CPM / PERT

Introduction to CPM / PERT Techniques

CPM/PERT or Network Analysis as the technique is sometimes called, developed along two parallel
streams, one industrial and the other military. CPM (Critical Path Method) was the discovery of
M.R.Walker of E.I.Du Pont de Nemours & Co. and J.E.Kelly of Remington Rand, circa 1957. The
computation was designed for the UNIVAC-I computer. The first test was made in 1958, when CPM
was applied to the construction of a new chemical plant. In March 1959, the method was applied to
maintenance shut-down at the Du Pont works in Louisville, Kentucky. Unproductive time was reduced
from 125 to 93 hours.

PERT (Project Evaluation and Review Technique) was devised in 1958 for the POLARIS missile program
by the Program Evaluation Branch of the Special Projects office of the U.S.Navy, helped by the
Lockheed Missile Systems division and the Consultant firm of Booz-Allen & Hamilton. The calculations
were so arranged so that they could be carried out on the IBM Naval Ordinance Research Computer
(NORC) at Dahlgren, Virginia.

PERT and CPM are basically time-oriented methods in the sense that they both lead to determination
of a time schedule for the project. The significant difference between two approaches is that the time
estimates for the different activities in CPM were assumed to be deterministic while in PERT these are
described probabilistically. These techniques are referred as project scheduling techniques.
In CPM activities are shown as a network of precedence relationships using activity-on-node network
construction
– Single estimate of activity time
– Deterministic activity times

USED IN: Production management - for the jobs of repetitive in nature where the activity time
estimates can be predicted with considerable certainty due to the existence of past experience.

In PERT activities are shown as a network of precedence relationships using activity-on-arrow

network construction.
Multiple time estimates
Probabilistic activity times

USED IN: Project management - for non-repetitive jobs (research and development work), where
the time and cost estimates tend to be quite uncertain. This technique uses probabilistic time
estimates.
Benefits of PERT/CPM
Useful at many stages of project management, Mathematically simple, Give critical path and
slack time, Provide project documentation, Useful in monitoring costs

Limitations of PERT/CPM
Clearly defined, independent and stable activities, Specified precedence relationships, Over
emphasis on critical paths

Applications of CPM / PERT

These methods have been applied to a wide variety of problems in industries and have found
acceptance even in government organizations. These include
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 way

The Framework for PERT and CPM

Essentially, there are six steps which are common to both the techniques. The procedure is listed
below:
I. Define the Project and all of its significant activities or tasks. The Project (made up of several tasks)
should have only a single start activity and a single finish activity.
II. Develop the relationships among the activities. Decide which activities must precede and which
must follow others.
III. Draw the "Network" connecting all the activities. Each Activity should have unique event
numbers. Dummy arrows are used where required to avoid giving the same numbering to two
activities.
IV. Assign time and/or cost estimates to each activity
V. Compute the longest time path through the network. This is called the critical path.
VI. Use the Network to help plan, schedule, and monitor and control the project.

The Key Concept used by CPM/PERT is that a small set of activities, which make up the longest path
through the activity network control the entire project. If these "critical" activities could be identified
and assigned to responsible persons, management resources could be optimally used by concentrating
on the few activities which determine the fate of the entire project. Non-critical activities can be
replanned, rescheduled and resources for them can be reallocated flexibly, without affecting the whole
project.

Advantages and Disadvantages

PERT/CPM has the following advantages

between the elements,

t, late start, and slack for each activity,

dependencies leading to improved overlapping of activities and tasks where feasible

PERT/CPM has the following disadvantages:

relationships,
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special size paper,

eframe on most PERT/CPM charts makes it harder to show status although colours
can help (e.g., specific colour for completed nodes),

Critical Path in Network Analysis Basic Scheduling Computations

The notations used are (i, j) = Activity with tail event i and head event j

Ei = Earliest occurrence time of event i

Lj = Latest allowable occurrence time of event j
Dij = Estimated completion time of activity (i, j)
(Es)ij = Earliest starting time of activity (i, j)
(Ef)ij = Earliest finishing time of activity (i, j)
(Ls)ij = Latest starting time of activity (i, j)
(Lf)ij = Latest finishing time of activity (i, j)

Determination of floats and slack times

There are three kinds of floats
Total float – The amount of time by which the completion of an activity could be delayed beyond the
earliest expected completion time without affecting the overall project duration time.
Mathematically (Tf)ij = (Latest start – Earliest start) for activity ( i – j)
(Tf)ij = (Ls)ij - (Es)ij or (Tf)ij = (Lj - Dij) - Ei
Free float – The time by which the completion of an activity can be delayed beyond the earliest
finish time without affecting the earliest start of a subsequent activity.
Mathematically (Ff)ij = (Earliest time for event j – Earliest time for event i) – Activity time for ( i, j)
(Ff)ij = (Ej - Ei) - Dij

Independent float – The amount of time by which the start of an activity can be delayed without
effecting the earliest start time of any immediately following activities, assuming that the preceding
activity has finished at its latest finish time.
Mathematically (If)ij = (Ej - Li) - Dij The negative independent float is always taken as zero.

Event slack - It is defined as the difference between the latest event and earliest event times.

Mathematically Head event slack = Lj – Ej, Tail event slack = Li – Ei

Determination of critical path

Critical event – The events with zero slack times are called critical events. In other words the event i
is said to be critical if Ei = Li
Critical activity – The activities with zero total float are known as critical activities. In other words
an activity is said to be critical if a delay in its start will cause a further delay in the completion date of
the entire project.

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Critical path – The sequence of critical activities in a network is called critical path. The critical path
is the longest path in the network from the starting event to ending event and defines the minimum
time required to complete the project.

Worked Examples on CPM

Example 1 Determine the early start and late start in respect of all node points and identify critical
path for the following network.

Solution

Table: Network Analysis

Activity (i, j) Normal Time Earliest Time Latest Time Float Time
(Dij) Start Finish Start Finish (Li - Dij ) - Ei
(Ei) (Ei + Dij ) (Li - Dij ) (Li)
(1, 2) 10 0 10 0 10 0
(1, 3) 8 0 8 1 9 1
(1, 4) 9 0 9 1 10 1
(2, 5) 8 10 18 10 18 0
(4, 6) 7 9 16 10 17 1
(3, 7) 16 8 24 9 25 1
(5, 7) 7 18 25 18 25 0
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 (6, 7) 7 16 23 18 25 2
(5, 8) 6 18 24 18 24 0
(6, 9) 5 16 21 17 22 1
(7, 10) 12 25 37 25 37 0
(8, 10) 13 24 37 24 37 0
(9, 10) 15 21 36 22 37 1

From the table, the critical nodes are (1, 2), (2, 5), (5, 7), (5, 8), (7, 10) and (8, 10)

From the table, there are two possible critical paths

i. 1 → 2 → 5 → 8 → 10
ii. 1 → 2 → 5 → 7 → 10

Example 2 Find the critical path and calculate the slack time for the following network

Solution:

From the above table, the critical nodes are the activities (1, 3), (3, 5) and (5, 9)

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Example 3 A project has the following time schedule

Construct the network and compute

1. TE and TL for each event
2. Float for each activity
3. Critical path and its duration

Solution

Event No: 1 2 3 4 5 6 7 8 9 10
TE: 0 4 1 5 7 11 15 17 18 25
TL: 0 12 1 13 7 16 15 17 18 25

Float = TL (Head event) – TE (Tail event) – Duration

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The resultant network shows the critical path

The two critical paths are

i. 1 → 3 → 5 →7 → 8 → 9 →10
ii. 1 → 3 → 5 → 7 → 8 →10
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Project Evaluation and Review Technique (PERT)

The main objective in the analysis through PERT is to find out the completion for a particular event
within specified date. The PERT approach takes into account the uncertainties. The three time values
are associated with each activity

1. Optimistic time – It is the shortest possible time in which the activity can be finished. It assumes
that every thing goes very well. This is denoted by t0.
2. Most likely time – It is the estimate of the normal time the activity would take. This assumes
normal delays. If a graph is plotted in the time of completion and the frequency of completion in that
time period, then most likely time will represent the highest frequency of occurrence. This is denoted
by tm.
3. Pessimistic time – It represents the longest time the activity could take if everything goes wrong.
As in optimistic estimate, this value may be such that only one in hundred or one in twenty will take
time longer than this value. This is denoted by tp.

In PERT calculation, all values are used to obtain the percent expected value.

1. Expected time – It is the average time an activity will take if it were to be repeated on large number
of times and is based on the assumption that the activity time follows Beta distribution, this is given by
te = ( t0 + 4 tm + tp ) / 6

2. The variance for the activity is given by

σ2 = [(tp – to) / 6] 2

Example 1 For the project

Task: A B C D E F G H I J K
Least
4 5 8 2 4 6 8 5 3 5 6
time:
Greatest
8 10 12 7 10 15 16 9 7 11 13
time:

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Most
likely 5 7 11 3 7 9 12 6 5 8 9
time:

Find the earliest and latest expected time to each event and also critical path in the network.

Solution
Least time Greatest time Most likely time Expected time
Task
(t0) (tp) (tm) (to + tp + 4tm)/6
A 4 8 5 5.33
B 5 10 7 7.17
C 8 12 11 10.67
D 2 7 3 3.5
E 4 10 7 7
F 6 15 9 9.5
G 8 16 12 12
H 5 9 6 6.33
I 3 7 5 5
J 5 11 8 8
K 6 13 9 9.17

Expected Start Finish

Task Total float
time (te) Earliest Latest Earliest Latest
A 5.33 0 0 5.33 5.33 0
B 7.17 0 8.83 7.17 16 8.83
C 10.67 5.33 5.33 16 16 0
D 3.5 0 10 3.5 13.5 10
E 7 16 16 23 23 0
F 9.5 3.5 13.5 13 23 10
G 12 3.5 18.5 15.5 30.5 15
H 6.33 23 23 29.33 29.33 0
I 5 23 25.5 28 30.5 2.5
J 8 28 30.5 36 38.5 2.5
K 9.17 29.33 29.33 31.5 38.5 0

The network is

The critical path is A →C →E → H → K

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Example 2 A project has the following characteristics

Activity Most optimistic Most pessimistic Most likely time

time (a) time (b) (m)
(1 – 2) 1 5 1.5
(2 – 3) 1 3 2
(2 – 4) 1 5 3
(3 – 5) 3 5 4
(4 – 5) 2 4 3
(4 – 6) 3 7 5
(5 – 7) 4 6 5
(6 – 7) 6 8 7
(7 – 8) 2 6 4
(7 – 9) 5 8 6
(8 – 10) 1 3 2
(9 – 10) 3 7 5

Construct a PERT network. Find the critical path and variance for each event

Solution

Activity (a) (b) (m) (4m) te v

(a + b +4m)/6 [(b – a) / 6]2
(1 – 2) 1 5 1.5 6 2 4/9
(2 – 3) 1 3 2 8 2 1/9
(2 – 4) 1 5 3 12 3 4/9
(3 – 5) 3 5 4 16 4 1/9
(4 – 5) 2 4 3 12 3 1/9
(4 – 6) 3 7 5 20 5 4/9
(5 – 7) 4 6 5 20 5 1/9
(6 – 7) 6 8 7 28 7 1/9
(7 – 8) 2 6 4 16 4 4/9
(7 – 9) 5 8 6 24 6.17 1/4
(8 – 10) 1 3 2 8 2 1/9
(9 – 10) 3 7 5 20 5 4/9

The network is constructed as shown below

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The critical path = 1 → 2 → 4 → 6 → 7 →9 →10

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