Network Models

CPM & PERT

Introduction
• Program Evaluation and Review Technique (PERT) and the Critical Path
Method (CPM) can be used to plan, schedule and control a wide variety
of projects:
1. Research and development of new products and processes
2. Construction of plants, buildings and highways
3. Maintenance of large and complex equipment
4. Design and installation of new system
• Objective of the project managers must schedule and coordinate the
various jobs or activities so that the entire project is completed on time.
• A complicating factor in carrying out this task is the interdependence of
the activities.

Introduction
• Projects may have as many as several thousand activities
project managers look for procedures that will help them
answer questions such as the following:
• 1. What is the total time to complete the project?
• 2. What are the scheduled start and finished dates for each
specific activity?
• 3. Which activities are “critical” and must be completed exactly
as scheduled to keep the project on schedule?
• 4. How long can “noncritical” activities be delayed before they
cause an increase in the total project completion time?
• PERT and CPM can help answer these questions.

Introduction
• Many activities associated with this project had never been
attempted previously, so PERT was developed to handle
uncertain activity times.
• CPM was developed primarily for industrial projects for which
activity times were known.
• CPM offered the option of reducing activity times by adding
more workers and/or resources, usually at an increased cost.
• A distinguishing feature of CPM was that it identified trade
offs between time and cost for various project activities.

immediate predecessor and activity time for the Western Hill Shopping centre expansion project is given in Table 1. The project is expected to provide room for 8 to 10 new businesses. Let us show how PERT/CPM can help. activity description. The list of activities.Project Scheduling with Known Activity Time • The owner of the Western Hills Shopping Centre is planning to modernizing and expand the current 32-business shopping centre complex. . Financing has been arranged through a private investor. All that remains is for the owner of the shopping centre to plan schedule and complete the expansion project.

C 12 I Tenants move in G.Project Scheduling with Known Activity Time Table 1. H 2 Total 51 . List of activities for Western Hills Shopping Centre Project Activity Immediate Activity Activity Description Predecessor Time A Prepare architectural drawings 5 B Identify potential new tenants 6 C Develop prospectus for tenants A 4 D Select contractor A 3 E Prepare building permits A 1 F Obtain approval for building permits E 4 G Perform construction D. F 14 H Finalize contracts with tenants B.

Project Scheduling with Known Activity Time • Using information from table 1. • Activities correspond to the nodes of the network and the arcs show the precedence relationships among the activities. . construct a graphical representation of the project called project network. • Upper left hand corner of each node contains corresponding activity letter and activity time appears immediately bellow the letter. • A path is a sequence of connected nodes that leads from the Start node to the finish node.

• Longest path is the critical path and activities on the critical path are refereed to as the critical activities for the project. the entire project will be delayed.Project Scheduling with Known Activity Time • All paths in the network must be traversed in order to complete the project. . • If activities on the longest path are delayed. • Path that requires most time is the longest path to complete the project.

Project Scheduling with Known Activity Time • • • • ES = earliest start time for an activity EF = earliest finish time for an activity t = activity time EF = ES + t Earliest start Earliest finish time time A 5 0 5 .

Earliest Start and Earliest Finish Time A 5 Start 0 5 .

Earliest Start and Earliest Finish Time A 5 0 5 B 6 0 Start 6 .

Earliest Start and Earliest Finish Time A 5 0 5 C 4 Start B 6 0 6 5 9 .

Earliest Start and Earliest Finish Time A 5 0 5 Start B 6 0 6 D 3 5 8 C 4 5 9 .

Earliest Start and Earliest Finish Time A 5 0 5 Start B 6 0 6 E 1 5 6 D 3 5 8 C 4 5 9 .

Earliest Start and Earliest Finish Time A 5 0 5 Start B 6 0 6 E 1 5 6 D 3 5 8 C 4 5 9 F 4 6 10 .

Earliest Start and Earliest Finish Time A 5 0 5 Start B 6 0 6 E 1 5 6 F 4 6 10 D 3 5 8 G 10 24 14 C 4 5 9 .

Earliest Start and Earliest Finish Time A 5 0 5 Start B 6 0 6 E 1 5 6 F 4 6 10 D 3 5 8 G 10 24 14 C 4 5 9 H 9 12 21 .

Earliest Start and Earliest Finish Time A 5 0 5 Start B 6 0 6 E 1 5 6 F 4 6 10 D 3 5 8 G 10 24 14 C 4 5 9 H 9 12 21 I 24 26 2 Finish .

t I 24 26 2 24 26 Latest start time Latest finish time .Project Scheduling with Known Activity Time • Continuing the forward pass through the network. The project can be completed in 26 weeks. the earliest start times and earliest finish times for all activities in the network is established. • LS = latest start time for an activity • LF = latest finish time for an activity • t = activity time • LS = LF .

Latest Start and Latest Finish Time A 5 0 5 Start B 6 0 6 E 1 5 6 F 4 6 10 D 3 5 8 G 10 24 14 C 4 5 9 H 9 12 21 I 24 26 2 24 26 Finish .

Latest Start and Latest Finish Time A 5 0 0 5 5 Start B 6 0 6 E 1 5 6 F 4 6 10 D 3 5 8 G 10 24 14 10 24 C 4 5 9 H 9 21 12 12 24 I 24 26 2 24 26 Finish .

Latest Start and Latest Finish Time A 5 0 5 Start B 6 0 6 6 12 E 1 5 6 F 4 6 10 6 10 D 3 5 8 7 10 G 10 24 14 10 24 C 4 5 9 8 12 H 9 21 12 12 24 I 24 26 2 24 26 Finish .

Latest Start and Latest Finish Time A 5 0 0 5 5 Start B 6 0 6 6 12 E 1 5 5 6 6 F 4 6 10 6 10 D 3 5 8 7 10 G 10 24 14 10 24 C 4 5 9 8 12 H 9 21 12 12 24 I 24 26 2 24 26 Finish .

so this is a critical activity can not be delayed without increasing the completion time for the entire project. slack associated with activity E is LS – ES = 5 – 5 = 0 weeks implies activity E has no slack. Slack = LS – ES = LF – EF • For example slack associated with activity C is LS – ES = 8 – 5 = 3 weeks implies activity C can be delayed up to 3 weeks and entire project can be still be completed in 26 weeks.Project Scheduling with Known Activity Time • Slack is the length of time an activity can be delayed without increasing the project completion time i. so activity C is not critical for completion of the entire project. • Similarly. .e.

Activity Schedule Earliest Latest Earliest Latest Start Start Finish Finish Slack Activity (ES) (LS) (EF) (LF) (LS-ES) A 0 0 5 5 0 B 0 6 6 12 6 C 5 8 9 12 3 D 5 7 8 10 2 E 5 5 6 6 0 F 6 6 10 10 0 G 10 10 24 24 0 H 9 12 21 24 3 I 24 24 26 26 0 Critical Path Yes Yes Yes Yes Yes .Table 2.

Daugherty Company has manufactured industrial vacuum cleaning systems for many years. Management hopes that it can be manufactured at a reasonable cost and that its probability and no cord convenience will make it extremely attractive. Recently a member of a company’s new product research team submitted a report suggesting that the company consider manufacturing a cordless vacuum cleaner. . The new product referred to as Porta-Vac. • Daugherty’s management wants study the feasibility of manufacturing the Porta-Vac product. S. The feasibility study will recommend the action to be taken.Project Scheduling with Uncertain Activity Time • The H. could contribute to Daugherty’s expansion into the household market.

. How long will this feasibility study take? All activities that make up the project and immediate predecessors for each activity is given in the Table 3. Since this is a new or unique project historical data that provide accurate activity time estimate is not known but the probable time period for each activity is given in the Table 4.Project Scheduling with Uncertain Activity Time • To complete this study information must be obtained from the firm’s research and development (R&D) product testing manufacturing cost estimating and market research groups.

Project Scheduling with Uncertain Activity Time Table 3: Activity List for the Porta-Vac Project Activity A B C D E F G H I J Description Develop product design Plan market research Prepare routing (manufacturing engineering) Build prototype model Prepare marketing brochure Prepare cost estimate (industrial engineering) Do preliminary product testing Complete market survey Prepare pricing and forecast report Prepare final report Immediate Predecessor A A A C D B. E H F. I . G.

5 7.5 J 1 2 3 .Project Scheduling with Uncertain Activity Time Table 4: Optimistic.5 5 C 2 3 4 D 3 4 11 E 2 3 4 F 1.5 G 1.5 2 2.5 2 2.5 H 2.5 3. Most Probable and Pessimistic Activity Time Estimates (Weeks) Optimistic Most Probable Pessimistic Activity (a) (m) (b) A 4 5 12 B 1 1.5 I 1.5 3 4.

the expected time (t) is a  4m  b t 6 • With uncertain activity times. the expected time and variance for all activities is given in the Table 5.Project Scheduling with Uncertain Activity Time • The PERT/CPM procedure with uncertain activity times. . the variance of the activity is 2  ba  2 σ    6  • Using the above equations and data from Table 4.

Expected Times and Variances for Activities Activity Expected Time (Weeks) Variance A 6 1.78 E 3 0.03 G 3 0.69 I 2 0.Table 5.11 D 5 1.78 B 2 0.44 C 3 0.11 Total 32 .25 H 4 0.03 J 2 0.11 F 2 0.

Earliest Start and Earliest Finish Time C 3 A 6 0 6 Start B 2 0 6 9 F 2 9 11 D 5 6 11 G 11 14 3 J 15 17 2 E 3 6 9 H 4 I 13 15 2 2 9 13 Finish .

Latest Start and Latest Finish Time C 6 9 3 10 13 A 6 0 0 6 6 Start B 2 0 7 F 9 11 2 13 15 D 5 6 11 7 12 G 11 14 3 12 15 J 15 17 2 15 17 E 3 6 6 H 4 I 13 15 2 13 15 2 9 9 9 9 13 9 13 Finish .

Table 6. Activity Schedule Earliest Latest Start Start Activity (ES) (LS) A 0 0 B 0 7 C 6 10 D 6 7 E 6 6 F 9 13 G 11 12 H 9 9 I 13 13 J 15 15 Earliest Finish (EF) 6 2 9 11 9 11 14 13 15 17 Latest Finish Slack Critical (LF) (LS-ES) Path 6 0 Yes 9 7 13 4 12 1 9 0 Yes 15 4 15 1 13 0 Yes 15 0 Yes 17 0 Yes .

5 = 0.03 + 0.11 = 2.69 + 0. (z = (20-17)/1.78 + 0.11 + 0.• T be the total time required to complete the project (critical path).4656 + 0. • Expected value of T is E (T) • = TA + TE + TH + TI + TJ = 6 + 3 + 4 + 2 + 2 = 17 weeks • Variance in project completion time is σ 2 • = σ2A + σ2E + σ2H + σ2I + σ2J = 1.65 = 1.82) .65 • Management allotted 20 weeks to complete the project then the probability to complete the project before deadline is 0.9656.72 • σ = 1.

Considering Time Cost Trade Offs • Original developers of CPM provided the project manager with the option of adding resources to selected activities to reduce project completion time. overtime and so on) generally increase project costs. Table 7 defines the activities for two machine maintenance project. so the decision to reduce activity times must take into consideration the additional cost involved. . In effect the project manager must make a decision that involves trading reduced activity time for additional project cost. Added resources (such as more workers.

D 2 .Considering Time Cost Trade Offs Table 5: Activity List for Two Machine Maintenance Project Immediate Expected Activity Description Predecessor Time (days) A Overhaul machine I 7 B Adjust machine I A 3 C Overhaul machine II 6 D Adjust machine II C 3 E Test system B.

Considering Time Cost Trade Offs Table 6. Activity Schedule Earliest Latest Start Start Activity (ES) (LS) A 0 0 B 7 7 C 0 1 D 6 7 E 10 10 Earliest Finish (EF) 7 10 6 9 12 Latest Finish Slack Critical (LF) (LS-ES) Path 7 0 Yes 10 0 Yes 7 1 10 1 12 0 Yes .

.Considering Time Cost Trade Offs • From Table 6. • The length of the critical path and thus the time required to complete the project is 12 days. is referred to as crashing. • Now suppose that current production levels make completing the maintenance project within 10 days imperative. • This shortening of activity times which usually can be achieved by adding resources. the zero slack time and thus the critical path are associated with activities A-B-E.

. • To determine just where and how much to crash activity times.Crashing Activity Time • Added resources associated with crashing activity times usually result in added project costs. • To identify the activities that cost the least to crash and then crash those activities only the amount necessary to meet the desired project completion time. we need information on how much each activity can be crashed and how much the crashing process costs.

the shortest possible activity time) • Activity cost under maximum crashing • τi = expected time for activity i • τi’ = time under maximum crashing for activity i • Mi = maximum possible reduction in time for activity i due to crashing • Mi = τi .Crashing Activity Time • Hence we must ask for the following information: • Activity cost under the normal or expected activity time • Time to complete the activity under maximum crashing (i.e.τi’ .

per day). Thus. crashing cost Ki for each activity is given by Ki = (Ci’ . let Ci denote the cost for activity i under the normal or expected activity time and Ci’ denote the cost for activity i under maximum crashing.Ci)/Mi • Normal or expected time for activity A is 7 days at a cost of C A = $500 and time under maximum crashing is 4 days at a cost of CA’ = $800.Crashing Activity Time • Next.τA’ = 7 – 4 = 3 days • Crashing cost KA = (CA’ .g. per unit of time (e. • Maximum possible reduction time for activity A is • MA = τA .CA)/MA = (800 – 500) / 3 = 300 / 3 = $100 per day .

• Crashing the current critical activities. . which results in a total activity cost of $500 + $150 = $650.5 ($100) = $150. so to check the critical path in the revised network and perhaps either identify additional activities to crash or modify your initial crashing decision. the activity A has the lowest crashing cost per day of the three and crashing this activity by 2 days will reduce the A . B and E. other path may become critical.Crashing Activity Time • If we decided to crash activity A by only 1 and 1/2 days. the added cost would be 1. • Complete normal and crash activity data for the two machine maintenance project are given in Table 7. • The critical activities A.B – E path to the desired 10 days.

Ci) / Mi ActivityNormal Crash (Ci) A 7 4 500 800 3 100 B 3 2 200 350 1 150 C 6 4 500 900 2 200 D 3 1 200 500 2 150 E 2 1 300 550 1 250 .Crashing Activity Time Table 7 Normal and Crash Activity Data Time (days) Total Cost Crash Cost per Maximum Normal Crash Reduction Time Day Ki = (Ci') (Mi) (Ci‘ .