Introduction

 Any project involves planning, scheduling and

controlling a number of interrelated activities with
use of limited resources, namely, men, machines,
materials, money and time.

 The projects may be extremely large and complex such

as
construction of a housing , a highway, a shopping
complex etc.
 introduction of new products and research and
development projects.

 It is required that managers must have a dynamic

planning and scheduling system to produce the best
A convenient analytical and visual technique of PERT
and CPM prove extremely valuable in assisting the
managers in managing the projects.

PER stand for Project Evaluation and

s
Technique Review during 1950’s. The technique
T developed was
developed and used in conjunction with the planning and
designing of the Polaris missile project.

CPM stands Critical Path Method which

for
DuPont Companywas and developed
applied firstby
to the construction projects in the
chemical industry.
Though both PERT and CPM techniques have similarity in
terms of concepts, the basic difference is, PERT is used for
analysis of project scheduling problems. CPM has single time
estimate and PERT has three time estimates for activities and
uses probability theory to find the chance of reaching the
scheduled time.
Project management generally consists of
three phases.
Planning:

Planning involves setting the objectives of the project.

Identifying various activities to be performed and determining
the requirement of resources such as men, materials, machines,
etc.

The cost and time for all the activities are estimated, and a
network diagram is developed showing sequential
interrelationships (predecessor and successor) between various
activities during the planning stage.
Scheduling:

Basd on the time estimates, the start and finish times for
each activity are worked out by applying forward and backward
pass techniques, critical path is identified, along with the slack
and float for the non-critical paths.
Controlling:

Controlling refers to analyzing and evaluating the actual

COMPONENTS of PERT/CPM
NETWORK
PERT / CPM networks contain two major
components
i. Activities, and
ii. Events
Activity: An activity represents an action and consumption
of resources (time, money, energy) required to complete a
portion of a project. Activity is represented by an arrow,
(Figure 8.1).

Event: An event (or node) will always occur at the beginning and
end of an activity. The event has no resources and is represented
by a circle. The ith event and jth event are the tail event and head
event respectively, (Figure 8.2).
Merge and Burst
Events
One or more activities can start and end simultaneously at an event
(Figure 8.3 a, b).

Preceding and Succeeding Activities

Activities performed before given events are known as preceding
activities (Figure 8.4), and activities performed after a given event are
known as succeeding activities.

Activities A and B precede activities C and D

respectively.
 Dummy Activity

An imaginary activity which does not consume any resource and time is
called a dummy activity. Dummy activities are simply used to
represent a connection between events in order to maintain a logic
in the network. It is represented by a dotted line in a network, see
Figure 8.5.
 ERRORS TO BE AVOIDED IN CONSTRUCTING A
NETWORK

a.Two activities starting from a tail

event must not have a same end
event. To ensure this, it is absolutely
necessary to introduce a dummy
activity, as shown in Figure 8.6.

b.Looping error should not be formed

in a network, as it represents
performance of activities repeatedly
in a cyclic manner, as shown below in
Figure 8.7.

c.In a network, there should be

only one start event and one
ending event as shown below, in
Figure 8.8.

d.The direction of arrows

should flow from left to right
 RULES IN CONSTRUCTING A NETWORK
1. No single activity can be represented more than once in a
network. The length of an arrow has no significance.

2.The event numbered 1 is the start event and an event with

highest number is the end event. Before an activity can be
undertaken, all activities preceding it must be completed.
That is, the activities must follow a logical sequence (or –
interrelationship) between activities.

3.In assigning numbers to events, there should not be any

duplication of event numbers in a network.

4.Dummy activities must be used only if it is necessary to

reduce the complexity of a network.

5.A network should have only one start event and one end
event.
Some conventions of network diagram are shown in
Figure 8.10 (a), (b), (c), (d) below:
 PROCEDURE FOR NUMBERING THE
EVENTS USING
FULKERSON'S RULE
Step1: Number the start or initial event as 1.

Step2: From event 1, strike off all outgoing activities. This

would have made one or more events as initial events (event
which do not have incoming activities). Number that event as
2.

Step3: Repeat step 2 for event 2, event 3 and till the end
event. The end event must have the highest number

Example 1:
Draw a network for a house construction project. The
sequence of activities with their predecessors are
given in Table 8.1, below.
The network diagram in Figure 8.11 shows the procedure
relationship between the activities. Activity A (preparation of
house plan), has a start event 1 as well as an ending event 2.
Activity B (Construction of house) begins at event 2 and
ends at event 3. The activity B cannot start until activity A
has been completed. Activities C and D cannot begin until
activity B has been completed, but they can be performed
simultaneously. Similarly, activities E and F can start only
after completion of activities C and D respectively. Both
activities E and F finish at the end of event 6.

Example 2: Consider the project given in Table 8.2 and

construct a network diagram. Table 8.2: Sequence of
Activities for Building Construction Project
Solution:
The activities C and D have a common predecessor A. The
network representation shown in Figure 8.12 (a), (b) violates the rule
that no two activities can begin and end at the same events. It
appears as if activity B is a predecessor of activity C, which is not the
case. To construct the network in a logical order, it is necessary to
introduce a dummy activity as shown in Figure 8.12.
Example 3:
Construct a network for a project whose activities and their
predecessor relationship
are given in Table 8.3.

Solution: The network diagram for the given problem is shown

in Figure 8.14 with activities A, B and C starting
simultaneously.
 Example 4: Draw a network
diagram for a project given
in Table 8.4.

Solution: An activity network diagram describing the project

is shown in Figure 8.15, below:
 CRITICAL PATH
ANALYSIS
The critical path for any network is the longest path through the
entire network.

Since all activities must be completed to complete the entire

project, the length of the critical path is also the shortest time
allowable for completion of the project.

Thus if the project is to be completed in that shortest time, all

activities on the critical path must be started as soon as possible.

These activities are called critical activities.

If the project has to be completed ahead of the schedule, then the

time required
for at least one of the critical activity must be reduced.

Further, any delay in completing the critical activities will increase

the project duration.
The activity, which does not lie on the critical path, is called
non-critical activity.

These non-critical activities may have some slack time.

The slack is the amount of time by which the start of an

activity may be delayed without affecting the overall
completion time of the project.

But a critical activity has no slack.

To reduce the overall project time, it would require more

resources (at extra cost) to reduce the time taken by the
critical activities to complete.
 Scheduling of Activities: Earliest Time (TE)
and Latest
Before the critical path in a network is determined, it is
Time(TL)
necessary to find the earliest and latest time of each event
to know the earliest expected time (TE) at which the
activities originating from the event can be started and to
know the latest allowable time (TL) at which activities
terminating at the event can be completed.
Forward Pass Computations (to calculate Earliest,
Time TE)

Step 1: Begin from the start event and move towards the end
event.

Step 2: Put TE = 0 for the start event.

Step 3: Go to the next event (i.e node 2) if there is an incoming

activity for event 2,
add calculate TE of previous event (i.e event 1) and activity
time.

Note: If there are more than one incoming activities, calculate

 Backward Pass Computations (to calculate
Latest Time TL)
Procedure :

Step 1: Begin from end event and move towards the start event.
Assume that
the direction of arrows is reversed.

Step 2: Latest Time TL for the last event is the earliest time. TE
of the last
event.

Step 3: Go to the next event, if there is an incoming activity,

subtract the value of TL of previous event from the activity
duration time. The arrived value is TL for that event. If there
are more than one incoming activities, take the minimum TE
value.

Step 4: Repeat the same procedure from step 2 till the start
event.
 DETERMINATION OF FLOAT AND
SLACK TIMES
As discussed earlier, the non – critical activities have some
slack or fl oat. The fl oat of an activity is the amount of time
available by which it is possible to delay its completion time
without extending the overall project completion time.
tij = duration of activity
TE = earliest expected
time TL = latest
allowable time
ESij = earliest start time of the
activity EFij = earliest finish
time of the activity LSij = latest
start time of the activity LFij =
latest finish time of the activity

Total Float TFij: The total float of an activity is the difference

between the latest start time and the earliest start time of
that activity.

TFij = LS ij – ESij ....................(1)

or
Free Float FFij: The time by which the completion of an
activity can be delayed from its earliest finish time
without affecting the earliest start time of the succeeding
activity is called free float.

FF ij = (Ej – Ei) – tij ....................(3)

FFij = Total float – Head event slack

Independent Float IFij: The amount of time by which the start

of an activity can be delayed without affecting the earliest
start time of any immediately following activities, assuming
that the preceding activity has finished at its latest finish
time.
IF ij = (Ej – Li) –
tij ....................(4) Where tail event slack =
IFij = Free float – Tail event Li – Ei
slack
The negative value of independent fl oat is considered
to be zero.
Critical Path:
After determining the earliest and the latest scheduled
times for various activities, the minimum time
required to complete the project is calculated. In a
network, among various paths, the longest path which
determines the total time duration of the project is
called the critical path. The following conditions must
be satisfied in locating the critical path of a network.

An activity is said to be critical only if both the

conditions are satisfied.
1.TL – TE = 0
2.TLj – tij – TEj = 0
Example :
A project schedule has the following characteristics as
shown in Table

i. Construct PERT
network.
ii. Compute TE and
TL for each
(i) From the data given in the problem, the activity network is
constructed as shown in Figure given below
 (ii) To determine the critical path, compute the earliest, time
TE and latest time TL for each of the activity of the project.
The calculations of TE and TL are as follows:,
To calculate TE for all To calculate TL for all
activities activities
TE1 = 0
TE2 = TE1 + t1, 2 = 0 + 4 = 4 TL10 = TE10 = 22
TE3 = TE1 + t1, 3 = 0 + 1 =1 TL9 = TE10 – t9,10 = 22 – 7 = 15
TE4 = max (TE2 + t2, 4 and TE3 + TL8 = TE10 – t8, 10 = 22 – 5 = 17
t3, 4) TL7 = TE8 – t7, 8 = 17 – 2 = 15
= max (4 + 1 and 1 + 1) = max TL6 = TE8 – t6, 8 = 17 – 1 = 16
(5, 2) TL5 = min (TE6 – t5, 6 and TE7 –
= 5 days t5, 7)
TE5 = TE3 + t3, 6 = 1 + 6 = 7 = min (16 – 4 and 15 –8) =
TE6 = TE5 + t5, 6 = 7 + 4 = 11 min (12, 7)
TE7 = TE5 + t5, 7 = 7 + 8 = 15 = 7 days
TE8 = max (TE6 + t6, 8 and TE7 + TL4 = TL9 – t4, 9 = 15 – 5 =10
t7, 8) TL3 = min (TL4 – t3, 4 and TL5 –
= max (11 + 1 and 15 + 2) = t3, 5 )
max (12, 17) = min (10 – 1 and 7 – 6) = min
= 17 days (9, 1)
TE9 = TE4 + t4, 9 = 5 + 5 = 10 = 1 day
TE10 = max (TE9 + t9, 10 and TE8 TL2 = TL4 – t2, 4 = 10 – 1 = 9
(iii) From the Table 8.6, we observe
that the activities 1 – 3, 3 – 5, 5 – 7,7
– 8 and 8 – 10 are critical activities
as their floats are zero.
 PROJECT EVALUATION REVIEW
TECHNIQUE, (PERT)
In the critical path method, the time estimates are
assumed to be known with certainty. In certain projects
like research and development, new product
introductions, it is difficult to estimate the time of
various activities.
Hence PERT is used in such projects with a probabilistic method
using three time estimates for an activity, rather than a single
estimate, as shown in Figure 8.22.
Optimistic time tO:
It is the shortest time taken to complete
the activity. It means that if everything
goes well then there is more chance of
completing the activity within this time.

Most likely time tm:

It is the normal time taken to complete an
activity, if the activity were frequently
repeated under the same conditions.

Pessimistic time tp:

It is the longest time that an activity would
take to complete. It is the worst time
estimate that an activity would take if
 Taking all these time estimates into consideration, the
expected time
of an activity is arrived at.

The average or mean (ta)

value of the activity
duration is given by,

The variance of the

activity time is calculated
using the formula,

Probability for Project

Duration

The probability of completing the

project within the scheduled time
(Ts) or contracted time may be
obtained by using the standard
normal deviate where Te is the
expected time of project
completion.
 Example
An R & D project has a list of tasks to be performed whose time
estimates are given in the Table 8.11, as follows.

a. Draw the project network.

b.Find the critical path.
c. Find the probability that the project is completed in 19 days. If
the probability is less that 20%, find the probability of
completing it in 24 days.
 Time expected for each
activity is calculated using
the formula (5): Similarly,
the expected time
is calculated for all the
activities.
The variance activity time
of
calculated usingisthe formula
(6). Similarly, variances
of all the
activities are calculated.
Construct a network
diagram:

calculate the time earliest, TE and

time Latest TL for all the activities.

From the network diagram Figure 8.24, the critical path is

identified as 1-4, 4-6, 6-7, with a project duration of 22
days.
The probability of completing the project within 19 days is
given by, P (Z< Z0)
To find
Z0 ,

we know, P (Z <Z Network Model 0) = 0.5 – z (1.3416) (from normal tables, z

(1.3416) = 0.4099)
= 0.5 – 0.4099
= 0.0901 Thus, the probability of completing the R & D project in 19
9.01% days is 9.01%.
Since the probability of completing the project in 19 days is less
than 20% As in
question, we find the probability of completing it in 24 days.
 COST ANALYSIS
The two important components of any activity are the cost and time.
Cost is
directly proportional to time and vice versa.

For example, in constructing a shopping complex, the expected time

of completion can be calculated using be time estimates of various
activities. But if the construction has to the finished earlier, it
requires additional cost to complete the project. We need to arrive at
a time / cost trade-off between total cost of project and total time
required to complete it.
Normal time:
Normal time is the time required to
complete the activity at normal
conditions and cost.
Crash time:
Crash time is the shortest possible
activity time; crashing more than the
normal time will increase the direct
cost.
Cost Slope
Cost slope is the increase in cost per
unit of
 Example

An activity takes 4 days to complete at a normal cost of Rs. 500.00. If

it is possible to complete the activity in 2 days with an additional
cost of Rs. 700.00, what is the incremental cost of the activity?

Incremental Cost or Cost Slope

It means, if one day is reduced we have to spend Rs. 100/- extra

per day.

Project Crashing
Procedure for crashing

Step1: Draw the network diagram and mark the Normal time
and Crash time.

Step2: Calculate TE and TL for all the

activities. Step3: Find the critical path

and other paths.

 Step 5: Establish a tabular column with required field.

Step 6: Select the lowest ranked activity; check whether it is a

critical activity. If so,crash the activity, else go to the next
highest ranked activity.
Note: The critical path must remain critical while crashing.
Step 7: Calculate the total cost of project for each crashing
Step 8: Repeat Step 6 until all the activities in the critical
path are fully
crashed.
Example
The Tabl
following
8.13 gives e the
activities of a
construction
project and other
data.

If the indirect cost is Rs. 20 per day, crash the

activities to find the minimum duration of the project
and the project cost associated.
 Solution

From the data provided in the table, draw the network diagram
(Figure 8.28) and find the critical path.

From the diagram, we

observe that the critical path is
1-2-5 with project duration of 14
days

The cost slope for all activities and

their rank is calculated as shown in
Table 8.14
The available paths of the network are listed down
in Table 8.15 indicating the sequence of crashing
(see Figure 8.29).

The sequence of
crashing and the total
cost involved is given in
Table 8.16 Initial direct
cost
= sum of all normal costs
given
= Rs. 490.00
It is not possible to crash more than 10 days, as all the
activities in the critical path are fully crashed. Hence the
minimum project duration is 10 days with the total cost
of Rs. 970.00.
Assignme
nt
a.Draw the project network diagram.
b.Calculate the length and variance of the critical
path.
c.What is the probability that the jobs on the critical
path can be
completed in 41 days?