No Bi 33 | 5 | as Yes lon ocoHnce Thus, the critical path is the activities with bold lines as shown in Figure 7.8. Figure 7.8 o 2 Critical Path: B-> C9 ESF 9H Start efefs Fla[= mia ]a sae 8 Fe BIE z zfels IE 7 ee? EE Tied: toe cote path 4 > CEST 4H wth @ works tn fishy the project. This would mean that activities B, C, EF and H are the critical activities and should be done actording to schedule or else it will cause a delay in the project. On the other hand, activity A can be extended for another 2 weeks, activity D for 1 week and activity G for 1 week because they have slack time of 2, 1, and 1, respectively. # Enrichment Exercise 7.2 promoter of championshij e __heboxing match can held (al e Construct the project network. Determine the critical path. ‘ ‘\CFind the completion time ‘ the project __. = Bee iy SR Ch Tah ye ar ae Page 263 t _ ipter7: Project Management must perform the task shown in the table before ip boxing match 1 durations are in days).“Retivity Descliption | Immediate A [Find site = B_|Find engineers A c Hire announcer and referee A D__[Look for sponsorships A E [Set TV and radio ads D F [Set up ticket agents “BED , [ S [Pantadvertisng [CF H [Set up transportation F T Last minute details H Program/Project Evaluation and Review Technique (PERT) is a network technique, designe, for project planning and scheduling that uses probabilistic activity times. It is used to hand uncertain activity times. The PERT was developed under the sponsorship of the US. Navy Special Projects Office in 1958 as a tool for scheduling and controlling the Polaris missile project Stochastic PERT is a project scheduling technique in which the activity times are of probabilistic nature, while Deterministic PERT is a project scheduling technique in which the activity time are asstimed to be known with certainty. Expected Time is the average activity time and Beta Distribution is a probability distribution used to describe activity times. Three Estimates of the Activity Time 1. Optimistic Time is a PERT activity time estimate based on the assumption that it would take the shortest possible time to complete an activity if everything went right. 2. Most Probable time is a PERT activity time estimate based on the assumption that the time would occur most frequently if the activity is repeated many times. 3. Pessimistic Time is a PERT activity time estimate based on the assumption that it would take the longest possible time to complete an activity if everything went wrong. Mean and Variance of Beta Distribution _a+d4m+b . (ey ay 5 where: t = estimate of expected activity time a= optimistic time m= most probable time s b= pessimistic time o? = variance t To understand on how the PERT is being implemented let us examine the next example. | Page 264 Chapter 7: Project Managemet| Test method tb aw jest method 1 for “ Test method 2 for ieee ote Select ie best method and # 8 | 10 | 18 | Complete intial preparation Ercceny. ap |a|s|6 | Train personne! Of Production facilities | to Fa | 18 Develop final pro, D fies | | Run tests on the rei oe D 1) 3 |a | Adjust the production method ce Valo) | 1 | Setup complete production system Bes as Run final tests F ip 4 HI 2 sa8e ‘ Jop a project netw ° figneg Ue Nae kerholatineen determine the expected project completion time. F A Project completion time will meet the 30-week deadline? Andie Navy solution: ect, fi 1s Compute for the expected times and variances, ae Expected Tirhes: : time tO) 228.95 8 144(3)+11 _ 24 6 2 6 6 8+400)+18 _ 66.1, tA 43 6 6 Ter Pe S46) +6 905 ty = AM@#3 12 _ 6 6 6 6 ne 10+4(2)+14_72_1 4 -3t4@45 24, | CF Re ere oe e i alt4@)+3_12_, 144(2)43 _12_, ray ede 36 6 6 Variances: i ; @ ut 04? = (4232) =267? =7.:13 of (3) =167? =2.78 6 fe ai(aaty soa 9, =1.67? =2.78 6! -() = 0.33" =0.11 y 321) Loss 2011 °, 2 =(S4) =033? =0.11 a 33 = 0. : ; 5-3) 2_(5= a o -(4 oy -067" = 0.44 ° ~(22) 039 =0.11 ; f 3-1) 2 -(321)’ B — E with 17 days to finish the project. tsp 6: Determine each activity that can be crashed and the crashing process costs. We must identify the following information: 1. Estimated activity cost in normal or expected activity time. 2. Estimated time to complete the activity under maximun crashing. 3. Estimated activity cost under maximum crashing. Let Ei = expected time for activity i. E/ = time for activity i under maximum crashing. Mi= maximum possible reduction in the time for activity i due to crashing. Mi=Ei-E and Let C= estimated cost per activity i under the normal or expected activity tim Page 274 ‘age Chapter 7: Project ManagemeC= estimated Ki~ crashing Cost for activi cost for each activity. k -SG, ity i under the maximum crashing. 3, Compute for maximum possi wo Ctnum Possible reduction in time (Mi) andl crash cost (Ki). Maximum Possibie reduction in Time: Maw Ea-En’=9-445 days Ms~ Es Es’ =5—3=2 days Cy'-Cp _ 1150-900 =125 mal and Crash Activity for Car Maintenance Services Project Table 7.5: Not Activity Time (days) Total Cost Maximum Reduction | Crash Cost Normal | Crash_| Normal (C) | Crash (C\) inTime(Mi) _| per Day (K) A 9 4 P1,500 2,000 5 Pi00 Be 5 P1,000 P1,400 2 P200 c 8 4 P1,600 P2,200 4 P150 D 4 2 P 900 P1,150 2 PLDs E 3 1 P_ 800 P1,300 2 P250 5,800 8,050 Recall that the critical p* minimize the time to 15 A. js ivity A wo Selecting, ey, er New Cost = 5 for the project woul! ath i days. We nee yuld lead to a 5 A> B-+ E, these are activities that we can crash in order to ‘d to select the lowest crash cost of P100 for activity dditional costs of P100 per day, thus the new cost 00 + 100(2) = 5,800 + 200 = P6,000.