Welcome to the Session

of

Critical Path Method

Dr. Md. Mamunur Rashid
Bangladesh Institute of Management
April 10,2014
Dr. Md. Mamunur Rashid, 2014

Critical Path Method (CPM)

A project management method of
calculating the total duration of a
project based on individual task
durations and their dependencies.

Dr. Md. Mamunur Rashid, 2014

Schedule
The timing and sequence of tasks
within a project. A schedule consists
mainly of tasks, task dependencies,
durations, constraints, and timeoriented project information.
Dr. Md. Mamunur Rashid, 2014

Tasks Vs. Critical Task

An activity that has a beginning and an end.
Project plans are made up of tasks.
A task that must be completed on schedule for
the project to finish on time. If a critical task is
delayed, the project completion date might
also be delayed. A series of critical tasks
makes up a project's critical path. if it has zero
days of slack.
Dr. Md. Mamunur Rashid, 2014

Slack Vs. Buffer

The amount of time that a task can slip before
it affects another task or the project's finish
date.
Additional time added to a task's or project's
scheduled duration that accounts for possible
increases in the actual time required to
complete the task or project.

Dr. Md. Mamunur Rashid, 2014

Difference Between PERT and CPM

PERT
It is basically analytic in concept
and designed as probabilistic
network
It is built up of event-oriented
diagrams.
Three time estimates are possible
for activities linking up two
events.
Times are not related to cost as
such.
Used for R& D projects, product
development, and other similar
projects involving facto of
uncertainty.

Dr. Md. Mamunur Rashid, 2014

CPM
It is basically synthesizing in
concept and termed as deterministic
network.
It is built up activities oriented
diagram.
One time estimate is possible for
activities ( no allowance is mode for
uncertainty).
Times are related to cost.
Used for repetitive works such as
constructional
activities,
maintenance/overhauling repair and
production, control, planning and
scheduling are done through CPM

Event
An event is a particular instant in time showing
the end or beginning of an activity. It is a point
of accomplishment or decision. This does not
consume resources. An activity is bounded by
two events.
3
Event
Burst Event

Dr. Md. Mamunur Rashid, 2014

Merge chart

Activity
An activity represents efforts applied over a
period of time which has a definite beginning
and end.
10

INSTALL LATHE

Succeeding Event

Preceding
event

Activity is the actual performance of a

task. This consumes resources i.e time,
manpower, space, material and money.
Dr. Md. Mamunur Rashid, 2014

Dummy Activity
Some times an arrow to be used merely to
represent dependency of one activity over
another where as the arrow itself does not
represent any expenditure of resources or
time. Dummies are generally represented
by dotted arrows or solid arrows with
zero time durations.
0
or
Activity Dummy

Dr. Md. Mamunur Rashid, 2014

Activity Dummy

Network Representation
Activity on Arrow

Activity on Node

B
Q

P
P

R
L

L
M

B
A
C

A
D

B
D

CPM Network Conventions

I

IV

II

1
b

1
c

V
a

III

1
b

VI

1
Dr. Md. Mamunur Rashid, 2014

Rule-1 :Project Network Diagram

In a project network diagram, Each activity shall be
represented by a Box as follows:
A-Activity
Description
ES-Earliest
start
LSLatest start

Dr. Md. Mamunur Rashid, 2014

C-Code
DEF-Earliest finish
Duration
of activity
S-Slack
LF-Latest finish

Rule-2
Each arrow
will indicate the
relationship among the activities . Arrowhead
indicates the relationship with preceding
activity.

Dr. Md. Mamunur Rashid, 2014

CPM/PERT network for the Bank Project

Let us draw CPM/PERT network for the bank
project as discussed earlier, using the above
symbols which is shown in figure 3:
Locate
facilities

Furniture
received
and setup

Order
furniture

Beginning of
the project

Remodel
Move in
Interview

Dr. Md. Mamunur Rashid, 2014

Hire and
Train

Let us consider the Bank project again for analysis with deterministic time.
Activity relationship and their estimated duration are shown in Below
LF

SF

Fr

5
6

7
3

Furniture
received

M 8
S1
0

R 6
11

LF-Locate
facilities

SF-Select
Furniture

M-Move in

R-Remodel

I 3
S-Begin or start
of the project

H 4
I-interview

9
Hire and
train

CPM/PERT Network for the Bank Project

LF-Locate facilities
LF

SF

0 8 8

S1
000

Fr

8 6

14

SF-Select
Furniture

R6
8 11 19

14

7
17
3

Furniture
received

M 8
M-Move in

19

20

R-Remodel

I 3
S-Begin or start
of the project

0 4 4

H 4
I-interview

13

Hire and
train

CPM/PERT Network for the Bank Project

SF-Select
Furniture

LF-Locate
facilities

LF

SF

0 8 8
0 0 8

Furniture
Fr

8 6

14

10

16

14
16

7
3
2

received
17
19

M8

R-Remodel

S1
000

R 6
8

11

19

000

19

M-Move in

I 3

of the project

0 4 4
6

20

19

20

H 4

S-Begin or start

Dr. Md. Mamunur Rashid, 2014

19

10

I-interview

13

10

19

Hire and
train

Gantt Charts
Duration weeks
8
0
Cod

Activity

Lf

Sf

Fr

20

14
10

12

16

18

Time Cost Trade- Offs

The procedure of finding this point consists of the following
steps:
Prepare a CPM/PERT network diagram and estimate:
Normal cost (NC) : the lowest expected activity cost.
Normal time (NT): the time associated with each normal
cost.
Crash time (CT): The shortest possible activity time.
Crash Cost (CC) : the cost associated with each crash time.
Determine the cost per unit of time per unit of time to
expedite each activity
Compute the critical path
Shorten the critical path at the least cost.
Plot project direct, indirect and total cost curves and find the
minimum cost schedule.
Dr. Md. Mamunur Rashid, 2014

Time Cost Trade- Offs

Code

Activity

NT

NC

CT

CC

Slope

Lf

3000

4000

500

5000

6000

1000

30000

Sf

50000

60000

5000

11

75000

87000

4000

Fr

1500

2500

500

10000

Slope is the cost rise per week = (CC-NC)/ (NT-CT)

Dr. Md. Mamunur Rashid, 2014

If the indirect cost is Tk. 500 per week,

what would be the minimum cost
schedule for the above Project?
Step-1, Normal cost of this project

=Total direct cost+ Total indirect cost

=Tk.174,500/- + 20X500=Tk.184500/-

Dr. Md. Mamunur Rashid, 2014

If the indirect cost is Tk. 500 per week, what

would be the minimum cost schedule for the
above Project? (contd)

Step-2
Total cost of this project
=Total direct cost+ Total indirect cost
=Tk.175,500/- + 18X500=Tk.184500/ So, the project duration can be 18 weeks
instead of 20 weeks.
Dr. Md. Mamunur Rashid, 2014

Problem (contd)
Step-3,
If we want to reduce the project duration
further by one more week, we have no other
alternative but to crash activity 6 that will
rise the activity direct cost to Tk. 4000 per
week, but the project indirect will go down
by only Tk.500 and the overall cost will be
increased to Tk. 195,000/-.
Total cost of this project
=Total direct cost+ Total indirect cost
=Tk.186,500/- + 17X500=Tk.195000/-.

Problem (contd)
Step-4
if any critical activity is delayed by 1 week for
any reason beyond the normal schedule of
20 weeks, the project indirect cost will go
up as follows:
Total cost of this project
=Total direct cost+ Total indirect cost
=Tk.174,500/- + 21X500=Tk.185000/-.
So, optimum project duration should be 18
weeks at minimum cost of Tk.184,500/-

Probabilistic Time Estimates

The probabilistic approach involves three
times estimates for each activity instead of
one:
1. Optimistic time: The length of time
required under optimum conditions;
represented the letter to.
2. Pessimistic time : The length of time
required under the worst conditions;
represented by the letter tp.
3. Most likely time: the most probable
amount of time required, represented the
letter tm.
Dr. Md. Mamunur Rashid, 2014

Probabilistic Time Estimates

(contd)

These time estimate can be made by

managers or others with knowledge about
the project.
Network analysis uses the average or
expected time for each activity Te and the
2
variance of each activity time . The
expected time is computed as a weighted
average of the three time estimates.
Te= (to+ 4tm +tp)/6

Probabilistic Time Estimates (contd)

The variance is found by squaring the
standard deviation.
2
Thus, =[(tp-to)/ 6 ]2 or
=(tp-to)2/36

Pessim. - Optim. 2
)
Activity variance, = (
6
2

Dr. Md. Mamunur Rashid, 2014

Probabilistic Time Estimates

cp =[(variances

critical path )]

1/2

of

activities

(contd)

on

Probabilistic Time Estimates

(contd)

0
Activity start

to
Optimistic time

Dr. Md. Mamunur Rashid, 2014

tm te
Most likely time
( mode)

tp

Pessimistic
time

Table-2 Showing optimistic, most likely and

pessimistic time estimate
Code

Activity to

tm

tp

Te

1
2
3
4
5
6
7
8

S
Lf
I
H
Sf
R
Fr
M

0
8
4
9
6
11
3
1

0
10
5
10
7
12
4
1

0
8
4
9
6
11
3
1

0
6
3
8
5
10
2
1

cp
0.0
0.66
0.33
0.33
0.33
0.33
0.33
0.0

3.2.5 Probabilistic Time Estimates (contd)

Now, let us calculate Te and cp for

each of the project activity as shown in the
above table.
A unique feature of probabilistic approach
is that it enables the analyst to assess the
effect of uncertainty on project completion
time. :

Probabilistic Time Estimates (contd)

Z transformation formula.
Z=

D - TE

2
cp

where, D= schedule or due date of the project

TE=Earliest expected completion time for
last activity
2
cp = Sum of the variances along the critical
path

Probabilistic Time Estimates

(contd)

For example, if the vice president of the

bank would like to know the probability of
completing the project by 22 weeks?
We Know, D=22 , Te=20; cp =0.99
Z=(22-20)/0.99=2.02
Now from normal probability table for
Z=2.02 the probability of completing the
project is 0.9783 that is 97.83%.

Thanks for your attentions !

34