unit-ii-iii introduction to cpm-pert mr. rahul mohare faculty datta meghe institute of management...

Unit-II-IIIUnit-II-IIIIntroduction to Introduction to

CPM-PERTCPM-PERT

Mr. Rahul MohareFaculty

Datta Meghe Institute of Management StudiesAtrey Layout, Nagpur

OverviewProject ManagementWhat is CPM?ProcedureExamplesAnalysisWhat is PERT?ProceduresExamplesAnalysis

04/20/23 2Rahul Mohare-DMIMS

Project Management1. 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.


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.


Characteristics of ProjectCharacteristics 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. 04/20/23 5Rahul Mohare-DMIMS

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.

The Project Network Concurrent Activities

Expanded Network for Building a House Showing Concurrent Activities


Introduction- CPMThere 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.


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).


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?


Terminologies used in CPM/PERTIn 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.


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.


Building the Network

AOA NetworkAON Network


A Sample Set of Project Activities and Precedences

Task Predecessor

a --

b --

c a

d b

e b

f c, d

g e

Figure 1 Stage 1 of a Sample AON NetworkAON Network


Figure 2 Stage 2 of a Sample AON NetworkAON Network


Figure 3 A Completed Sample AON NetworkAON Network


Figure 4 Stage 1 of a Sample AOA NetworkAOA Network


Figure 5 Stage 2 of a Sample AOA NetworkAOA Network


Figure 6a A Completed Sample AOA NetworkAOA Network


Figure 6b A Completed Sample AOA Network Showing the Use of a Dummy Task


Situations in network diagramSituations in network diagramA

B

C

A must finish before either B or C can start

A

B

C both A and B must finish before C can start

D

C

B

Aboth A and C must finish before either of B or D can start

A

C

B

D

Dummy

A must finish before B can start

both A and C must finish before D can start


ExampleExample1. 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


1 2

CPM NETWORK

A


1 7

4

2

3

CPM NETWORK

A

B

D

C


1 7

6

5

4

2

3

CPM NETWORK

A

B

DF

E

C


1 7

6

5

4

2

3

CPM NETWORK

A

B

DF

GE

C


1 7

6

5

4

2

3

CPM NETWORK

A

B

DF

GE

C

H


1 7

6

5

4

2 8

3

CPM NETWORK

A

B

DF

GE

C

IH


1 7

6

5

4

2 8

3

CPM NETWORK

A

J

B

DF

GE

C

IH


1 7

6

5

4

2 8

3

CPM NETWORK with duration of each activity

A(1)

J(2)

B(4)

D(2)

F(3)G(2)

E(3)

C(2)

I(3)

H(1)


1 7

6

5

4

2 8

3

To find the Critical Path

A(1)

J(2)

B(4)

D(2)F(3)

G(2)E(3)

C(2)

I(3)H(1) 0

0

LFT EST


1 7

6

5

4

2 8

3

A(1)

J(2)

B(4)

D(2)F(3)

G(2)E(3)

C(2)

I(3)H(1) 0

0 0 1

LFT EST

To find the Critical Path


1 7

6

5

4

2 8

3

A(1)

J(2)

B(4)

D(2)F(3)

G(2)E(3)

C(2)

I(3)H(1) 0

0 0 1

0 3

To find the Critical Path LFT EST


1 7

6

5

4

2 8

3

A(1)

J(2)

B(4)

D(2)F(3)

G(2)E(3)

C(2)

I(3)H(1) 0

0

0 6

0 1

0 3



1 7

6

5

4

2 8

3

A(1)

J(2)

B(4)

D(2)F(3)

G(2)E(3)

C(2)

I(3)H(1) 0

0

0 6

0 1

0 3

0 8



1 7

6

5

4

2 8

3

A(1)

J(2)

B(4)

D(2)F(3)

G(2)E(3)

C(2)

I(3)H(1) 0

00 9

0 6

0 1

0 3

0 8



1 7

6

5

4

2 8

3

A(1)

J(2)

B(4)

D(2)F(3)

G(2)E(3)

C(2)

I(3)H(1) 0

0 0 9

0 6

0 5

0 1

0 3

0 8



1 7

6

5

4

2 8

3

A(1)

J(2)

B(4)

D(2)F(3)

G(2)E(3)

C(2)

I(3)H(1) 0

00 9

0 12

0 6

0 5

0 1

0 3

0 8



1 7

6

5

4

2 8

3

A(1)

J(2)

B(4)

D(2)F(3)

G(2)E(3)

C(2)

I(3)H(1) 0

00 9

12 12

0 6

0 5

0 1

0 3

0 8



1 7

6

5

4

2 8

3

A(1)

J(2)

B(4)

D(2)F(3)

G(2)E(3)

C(2)

I(3)H(1) 0

09 9

12 12

0 6

0 5

0 1

0 3

0 8



1 7

6

5

4

2 8

3

A(1)

J(2)

B(4)

D(2)F(3)

G(2)E(3)

C(2)

I(3)H(1) 0

09 9

12 12

0 6

0 5

0 1

0 3

8 8



1 7

6

5

4

2 8

3

A(1)

J(2)

B(4)

D(2)F(3)

G(2)E(3)

C(2)

I(3)H(1) 0

09 9

12 12

6 6

0 5

0 1

0 3

8 8



1 7

6

5

4

2 8

3

A(1)

J(2)

B(4)

D(2)F(3)

G(2)E(3)

C(2)

I(3)H(1) 0

09 9

12 12

6 6

0 5

0 1

3 3

8 8



1 7

6

5

4

2 8

3

A(1)

J(2)

B(4)

D(2)F(3)

G(2)E(3)

C(2)

I(3)H(1) 0

09 9

12 12

6 6

0 5

1 1

3 3

8 8



1 7

6

5

4

2 8

3

A(1)

J(2)

B(4)

D(2)F(3)

G(2)E(3)

C(2)

I(3)H(1) 0

09 9

12 12

6 6

10 5

1 1

3 3

8 8



1 7

6

5

4

2 8

3

A(1)

J(2)

B(4)

D(2)F(3)

G(2)E(3)

C(2)

I(3)H(1) 0

09 9

12 12

6 6

10 5

1 1

3 3

8 8

Critical Path

Critical Path

A – B – E – G – H - I

Critical Path

1 - 2 - 4 – 5 – 6 – 7 - 8


PERTPERT is a manager’s tool for defining and

coordinating moves for completing a project’s 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.


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 manager’s 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.


Benefits of CPM/PERTUseful at many stages of project managementMathematically simpleGive critical path and slack timeProvide project documentationUseful in monitoring costsPert 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.


The Advantages of PERT and CPMDetailed 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.


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.

04/20/23 Rahul Mohare-DMIMS 52

Limitations to CPM/PERT

Clearly defined, independent and stable activities

Specified precedence relationshipsOver emphasis on critical pathsDeterministic CPM modelActivity time estimates are subjective and

depend on judgmentPERT 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


SummaryA 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.


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.


unit-ii-iii introduction to cpm-pert mr. rahul mohare faculty datta meghe institute of management...

Documents

project activities

project managers

successful project

project costs technology

project lasts weeks

time duration

completion time

interrelated activities