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PERT/CPM

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PERT/CPM A MANAGEMENT TOOL

FOR IMPROVEMENT PERT/CPMPROJECT EVALUATION

REVIEW TECHNIQUE/

CRITICAL PATH METHOD

PERT/CPMIS A MANAGEMENT TOOL

FOR CONTROLLING A

PROJECT.

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INTRODUCTION

A management device or technique, regardlessof the degree of sophistication. Is only a tool. IT CANNEVER BE A SUBSTITUTE FOR EFFECTIVE

MANAGER.

The tool or technique must, however, be anintegral part of the entire management process.Logically, in any presentation of a managementtechnique such as CPM (Critical Path Method), asound concept of the management process must first

be reviewed.

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The management process being presented hereis the result of evaluation over many generationsof trial and error in many cases, mostly errors.

Much has been written about the function,environment, and the role of management. Butvery little has been done to DEVELOP andDESCRIBE an orderly process by whichmanagers can go about getting things done

EFFECTIVELY. We shall therefore try to developand describe a management process as thefoundation for utilizing CPM as a tool ofManagers, for improving the Managerseffectiveness, based upon the results of trials and

errors by Managers.

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The Management Process Cycle

1. The determination and effective communication of the primeand supporting objectives.

2. The development of a coordinated plan of action for the

accomplishment of the objectives. 3. The conversion of the plan into integrated schedule within

the available resources.

4. The regular reporting and concurrent evaluation of progressagainst the schedule plan of action.

5. The recycling of the above process to achieve theincorporation of a desired new action into a new cohesivescheduled plan (Feedback and Correction).

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CRITICAL PATH METHOD

Let us now turn to CPM, a new basic technique for planning, scheduling,and controlling projects of all types. Our objectives is to establish a plan ofaction that will meet certain restrictions (budgets, time, personnel, machines)and yet accomplish our goal. If there were no restrictions, there would be fewproblems. Realistically, however, one or more restrictions are always present.

In our modern age, we are fond of initials (PNB, DBP, BOI, GMT/FM,etc.) and in project planning and control, we are likely to meet CPM and PERT,both of which are very recent project management tools. Both techniqueswere developed independently almost at the same time, around the late fifties.

PERT (Program Evaluation and Review Technique) was originallydevised in 1958 for the Polaris Program by The Program Evaluation Branch ofThe Special Projects Office of the U.S. Navy with the help of LockheedEngineers and Consultants from Booz-Allen and Hamilton. CPM wasdeveloped in 1957 for E.I. du Pont de Nemours and Co. by engineers from duPont and Serry Rand.

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At their inception and in the earlier applications PERT andCPM had major differences that set them apart. PERT was moreprobabilistic, CPM deterministic. PERT used three time estimatesfor activity duration optimistic estimate, most likely, andpessimistic. A formula based on the Beta Probability Distributionwas used to come up with the expected or average time for anactivity. Moreover, PERT concerned itself with time only.

CPM on the other hand used only one time estimate foractivities, and related time to costs. BOTH, however, used the

network and critical path analysis as their starting points.

As both systems came into use, however, changes wereintroduced into both systems, and at present it is quite difficult tospecifically say what the differences are, to such extent that someauthors beg off by referring to the method as PERT/CPM. Most

present applications, however, hue more to the lines originally setdown by CPM, although for some reason or another, the termPERT seems to have gained more acceptance and is improperlyapplied even to what properly should be clearly in the province ofCPM. To eliminate confusion most authors prefer to use the termNetwork Analysis.

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While the major applications of CPM has been in construction, thereis a definite trend to use the method for any activity and time oriented

projects. It can be used in projecting cash flows, in purchasing,inventory management, and manpower leveling. Other knownapplications are in weapon systems acquisition, maintenanceplanning, manual and reports preparation, salvage (boat) operations,casting of a play through opening night, convention planning,introduction of a new product in the market, advertising campaigns,book publishing, receipt, classification, handling and shipping of

materials.

A PROJECT is any set of activities which are necessary toachieve a goal. Small projects may be broken into perhaps as few as25 activities, while large projects may consists of hundreds or eventhousands of activities. CPM directly and clearly indicates which jobs

are CRITICAL that is, which are bottleneck jobs which will delay theentire project if they themselves are delayed. In our practice, we findthat a normal range of critical activities in a project is 5 to 10% of totalactivities.

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PLANNING COMES FIRST

In a typical project, some jobs runconcurrently while others must be done insequence. The project plan is set forth in clear-

cut fashion by a network diagram, sometimescalled an arrow diagram.

Each arrow of the diagram represents a JOBor an ACTIVITY. The necessary sequence orordering of the jobs is depicted by the way inwhich the arrows are connected in the networkdiagram.

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For each activity or job in the network

diagram, the following questions mustbe asked:

1.

What jobs immediately precede this job?2. What jobs immediately follow this job?3. What jobs can be done concurrently with

this jobs?

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NORMAL TIME SCHEDULE

After the project plan has been prepared in networkform, the next step is to derive a normal time estimate foreach activity so that a normal time schedule for the projectmay be computed. The normal time for each job is the leasttime in which a job can be done without paying a premiumof any sort for expediting to shorten its time. Thisshortening of time is sometimes called crashing the job.

For the example , we have assumed the correspondingdays needed to accomplished each job and these areindicated below the arrows. This will enable us to illustratehow the normal project completion time and other usefulresults can be calculated.

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At the tail and head of each arrow we

have a numbered circle. These circles areknown as Events and have beensystematically numbered to aid in reference.Note also that the circle at the head has ahigher number than the circle at the tail ofthe arrow.

The job can now be referred to as job

(1, 2), a nomenclature which hasconsiderable virtue when the project databeing processes by hand calculation, andespecially by computers.

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WHY CPM? If real projects were as simple as this example, there would be no

difficulty in drawing the same conclusions without any specialtechnique such as CPM. In practice, however, the size andcomplexity of the project network almost guarantee that, without asystematic analysis, project managers, coordinators, purchasers,estimators, and other performing scheduling functions will, moreoften than not, discover too late that their intuition is faulty, theirmemories are inadequate, and their experience is applicable. Theyhave not foreseen which jobs are critical and which are not. Theymay have concentrated a lot of effort and spent a lot of money infollowing up non-critical jobs, and more likely, they have neglectedthe critical ones which, if delayed, will increase costs.

On large projects, it is often desirable to determine the near-critical jobs also. These must be watched almost as carefully asthose known to be critical at the onset, inasmuch as slippages ofactual time used by these jobs may cause them to be critical.

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GUIDELINES FOR NETWORK

DIAGRAMMING1. Each activity will be represented by an arrow.

(Activity)

Start Finish(Duration)

Three basic questions should be asked about each arrow:

a) What must be done before we start this activity?b) What can be done concurrently?c.) What must immediately follow this activity?

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2. All activities have an origin and a terminal event. The circle at the tailand head of each arrow is called an event. This is usually a point in time.

A B1 2 3

Event 1 is the predecessor event of activity A or job (1, 2).Event 2 is its successor event.Event 2, on the other hand is the predecessor event of activity B or job (2, 3), and

Event 3 is Bs successor event.

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1. An activity cannot start until all activities leading

to its predecessor event have been completed.

2. The length or direction of the arrow has no meaning.Time flows from the tail to the head of each arrow. Thearrows will then interconnect to show the sequence in

which the tasks will be performed. The result is thearrow diagram.

3. Dummy activities (indicated by broken line,

arrows) are used to keep the sequence of jobslogically in some instances. One may wish toestablish that a particular event J cannot occur beforesome event I, although no specific job occurs betweenthe two events. All dummies have zero time. They

simply indicate sequence of events.

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Example The Barbers Case

Activity Description

A Go tobarbers

chairB Have haircutC Have manicureD Leave barbers chair

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The barbers case can be diagrammed in the

following manner.

Event Number: Activity: Description(1, 2) - - - - - --- A Go to barbers chair

wrong { (2, 3) - - - - - --- B Have haircutwrong { (2, 3) - - - - ---- C Have manicure

(3, 4)-----------------------D Leave barbers chair

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There would be no way of distinguishing jobs Band C in terms of beginning and end of events.Both will be designated job (2, 3)Have haircut

and job (2, 3), Have manicure. This will lead toconfusion. Each job must be uniquely identified.A dummy activity averts this difficulty and such adiagram look like this...

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1 52 4

3

A B

C E

D

E is the dummy activity that makes job (2, 3) Have manicure,distinguishable from job (2, 4), Have haircut.

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CPM (Critical path method) it is the expansion/modification ofan old, well known Gantt Charts or Bar Charts.

Gantt Chart:

Disadvantages:

1. It does not clearly indicate details regarding progress ofactivities.

2. It does not give a clear indication as to what portions of anyactivity are specifically prerequisite to following activities, or todependent activities, which may overlap.

Activity-Event Network portrays the interrelationship between theactivities and events that comprise a project or job.

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Event is the start and end of a task and represents a point in time,commonly represented by circles or oval. ( or )

Activity is the work required to accomplish an event, activities,obviously, require the elapse of time, commonly representedby arrows.( )

CPM

is the basic technique for planning, scheduling, andcontrolling projects of all types. CPM is a tool, device ortechnique for a project management.

Dummy Activity

Avoid redundant activities- Shows continuity, relationships- Shows that one activity must precede another- Shows logic- Does not require time, which will add cost.

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Earliest time (Te) is the earliest time at which the events can

occur, in order for the completion of the project to occur asscheduled.

Early finish (TE) = TE + Duration (take the highest value)

Latest time (TL) is the latest time at which the events can occur, inorder for the completion of the project to occur asscheduled.

Late finish (TL) = TL Duration (take the lowest value)

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Slack (Float) = (TL) (TE) for zero slack it means that any delayin the occurrence of that event will cause delay in startingsubsequent activities (the path is critical). For positive slackit means that the activity could be delayed by the amountindicated without causing any delay in the total project.

Critical path path having zero slack; such path determines themaximum time required for completing the project. This path haslonger duration. Any delay in any of the events on the critical path

will result in extending the completion of the project.

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Project is any set of activities, which are necessary to

achieve a goal. Small projects may be broken intoperhaps as few as 25 activities, while large projectsmay consist of hundreds or even thousands ofactivities. In a typical project, some jobs can runconcurrently while others must be in sequence. The

project plan is set forth in clear-cut fashion by anetwork diagram, sometimes called an arrow diagram.Such arrow represents a job or an activity.

- For each activity, the following questions be asked:

1. What jobs immediately precede this job?2 .What jobs immediately follow this job?3. What jobs can be done concurrently with this job?

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Project planning In practice preparation of such a project planof action has benefits apart from its vital use of

scheduling. The plan in the form of a network diagramgives a clear understanding to everybody involved in theprojects execution.

Example of an Arrow or network Diagram

Draw the arrow diagram and listdown the number of events

Jobs B & C depend on AJob D depend on B & C

Job E depend on CThe project is completed when job

D and E are done

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Event Event No. Activity

1-2 ---------------- A2-3 ---------------- C2-4 ---------------- B3-4 ---------------- dummy4-5 ---------------- D

3-5 ---------------- E

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Event no. Job/Activity1-2 ------------------------- A

2-3 ------------------------- B2-5 ------------------------- C2-4 ------------------------- D4-5 ------------------------- G3-6 ------------------------- E

5-6 ------------------------- F

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Draw the arrow diagram and listdown the number of events

Jobs B, C and D depend AJob E depend on job BJob F depend on job B, C and DJob G depends on D.

Job H depend on E, F and GThe project is completed when jobH has been done

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Event no. Job/Activity1-2 ------ A2-3 ------ B2-5 ------ C2-4 ------ D3-5 ------- dummy

3-6 ------ E4-5 ------ dummy4-6 ------- G5-6 ------- F6-7 ------- H

7H

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Example project: Determine/draw the project critical path

Activity Duration1 2 -------------- 5

2

3 -------------- 52 4 -------------- 53 4 -------------- 103 5 -------------- 54 5 -------------- 1056 -------------- 5

1 2 3 5 6

4

5 5

5 10

10

5 5

35 DAYS

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Path 1 Path 2 Path 3

(1-2)-----5 days (1-2)-----5 (1-2)------5(2-3)-----5 (2-4)-----5 (2-3)------5(3-4)-----10 (4-5)-----10 (3-5)------5(4-5)-----10 (5-6)-----5 (5-6)------5

(5-6)-----525 days 20 days

35 daysProject criticalpath

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Draw a critical projectCritical pathSolve for project duration