Final Operations

8/3/2019 Final Operations

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CPM & PERTPrepa

redforOperationalResearch

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Crystal Britto 71

Fenil Jiwani 80

Kirthika Nadar 84

Nikhil Vinchurkar 93

Sudarshan Tare 111

Sunil Dhake 113


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FLOW OF PRESENTATION

Introduction to CPM & PERT

History

Comparision between CPM & PERT

What is Crashing ?

Example on Crashing and Pert

Benefits/Advantages

Limitations/Disadvantages

Applications/uses of CPM/PERT

Case Study


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WHAT IS CPM/PERT?

y Critical path method and Project evaluation review technique

are the methods to estimate the tentative durations forcompleting a project.

These techniques help project managers to handle the

complexity and time based nature of the project.

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HISTORY

PERT developed by Booz Allen Hamilton and The US Navy for

planning and control of the Polaris missile program.

Emphasis- Completing the program in the shortest possibletime

CPM developed byMorgan R Walker of Du Pont in 1950.

Emphasis- Trade off between the cost of the project and its

overall completion time.

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CPM - CRITICAL PATH METHOD

Definition: The critical path method (CPM) is a step-by-step

technique for process planning that defines critical and non-

critical tasks with the goal of preventing time-frame problems

and process bottlenecks

y Single estimate of activity time

y Deterministic activity times

USED IN : Production management - for the jobs which are

repetitive in nature where the activity time estimates can

be predicted with considerable certainty due to the

existence of past experience.


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PERT -

PROJECT EVALUATION & REVIEW TECHNIQUES

Definition: PERT is a method to analyze the involved tasks incompleting a given project, especially the time needed tocomplete each task, and to identify the minimum time needed to

complete the total project.

Multiple time estimates

Probabilistic activity times

USED IN : Project management - for non-repetitive jobs(research and development work), where the time and costestimates tend to be quite uncertain. This technique usesprobabilistic time estimates.


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EMPHASIS ON LOGIC IN NETWORK

CONSTRUCTION Construction of network should be based on logical or technical

dependencies among activities

Example - before activity Approve Drawing can be started, theactivity Prepare Drawing must be completed

Common error build network on the basis of time logic (afeeling for proper sequence ) see example below

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WRONG !!! CORRECT


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3 POINT ESTIMATES FOR PERT

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CRITICAL PATH

Longest path through a network.

Is that the sequence of activities and events where there is noslack i.e.. Zero slack

Determines the total time required to complete the project

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COMPARISON BETWEEN CPMAND PERT

CPM PERT

1 Uses network, calculate float or slack,identify critical path and activities,guides to monitor and controllingproject

Uses network, calculate total estimate& variance, identify critical path andactivities, guides to monitor andcontrolling project

2 Uses one value of activity time Requires 3 estimates of activity time

Calculates mean and variance of time

3 Used where times can be estimatedwith confidence, familiar activities

Used where times cannot be estimatedwith confidence.

Unfamiliar or new activities

4 Minimizing cost is more important Meeting time target or estimating

percent completion is more important5 Focuses on time and cost Focuses only on time

6 Example: construction projects,building one off machines, ships, etc

Example: Involving new activities orproducts, research and developmentetc 10


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QUESTIONSANSWERED BYCPM & PERT

Completion date?

On Schedule?

Within Budget?

Critical Activities?

How can the project be finished early at the least cost?

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WHAT IS CRASHING?

Project crashing is a method for shortening the project

duration by reducing the time of one or more of the

critical project activities to less than its normal

activity time.

The objective of crashing is to reduce project duration

at minimum cost.

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EXAMPLE:

Activity Precedin

g

Activity

Normal

Time

Crash

Time

Normal

Cost

Crash

Cost

A - 3 2 18000 19000

B - 8 6 600 1000

C B 6 4 10000 12000

D B 5 2 4000 10000

E A 13 10 3000 9000

F A 4 4 15000 15000

G F 2 1 1200 1400

H C,E,G 6 4 3500 4500

I F 2 1 7000 800013


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Draw a project network diagram and find critical

path.

If a deadline of 17 weeks is imposed for

completion of the project, what activities will becrashed, What would be the additional cost, and

what would be the critical activities of the

network after crashing?

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NETWORK

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1-2-4-6 A-F-I =9

1-2-4-5-6 A-F-G-H=15

1-2-5-6 A-E-H=22 CRITICAL PATH

1-3-5-6 B-C-H =20

1-3-6 B-D =13


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FORMULA

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Activity Path Crashing Cost (rs)

A 1-2 1000

B 1-3 200

C 3-5 1000

D 3-6 2000

E 2-5 2000

F 2-4 -

G 4-52

00H 5-6 500

I 4-6 1000

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Total cost= Normal cost + crash cost

62300+6200

=68500

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PERT

The owner of a chain of a fast food restaurants is

considering a new computer system for

accounting and inventory control. A computer

company sent the following information about the

system installation

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Activit

y

Description predecess

or

A Select the comp model - 4 6 8

B Design I/O system A 5 7 15

C Design monitoring system A 4 8 12

D Assemble computerhardware

B 15 20 25

E Develop the main

programmes

B 10 18 26

F Develop I/O routines C 8 9 16

G Create database E 4 8 12

H Install the system D,F 1 2 3

I Test & Implement G,H 6 7 8

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Construct an arrow diagram for this problem

Determine the critical path and complete the

expected project completion time.

Determine the probability of completing the project in 55 days

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Activi

ty

Path To Tm Tp Te

A 1-2 4 6 8 6 0.66 0.4356

B 2-3 5 7 15 8 1.66 2.7556

C 2-4 4 8 12 8 1.33 1.7689

D 3-6 15 20 25 20 1.66 2.7556

E 3-5 10 18 26 18 2.66 7.0756

F 4-6 8 9 16 10 1.33 1.7689

G 5-7 4 8 12 8 1.33 1.7689

H 6-7 1 2 3 2 0.33 0.1089

I 7-8 6 7 8 7 0.33 0.1089

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1-2-3-5-7-8

6+8+18+8+7=47 critical path

X=47

U=55 =3.496


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FORMULA

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The area between mean and z=2.89

0.5+0.4981=0.9981


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BENEFITS OF CPM/PERT

y Breakdown project into component tasks

y Forecast and Analyze Possibilities

y Focused and Disciplined

y

Improved Communication

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LIMITATIONS

There can be potentially hundreds or thousands of activities and

individual dependency relationships

PERT is not easily scalable for smaller projects

The network charts tend to be large and unwieldy requiringseveral pages to print and requiring special size paper

The lack of a timeframe on most PERT/CPM charts makes it

harder to show status although colors can help (e.g., specific color

for completed nodes)

When the PERT/CPM charts become unwieldy, they are nolonger used to manage the project.

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Packages are available to determine the shortest path and

other relevant information.

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Data entry window

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Output of the package

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Applications of CPM & PERT

1. Construction of a new plant.

2. Research and development of a new product.

3. NASA space exploration projects.

4. Movie productions.5. Building of a ship.

6. Government-sponsored projects for developing a new

weapons system.

7. Relocation of a major facility.

8. Maintenance of a nuclear reactor.

9. Installation of a management information system.10. Conducting an advertising campaign.

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CASE STUDY

The Reliable Construction Company has just made the winning bid

of $5.4 million to construct a new plant for a major manufacturer.

The manufacturer needs the plant to go into operation within a

year. Therefore, the contract includes the following provisions:

A penalty of $300,000 if Reliable has not completed construction

by the deadline 47 weeks from now.

To provide additional incentive for speedy construction, a bonus of

$150,000 to be paid to Reliable if the plant is completed within 40

weeks.

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Reliable assigned its best construction manager, David Perty,

to this project to help ensure that it stays on schedule. In

order to schedule the activities, Mr. Perty consults with each

of the crew foremen to develop an estimate of how long each

activity should take when it is done in the normal way.

Adding up these times gives a grand total of 79 weeks, which is

far beyond the deadline for the project. Fortunately, some of

the activities can be done in parallel, which substantially

reduces the project completion time.

CONT

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Activity Activity Description Immediate

Predecessors

Estimated

Duration

A Excavate 2 weeks

B Lay the foundation A 4 weeks

C Put up the rough wall B 10 weeks

D Put up the roof C 6 weeks

E Install the exterior plumbing C 4 weeks

F Install the interior plumbing E 5 weeks

G Put up the exterior siding D 7 weeks

H Do the exterior painting E, G 9 weeks

I Do the electrical work C 7 weeks

J Put up the wallboard F, I 8 weeks

K Install the flooring J 4 weeks

L Do the interior painting J 5 weeks

M Install the exterior fixtures H 2 weeks

N Install the interior fixtures K, L 6 weeks

Activity List for the Reliable Construction Co.Project

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CONCLUSION

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REFERENCES

http://en.wikipedia.org/wiki/Program_Evaluation

_and_Review_Technique

http://dl.acm.org/citation.cfm

Quantative Techniques in Management by N. D.VOHRA

http://www.mindtools.com/critpath.html

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Thank you

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WISH YOU ALL A VERY HAPPYPONGAL

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Final Operations