Project Management: Networks,
CPM/PERT
Project Scheduling Terms
• Successors • Merge activities
• Predecessors • Burst activities
• Network diagram • Node
• Serial activities • Path
• Concurrent activities • Critical Path
B
A D E F
C
Project Scheduling
• Steps • Techniques
– Define activities – Gantt chart
– Sequence activities – CPM/PERT
– Estimate time – Microsoft Project
– Develop schedule
Network Diagrams
Show Help
interdependence schedule
resources
Show
Facilitate start &
communication finish
dates
Determine project Identify
completion critical
activities
Gantt Chart
• Graph or bar chart with a bar for each project
activity that shows passage of time
• Provides visual display of project schedule
• Slack
– amount of time an activity can be delayed
without delaying the project
Example of Gantt Chart
Month
0 | 2 | 4 | 6 | 8 | 10
Activity
Design house
and obtain
financing
Lay foundation
Order and
receive
materials
Build house
Select paint
Select carpet
Finish work
1 3 5 7 9
Month
Project Control
• Time management
• Cost management
• Quality management
• Performance management
– Earned Value Analysis
• a standard procedure for numerically measuring a project’s
progress, forecasting its completion date and cost and
measuring schedule and budget variation
• Communication
• Enterprise project management
CPM/PERT
• Critical Path Method (CPM)
– DuPont & Remington-Rand (1956)
– Deterministic task times
– Activity-on-node network construction
• Project Evaluation and Review Technique (PERT)
– US Navy, Booz, Allen & Hamilton
– Multiple task time estimates; probabilistic
– Activity-on-arrow network construction
Laddering Activities
Project ABC can be completed more efficiently
if subtasks are used
A(3) B(6) C(9) ABC=18 days
A1(1) A2(1) A3(1)
B1(2) B2(2) B3(2)
Laddered ABC=12
days C1(3) C2(3) C3(3)
Hammock Activities
Used as summaries for subsets of activities
0 A 5 5 B 15 15 C 18
0 5 5 5 10 15 15 3 18
0 Hammock 18
0 18 18
Useful with a complex
project or one that has
a shared budget
Project Network
• Activity-on-node (AON)
– nodes represent activities,
and arrows show Node
precedence relationships
• Event
– completion or beginning of 1 2 3
an activity in a project
• Dummy
– two or more activities Branch
cannot share same start and
end nodes
AON Network for House Building Project
Lay foundations Build house
2 4
Finish work
2 3
7
Start 1 1
3
Design house 6
and obtain
3
1 5 1
financing
1 Select carpet
Order and receive
materials Select paint
Critical Path
2 4
2 3
7
Start 1 1
3
3 6
1 5 1
1
A: 1-2-4-7 Critical path
3 + 2 + 3 + 1 = 9 months
B: 1-2-5-6-7 Longest path
3 + 2 + 1 + 1 + 1 = 8 months through a network
C: 1-3-4-7 Minimum project
3 + 1 + 3 + 1 = 8 months
completion time
D: 1-3-5-6-7
3 + 1 + 1 + 1 + 1 = 7 months
Activity Start Times
Start at 5 months
2 4
Finish at 9 months
2 3
7 Finish
Start 1 1
3
3 6
1 5 1
1 Start at 6 months
Start at 3 months
Node Configuration
Activity number Earliest start
Earliest finish
1 0 3
3 0 3
Latest finish
Activity duration Latest start
Activity Scheduling
• Earliest start time (ES)
– earliest time an activity can start
– ES = maximum EF of immediate predecessors
• Forward pass
– starts at beginning of CPM/PERT network to determine
earliest activity times
• Earliest finish time (EF)
– earliest time an activity can finish
– earliest start time plus activity time
– EF= ES + t
Earliest Activity Start and Finish Times
Lay foundations
Build house
2 3 5
Start 4 5 8
2
3
1 0 3 7 8 9
3 1
Design house
and obtain 6 6 7 Finish work
financing 3 3 4
1
1 5 5 6
Select carpet
Order and receive 1
materials Select pain
Activity Scheduling (cont.)
• Latest start time (LS)
– Latest time an activity can start without delaying critical
path time
– LS= LF - t
• Latest finish time (LF)
– latest time an activity can be completed without delaying
critical path time
– LF = minimum LS of immediate predecessors
• Backward pass
– Determines latest activity times by starting at the end of
CPM/PERT network and working forward
Latest Activity Start and Finish Times
Lay foundations
Build house
2 3 5
Start 4 5 8
2 3 5
3 5 8
1 0 3 7 8 9
3 0 3 1 8 9
1
Design house
and obtain 6 6 7 Finish work
financing 3 3 4
1 7 8
1 4 5 5 5 6
Select carpet
Order and receive 1 6 7
materials Select paint
Activity Slack
Activity LS ES LF EF Slack
*1 0 0 3 3 0
*2 3 3 5 5 0
3 4 3 5 4 1
*4 5 5 8 8 0
5 6 5 7 6 1
6 7 6 8 7 1
*7 8 8 9 9 0
* Critical Path
PERT—PROGRAM EVALUATION AND REVIEW
TECHNIQUE
• Assumes each activity duration has a range that
statistically follows a beta distribution.
• PERT uses three time estimates for each activity:
optimistic, pessimistic, most likely, and a weighted
average to represent activity durations.
– Knowing the weighted average and variances for
each activity allows the project planner to
compute the probability of meeting different
project durations.
Activity (Beta) and Project (Normal) –
Frequency Distributions
Probability Considerations Activity Duration
Estimates
• Optimistic time: time to complete an activity if
everything goes perfectly well.
• Most likely time: time to complete an activity
under normal conditions.
• Pessimistic time: time to complete an activity
under adverse circumstances.
Probability Considerations Probability
Fundamentals
• Network planning that uses three time estimates
for each activity can be considered a stochastic or
probabilistic technique, since it allows for
uncertainty.
• Any technique that uses only one time estimate is
considered to be a deterministic technique.
22
Probability Considerations: The Beta Probability
Distribution
• When using three time estimates, it is assumed that
they follow a beta probability distribution.
1
Activity Time Calculations
The weighted average activity time is computed by the following
formula:
Activity Time Calculations (cont’d)
The variability in the activity time estimates is approximated by the
following equations:
The standard deviation for the activity:
The standard deviation for the project:
Note the standard deviation of the activity is squared in this equation;
this is also called variance. This sum includes only activities on the
critical path(s) or path being reviewed.
FIGURE: Beta Probability Distribution
FIGURE: Normal Probability Distribution
Probability Fundamentals
• The total probability distribution of the critical path
activities is a normal distribution.
• The mean equals the sum of the individual activity
expected durations.
• The variance equals the sum of the individual activity
variances.
Probability of Completing the Project
The equation below is used to compute the “Z” value
found in statistical tables (Z = number of standard
deviations from the mean), which, in turn, tells the
probability of completing the project in the time specified.
Project Network with Probabilistic Time
Estimates: Example
Equipment
installation Equipment testing
and modification
1 4
6,8,10 2,4,12 System Final
training debugging
System 10
development 8
Manual 3,7,11 1,4,7
Start 2 testing Finish
3,6,9
5 11
2,3,4 9 1,10,13
Position
recruiting 2,4,6
Job Training System
3 6 System changeover
1,3,5
3,4,5 testing
Orientation
7
2,2,2
Activity Time Estimates
TIME ESTIMATES (WKS) MEAN TIME VARIANCE
ACTIVITY a m b t б2
1 6 8 10 8 0.44
2 3 6 9 6 1.00
3 1 3 5 3 0.44
4 2 4 12 5 2.78
5 2 3 4 3 0.11
6 3 4 5 4 0.11
7 2 2 2 2 0.00
8 3 7 11 7 1.78
9 2 4 6 4 0.44
10 1 4 7 4 1.00
11 1 10 13 9 4.00
Earliest, Latest, and Slack
Critical Path
1 0 8 4 8 13
8 1 9 5 16 21
10 13 17
16
4 21 25
8 9
Start 2 0 6 Finish
7 9 16
6 0 6 9
5 6 11 16 25
3 6 9 9 9 13
9 16 25
4 12 16
3 0 3 6 3 7
3 2 5 4 5 9
7 3 5
2 14 16
Activity Early, Late Times, and Slack
ACTIVITY t б ES EF LS LF S
1 8 0.44 0 8 1 9 1
2 6 1.00 0 6 0 6 0
3 3 0.44 0 3 2 5 2
4 5 2.78 8 13 16 21 8
5 3 0.11 6 9 6 9 0
6 4 0.11 3 7 5 9 2
7 2 0.00 3 5 14 16 11
8 7 1.78 9 16 9 16 0
9 4 0.44 9 13 12 16 3
10 4 1.00 13 17 21 25 8
11 9 4.00 16 25 16 25 0
Total project variance = sum of the
variances of all activities lying on
the critical path only
2 = б22 + б52 + б82 + б112
2 = 1.00 + 0.11 + 1.78 + 4.00
= 6.89 sq. weeks
Probabilistic Network Analysis
Determine probability that project is
completed within specified time
x-
Z=
where
= tp = project mean time (sum of
the weighted mean activity durations of all
activities lying on the critical path only)
= project standard deviation
(square root of project variance)
x = proposed project time
Z = number of standard deviations x
is from mean
Normal Distribution of Project Time
Probability
Z
= tp x Time
Southern Textile Example
What is the probability that the project is completed within 30 weeks?
x-
2 = 6.89 weeks Z =
P(x 30 weeks)
= 6.89 = 30 - 25
= 2.62 weeks 2.62
= 1.91
= 25 x = 30 Time (weeks)
From Table A.1, (appendix A) a Z score of 1.91 corresponds to a
probability of 0.4719. Thus P(30) = 0.4719 + 0.5000 = 0.9719
Activity times and variances
• Activity a m b te Variance
• A 17 29 47 30 25
• B 6 12 24 13 9
• C 16 19 28 20 4
• D 13 16 19 16 1
• E 2 5 14 6 4
• F 2 5 8 5 1
Hypothetical Network
What is the probability that the
project would be completed on or
before 67 time units?
Possible Project Duration
TE = 64; TS = 67,
• Z = (67 – 64)/ sqrt (25+9+1+1)
• Z = 0.50
• P = 0.69
What is the probability that the
project would be completed on or
before 60 time units?
TE = 64; TS = 60,
• Z = (60 – 64)/ sqrt (25+9+1+1)
• Z = -0.67
• P = 0.25
Z Values
