CPM & PERT

Prepared for Operational Research

Crystal Britto Fenil Jiwani Kirthika Nadar

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Nikhil Vinchurkar Sudarshan Tare Sunil Dhake

FLOW OF PRESENTATION
Introduction to CPM & PERT History Comparision between CPM & PERT What is Crashing ? Example on Crashing and Pert Benefits/Advantages Limitations/Disadvantages Applications/uses of CPM/PERT Case Study

WHAT IS CPM/PERT?
Critical path method and Project evaluation review technique are the methods to estimate the tentative durations for completing a project.

These techniques help project managers to handle the complexity and time based nature of the project.

HISTORY
CPM developed by Morgan R Walker of Du Pont in 1950. Emphasis- Trade off between the cost of the project and its overall completion time.

PERT developed by Booz Allen Hamilton and The US Navy for planning and control of the Polaris missile program. Emphasis- Completing the program in the shortest possible time

CPM - CRITICAL PATH METHOD

Definition: The critical path method (CPM) is a step-by-step technique for process planning that defines critical and noncritical tasks with the goal of preventing time-frame problems and process bottlenecks
y y

Single estimate of activity time Deterministic activity times

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

PERT PROJECT EVALUATION & REVIEW TECHNIQUES

Definition: PERT is a method to analyze the involved tasks in

completing a given project, especially the time needed to complete each task, and to identify the minimum time needed to complete the total project.
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.

EMPHASIS ON LOGIC IN NETWORK CONSTRUCTION

Construction of network should be based on logical or technical dependencies among activities Example - before activity Approve Drawing can be started, the activity Prepare Drawing must be completed Common error build network on the basis of time logic (a feeling for proper sequence ) see example below

WRONG !!!

CORRECT 
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3 POINT ESTIMATES FOR PERT

CRITICAL PATH
Longest path through a network. Is that the sequence of activities and events where there is no slack i.e.. Zero slack Determines the total time required to complete the project

COMPARISON BETWEEN CPM AND PERT

CPM 1 Uses network, calculate float or slack, identify critical path and activities, guides to monitor and controlling project 2 Uses one value of activity time 3 Used where times can be estimated with confidence, familiar activities 4 Minimizing cost is more important 5 Focuses on time and cost 6 Example: construction projects, building one off machines, ships, etc PERT Uses network, calculate total estimate & variance, identify critical path and activities, guides to monitor and controlling project Requires 3 estimates of activity time Calculates mean and variance of time Used where times cannot be estimated with confidence. Unfamiliar or new activities Meeting time target or estimating percent completion is more important Focuses only on time Example: Involving new activities or products, research and development 10 etc

QUESTIONS ANSWERED BY CPM & PERT

Completion date? On Schedule? Within Budget? Critical Activities? How can the project be finished early at the least cost?

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WHAT IS CRASHING?

Project crashing is a method for shortening the project duration by reducing the time of one or more of the critical project activities to less than its normal activity time. The objective of crashing is to reduce project duration at minimum cost.

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EXAMPLE:
Activity Precedin Normal g Time Activity B B A A F C,E,G F 3 8 6 5 13 4 2 6 2 Crash Time 2 6 4 2 10 4 1 4 1 Normal Cost 18000 600 10000 4000 3000 15000 1200 3500 7000 Crash Cost 19000 1000 12000 10000 9000 15000 1400 4500 8000
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A B C D E F G H I

Draw a project network diagram and find critical path. If a deadline of 17 weeks is imposed for completion of the project, what activities will be crashed, What would be the additional cost, and what would be the critical activities of the network after crashing?

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NETWORK

1-2-4-6 1-2-4-5-6 1-2-5-6 1-3-5-6 1-3-6

A-F-I =9 A-F-G-H=15 A-E-H=22 CRITICAL PATH B-C-H =20 B-D =13

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FORMULA

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Activity A B C D E F G H I

Path 1-2 1-3 3-5 3-6 2-5 2-4 4-5 5-6 4-6

Crashing Cost (rs) 1000 200 1000 2000 2000 200 500 1000
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Total cost= Normal cost + crash cost 62300+6200 =68500

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PERT

The owner of a chain of a fast food restaurants is considering a new computer system for accounting and inventory control. A computer company sent the following information about the system installation

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Activit Description y

predecess or

A B C D E F G H I

Select the comp model Design I/O system Design monitoring system Assemble computer hardware Develop the main programmes Develop I/O routines Create database Install the system Test & Implement

A A B B C E D,F G,H

4 5 4 15 10 8 4 1 6

6 7 8 20 18 9 8 2 7

8 15 12 25 26 16 12 3 8
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Construct an arrow diagram for this problem Determine the critical path and complete the expected project completion time. Determine the probability of completing the proje ct in 55 days

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Activi Path ty A B C D E F G H I 1-2 2-3 2-4 3-6 3-5 4-6 5-7 6-7 7-8

To 4 5 4 15 10 8 4 1 6

Tm 6 7 8 20 18 9 8 2 7

Tp 8 15 12 25 26 16 12 3 8

Te 6 8 8 20 18 10 8 2 7 0.66 1.66 1.33 1.66 2.66 1.33 1.33 0.33 0.33 0.4356 2.7556 1.7689 2.7556 7.0756 1.7689 1.7689 0.1089 0.1089
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1-2-3-5-7-8 6+8+18+8+7=47 critical path X=47 U=55 =3.496

FORMULA

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The area between mean and z=2.89 0.5+0.4981=0.9981

BENEFITS OF CPM/PERT
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Breakdown project into component tasks Forecast and Analyze Possibilities Focused and Disciplined Improved Communication

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LIMITATIONS

There can be potentially hundreds or thousands of activities and individual dependency relationships PERT is not easily scalable for smaller projects The network charts tend to be large and unwieldy requiring several pages to print and requiring special size paper The lack of a timeframe on most PERT/CPM charts makes it harder to show status although colors can help (e.g., specific color for completed nodes) When the PERT/CPM charts become unwieldy, they are no longer used to manage the project.

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Packages are available to determine the shortest path and other relevant information.

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Data entry window

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Output of the package

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Applications of CPM & PERT

1. Construction of a new plant. 2. Research and development of a new product. 3. NASA space exploration projects. 4. Movie productions. 5. Building of a ship. 6. Government-sponsored projects for developing a new weapons system. 7. Relocation of a major facility. 8. Maintenance of a nuclear reactor. 9. Installation of a management information system. 10. Conducting an advertising campaign.
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CASE STUDY
The Reliable Construction Company has just made the winning bid of $5.4 million to construct a new plant for a major manufacturer. The manufacturer needs the plant to go into operation within a year. Therefore, the contract includes the following provisions:

A penalty of $300,000 if Reliable has not completed construction by the deadline 47 weeks from now. To provide additional incentive for speedy construction, a bonus of $150,000 to be paid to Reliable if the plant is completed within 40 weeks.

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CONT
Reliable assigned its best construction manager, David Perty, to this project to help ensure that it stays on schedule. In order to schedule the activities, Mr. Perty consults with each of the crew foremen to develop an estimate of how long each activity should take when it is done in the normal way. Adding up these times gives a grand total of 79 weeks, which is far beyond the deadline for the project. Fortunately, some of the activities can be done in parallel, which substantially reduces the project completion time.

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Activity List for the Reliable Construction Co. Project

Activity A B C D E F G H I J K L M N Activity Description Excavate Lay the foundation Put up the rough wall Put up the roof Install the exterior plumbing Install the interior plumbing Put up the exterior siding Do the exterior painting Do the electrical work Put up the wallboard Install the flooring Do the interior painting Install the exterior fixtures Install the interior fixtures Immediate Predecessors A B C C E D E, G C F, I J J H K, L Estimated Duration 2 weeks 4 weeks 10 weeks 6 weeks 4 weeks 5 weeks 7 weeks 9 weeks 7 weeks 8 weeks 4 weeks 5 weeks 2 weeks 34 6 weeks

CONCLUSION

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REFERENCES

http://en.wikipedia.org/wiki/Program_Evaluation _and_Review_Technique http://dl.acm.org/citation.cfm Quantative Techniques in Management by N. D. VOHRA http://www.mindtools.com/critpath.html

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Thank you

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WISH YOU ALL A VERY HAPPY PONGAL

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