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Unit-II-III Introduction to CPM-PERT

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Title: Unit-II-III Introduction to CPM-PERT


1
Unit-II-III Introduction to CPM-PERT
Mr. Rahul Mohare Faculty Datta Meghe Institute of
Management Studies Atrey Layout, Nagpur
2
Overview
  • Project Management
  • What is CPM?
  • Procedure
  • Examples
  • Analysis
  • What is PERT?
  • Procedures
  • Examples
  • Analysis

3
Project Management
  1. A project is a one-off undertaking, with a clear
    beginning and end, usually aimed at creating some
    useful change or adding value -- typically to
    build a new plant or create a new product.
  2. Projects bring together resources such as people,
    money and material
  3. These must be organized and managed to produce a
    defined result.
  4. The hard part is to bring the project to
    completion within a specified time, at no more
    than a specified cost.
  5. Various tools have been created to help project
    managers pull off this invariably challenging
    feat.

4
Project Management (Contd.)
  • There are three main points that are most
    important to a successful project
  • A Project must meet customer requirements.
  • A Project must be under budget.
  • A Project must be completed on time.

5
  • Characteristics of Project
  • The duration of a project lasts weeks, months, or
    even years. During such a long period, many
    changes may occur, most of which are difficult to
    predict. Such changes may have a significant
    impact on project costs technology, and
    resources. The longer the duration of the
    project, uncertain are the execution times and
    costs.
  • A project is complex in nature, involving many
    interrelated activities and participants from
    both within the organization and outside it
    (e.g., suppliers, subcontractors).
  • Delays in completion time may be very costly.
    Penalties for delays may amount to thousands of
    dollars per day. Completing projects late may
    result in lost opportunities and ill will as
    well.
  • Project activities are sequential. Some
    activities cannot start until others are
    completed.
  • Projects are typically a unique undertaking,
    something that has not been encountered
    previously.

6
The Project Network Concurrent Activities
  • Activities can occur at the same time
    (concurrently).
  • A dummy activity shows a precedence relationship
    but reflects no passage of time.
  • Two or more activities cannot share the same
    start and end nodes.

Expanded Network for Building a House Showing
Concurrent Activities
7
Introduction- CPM
  • There are some formal tools to aid project
    management. Two of the best known tools that fill
    this need are PERT (Program Evaluation Review
    Technique) and CPM (Critical Path Method).
  • CPM provides the following benefits
  • Provides a graphical view of the project.
  • Predicts the time required to complete the
    project.
  • Shows which activities are critical to
    maintaining the schedule and which are not.

8
Introduction (Contd.)
  • The essential technique for using CPM is to
    construct a model of the project that includes
    the following
  • A list of all activities required to complete the
    project (typically categorized within a work
    breakdown structure
  • The time (duration) that each activity will take
    to completion,
  • The dependencies between the activities
  • Using these values, CPM calculates the longest
    path of planned activities to the end of the
    project, and the earliest and latest that each
    activity can start and finish without making the
    project longer. This process determines which
    activities are "critical" (i.e., on the longest
    path) and which have "total float" (i.e., can be
    delayed without making the project longer).
  • In project management, a critical path is the
    sequence of project network activities which add
    up to the longest overall duration.
  • This determines the shortest time possible to
    complete the project. Any delay of an activity on
    the critical path directly impacts the planned
    project completion date (i.e. there is no float
    on the critical path).

9
  • Usefulness
  • CPM/PERT have been useful in planning costs,
    scheduling manpower and machine time. CPM/PERT
    can answer the following important questions
  • What will be the project duration? What are the
    risks/ dependencies/ assumptions involved?
  • What are the critical activities which could
    delay the entire project if they were not
    completed on time?
  • What is the current status of the project i.e. Is
    the project on schedule, behind schedule or ahead
    of schedule?
  • If the project has to be finished earlier than
    planned, what is the best way to do this at the
    least cost?

10
Terminologies used in CPM/PERT
In order to explain the purpose, structure and
operation of PERT and CPM, it is helpful to
define the following terms Activity An
activity is an effort that requires resources and
takes a certain amount of time for completion.
Examples of activities are studying for an
examination, designing a part, connecting bridge
girders, or training an employee. Dummy
Activity An activity, which is used to maintain
the pre-defined precedence relationship only
during the construction of the project network,
is called a dummy activity. Dummy activity is
represented by a dotted arrow and does not
consume any time and resource Critical
activity A critical activity is an activity
that, if even slightly de-layed, will hold up the
scheduled completion date of the entire
project. Path A path is a series of adjacent
activities leading from one event to
another. Critical path A critical path is the
sequence of critical activities that forms a
continuous path between the start of a project
and its completion.
11
  • Event An event is a specific accomplishment at a
    recognizable point in time a milestone, a
    checkpoint for example, passing a course at a
    university, submission of engineering drafts,
    completion of a span on a bridge, or the arrival
    of a new machine. Events do not have a time
    duration per se. To reach an event, all the
    activities that precede it must be completed. An
    event can be viewed as a goal attained, while the
    activities leading to it can be viewed as the
    means of achieving it. Event is indicated by
    circle in network diagram
  • Network A network is a logical and chronological
    set of activities and events, graphically
    illustrating relationships among the various
    activities and events of the project.

12
Building the Network
  • AOA Network
  • AON Network

13
A Sample Set of Project Activities and Precedences
14
Figure 1 Stage 1 of a Sample AON Network
15
Figure 2 Stage 2 of a Sample AON Network
16
Figure 3 A Completed Sample AON Network
17
Figure 4 Stage 1 of a Sample AOA Network
18
Figure 5 Stage 2 of a Sample AOA Network
19
Figure 6a A Completed Sample AOA Network
20
Figure 6b A Completed Sample AOA Network Showing
the Use of a Dummy Task
21
Situations in network diagram
A must finish before either B or C can start
both A and B must finish before C can start
both A and C must finish before either of B or D
can start
A must finish before B can start both A and C
must finish before D can start
22
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23
Example
1. Construct the CPM Network using the details
below and determine the critical path
Activity Immediate Predecessor Duration
A - 1
B A 4
C A 2
D A 2
E D 3
F D 3
G E 2
H F,G 1
I C,H 3
J B 2
24
CPM NETWORK
A
1
2
25
CPM NETWORK
4
D
A
1
7
2
C
B
3
26
CPM NETWORK
5
E
4
F
6
D
A
1
7
2
C
B
3
27
CPM NETWORK
5
E
G
4
F
6
D
A
1
7
2
C
B
3
28
CPM NETWORK
5
E
G
4
F
6
D
H
A
1
7
2
C
B
3
29
CPM NETWORK
5
E
G
4
F
6
D
H
I
A
8
1
7
2
C
B
3
30
CPM NETWORK
5
E
G
4
F
6
D
H
I
A
8
1
7
2
C
B
J
3
31
CPM NETWORK with duration of each activity
5
E(3)
G(2)
4
F(3)
6
D(2)
H(1)
I(3)
A(1)
8
1
7
2
C(2)
B(4)
J(2)
3
32
To find the Critical Path
LFT EST
5
E(3)
G(2)
4
F(3)
6
D(2)
0 0
H(1)
I(3)
A(1)
8
1
7
2
C(2)
B(4)
J(2)
3
33
LFT EST
To find the Critical Path
5
E(3)
G(2)
4
F(3)
6
D(2)
0 0
0 1
H(1)
I(3)
A(1)
8
1
7
2
C(2)
B(4)
J(2)
3
34
LFT EST
To find the Critical Path
5
0 3
E(3)
G(2)
4
F(3)
6
D(2)
0 0
0 1
H(1)
I(3)
A(1)
8
1
7
2
C(2)
B(4)
J(2)
3
35
LFT EST
To find the Critical Path
0 6
5
0 3
E(3)
G(2)
4
F(3)
6
D(2)
0 0
0 1
H(1)
I(3)
A(1)
8
1
7
2
C(2)
B(4)
J(2)
3
36
LFT EST
To find the Critical Path
0 6
5
0 3
E(3)
G(2)
4
F(3)
6
D(2)
0 0
0 1
0 8
H(1)
I(3)
A(1)
8
1
7
2
C(2)
B(4)
J(2)
3
37
LFT EST
To find the Critical Path
0 6
5
0 3
E(3)
G(2)
4
F(3)
6
D(2)
0 0
0 9
0 1
0 8
H(1)
I(3)
A(1)
8
1
7
2
C(2)
B(4)
J(2)
3
38
LFT EST
To find the Critical Path
0 6
5
0 3
E(3)
G(2)
4
F(3)
6
D(2)
0 0
0 9
0 1
0 8
H(1)
I(3)
A(1)
8
1
7
2
C(2)
B(4)
0 5
J(2)
3
39
LFT EST
To find the Critical Path
0 6
5
0 3
E(3)
G(2)
4
F(3)
0 12
6
D(2)
0 0
0 9
0 1
0 8
H(1)
I(3)
A(1)
8
1
7
2
C(2)
B(4)
0 5
J(2)
3
40
LFT EST
To find the Critical Path
0 6
5
0 3
E(3)
G(2)
4
F(3)
12 12
6
D(2)
0 0
0 9
0 1
0 8
H(1)
I(3)
A(1)
8
1
7
2
C(2)
B(4)
0 5
J(2)
3
41
LFT EST
To find the Critical Path
0 6
5
0 3
E(3)
G(2)
4
F(3)
12 12
6
D(2)
0 0
9 9
0 1
0 8
H(1)
I(3)
A(1)
8
1
7
2
C(2)
B(4)
0 5
J(2)
3
42
LFT EST
To find the Critical Path
0 6
5
0 3
E(3)
G(2)
4
F(3)
12 12
6
D(2)
0 0
9 9
0 1
8 8
H(1)
I(3)
A(1)
8
1
7
2
C(2)
B(4)
0 5
J(2)
3
43
LFT EST
To find the Critical Path
6 6
5
0 3
E(3)
G(2)
4
F(3)
12 12
6
D(2)
0 0
9 9
0 1
8 8
H(1)
I(3)
A(1)
8
1
7
2
C(2)
B(4)
0 5
J(2)
3
44
LFT EST
To find the Critical Path
6 6
5
3 3
E(3)
G(2)
4
F(3)
12 12
6
D(2)
0 0
9 9
0 1
8 8
H(1)
I(3)
A(1)
8
1
7
2
C(2)
B(4)
0 5
J(2)
3
45
LFT EST
To find the Critical Path
6 6
5
3 3
E(3)
G(2)
4
F(3)
12 12
6
D(2)
0 0
9 9
1 1
8 8
H(1)
I(3)
A(1)
8
1
7
2
C(2)
B(4)
0 5
J(2)
3
46
LFT EST
To find the Critical Path
6 6
5
3 3
E(3)
G(2)
4
F(3)
12 12
6
D(2)
0 0
9 9
1 1
8 8
H(1)
I(3)
A(1)
8
1
7
2
C(2)
B(4)
10 5
J(2)
3
47
Critical Path
6 6
5
3 3
E(3)
G(2)
4
F(3)
12 12
6
D(2)
0 0
9 9
1 1
8 8
H(1)
I(3)
A(1)
8
1
7
2
C(2)
B(4)
10 5
J(2)
3
Critical Path A B E G H - I
Critical Path 1 - 2 - 4 5 6 7 - 8
48
PERT
  • PERT is a managers tool for defining and
    coordinating moves for completing a projects
    objectives on time. Its use is not restricted to
    the business world.
  • It can be applied to any endeavor which requires
    planned, controlled, and integrated work
    patterns. More often than not, diversified
    activities contribute to the difficulty in
    completing a project on schedule.
  • Many uncertainties are associated with these
    activities. PERT is a technique that
    statistically presents knowledge about these
    uncertainties.

49
  • A technique -- that aids the decision-maker, but
    does not make decisions for him.
  • A technique -- that presents statistical
    information regarding the uncertainties
    associated with completing the different
    activities inherent in the project.
  • A method -- for focusing a managers attention
    on
  • latent problems that require solutions, and
  • procedures and adjustments of time, resources, or
    performance,
  • which may improve the probability of meeting all
    intended project completion dates.

50
Benefits of CPM/PERT
  • Useful at many stages of project management
  • Mathematically simple
  • Give critical path and slack time
  • Provide project documentation
  • Useful in monitoring costs
  • Pert uses probabilistic time estimates to
    determine the probability that a project will be
    done by a specific time.
  • To reduce the length of the project (crashing),
    we need to know the critical path of the project
    and the cost of reducing individual activity
    times. Crashing activities that are not on the
    critical path typically do not reduce project
    completion time.
  • The critical chain approach removes excess safety
    time from individual activities and creates a
    project buffer at the end of the critical path.

51
The Advantages of PERT and CPM Detailed planning
The use of PERT and CPM forces management to plan
in detail and to define what must be done to
accomplish objectives on time. Commitments and
communications Management is forced to plan and
make commitments regarding execution times and
completion dates. The tools also provide for
better communication among the various
departments in an organization and between
suppliers and the client. Efficient monitoring
and control The number of critical activities in
a network (especially in a large one) is only a
small portion of the total activities.
Identification of the critical activities enables
the use of an efficient monitoring system (mainly
record-keeping and reports) concentrating only on
the critical activities. Identifying potential
problem areas The critical activities are also
more likely to become problem areas. Once
identified, contingency plans may be
devised. Proper use of resources Employing PERT
or CPM enables management to use resources more
wisely by examination of the overall plan.
Resources can he transferred to bottleneck or
trouble areas from other activities.
52
  • Rescheduling The tools enable management to
    follow up and correct deviations from schedule as
    soon as they are detected, thus minimizing
    delays.
  • Government contracts Several government agencies
    require the submission of a PERT or CPM plan with
    bids.
  • Easily understood CPM and PERT can be easily
    understood because they provide a method for
    visualizing an entire project. Therefore
    management can explain the tools to supervisors
    and employees in such a way that the chances of
    implementation are increased.
  • Adaptable to computers PERT and CPM are easily
    adaptable to computer use. Large projects can be
    planned by computers in seconds is even capable
    of diagramming the networks.
  • Tools for decision making PERT and CPM allow
    management to check the effectiveness and
    efficiency of alternative ways of executing
    projects by examining possible trade-offs among
    resources (usually time and cost).
  • Assess probability of completion (in PERT only)
    The probabilities of successfully meeting
    deadlines, finishing early, or finishing late can
    be assessed by the use of PERT.
  • Cost-time trade-offs (in CPM only) CPM enables
    management to evaluate trade-offs between the
    cost of executing a job in a normal way or
    expediting activities (called crashing) at a
    higher cost so as to finish earlier.

53
Limitations to CPM/PERT
  • Clearly defined, independent and stable
    activities
  • Specified precedence relationships
  • Over emphasis on critical paths
  • Deterministic CPM model
  • Activity time estimates are subjective and depend
    on judgment
  • PERT assumes a beta distribution for these time
    estimates, but the actual distribution may be
    different
  • PERT consistently underestimates the expected
    project completion time due to alternate paths
    becoming critical

54
Summary
  • A project is a unique, one time event of some
    duration that consumes resources and is designed
    to achieve an objective in a given time period.
  • Each project goes through a five-phase life
    cycle concept, feasibility study, planning,
    execution, and termination.
  • Two network planning techniques are PERT and CPM.
    Pert uses probabilistic time estimates. CPM uses
    deterministic time estimates.
  • Pert and CPM determine the critical path of the
    project and the estimated completion time. On
    large projects, software programs are available
    to identify the critical path.

55
  • Pert uses probabilistic time estimates to
    determine the probability that a project will be
    done by a specific time.
  • To reduce the length of the project (crashing),
    we need to know the critical path of the project
    and the cost of reducing individual activity
    times. Crashing activities that are not on the
    critical path typically do not reduce project
    completion time.
  • The critical chain approach removes excess safety
    time from individual activities and creates a
    project buffer at the end of the critical path.
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