Project Scheduling:

PERT/CPM
JQY
 PERT
• PERT stands for Program (or Project) Evaluation Review
Technique
• It was developed in the late 1950s by the US Navy for the Polaris
missile project.
• It is developed to handle uncertain activity times.

CPM
• CPM stands for Critical Path Method
• Developed originally by DuPont and Remington Rand.
• It is developed for industrial projects for which activity times are
known for certain and where variability is not a concern.

Today’s project management software packages have combined the best

features of both approaches. Therefore, there is no need to distinguish PERT
from CPM and hence we call it PERT/CPM
 PERT/CPM
• PERT/CPM is used to plan the scheduling of
individual activities that make up a project.
• Projects may have as many as several thousand
activities.
• A complicating factor in carrying out the activities is
that some activities depend on the completion of
other activities before they can be started.
 Common applications for PERT and CPM
• Research and development of new products and processes.
• Construction of plants, buildings, and highways.
• Maintenance of large and complex equipment.
• Design and installation of new systems.

Questions that PERT and CPM can answer:

• What is the total time to complete the project?
• What are the scheduled start and finish dates for each specific
activity?
• Which activities are critical and must be completed exactly as
scheduled to keep the project on schedule?
• How long can “noncritical” activities be delayed before they cause an
increase in the total project completion time?
 Project Network
• A project network can be constructed to model the
precedence of the activities.
• The nodes of the network represent the activities.
• The arcs of the network reflect the precedence
relationships of the activities.
• A critical path for the network is a path consisting
of activities with zero slack.
• The difference between the latest and earliest start
(or finish) time for each activity is the slack.
• Activities with no slack are critical activities.
 PERT/CPM Example:
Activity Description Predecessor Time
A Prepare architectural drawings None 5
B Identify potential new tenants None 6
C Develop prospectus for tenants A 4
D Select a contractor A 3
E Prepare building permits A 1
F Obtain approval for building permits E 4
G Perform construction D, F 14
H Finalize contracts with tenants B, C 12
I Tenants move in G, H 2
• What is the expected time to finish the project?
• What critical activities constitute the critical path?
• What are the slack times associated with each activity?
Step 4: Develop a Network Diagram

Early Start Duration Early Finish

Task Name
Late Start Slack Late Finish
Step 5: Make a Forward Pass (1)
Early Start Duration Early Finish Methodology:
Task Name • Activities at the beginning of
Late Start Slack Late Finish the process have an early
start time of zero.
• The early finish is the early
start plus the activity’s
duration.
• The early finish of the
predecessor is the early
start of the succeeding
activity.
• If an activity has multiple
predecessors, its early start
is the latest early finish of
the predecessors.
• The early finish of the last
activity is the expected
completion time of the
project.
Step 5: Make a Forward Pass (2)

Early Start Duration Early Finish

Task Name
Late Start Slack Late Finish
Step 6: Make a Backward Pass (1)
Early Start Duration Early Finish Methodology:
Task Name
Late Start Slack Late Finish
• The expected project
completion time is also
the latest finish of the last
activity.
• The latest start is the
latest finish minus the
activity’s duration.
• The latest start of the
succeeding activity is the
latest finish of the
predecessor.
• If an activity has multiple
successors, its late finish is
the earliest late start of
the predecessors.
 Step 6: Make a Backward Pass (2)
• Backward Pass: Final Diagram

Early Start Duration Early Finish

Task Name
Late Start Slack Late Finish
 Finding the Slack and Critical Path
The slack time is the difference between the late start and early start, or late finish
and early finish.
The critical path consist of activities with zero slack time.

Early Start Duration Early Finish

Task Name
Late Start Slack Late Finish
Alternative Solution (1):
Alternative Solution (2):
 LP Solution:
• You have to convert activities into arrows, and formulate an entirely
new network diagram.
• Nodes (or circles) are constraints and arrows (activities) are variables.
 Uncertain Activity Times
• PERT allows for uncertainty in project completion times.
• For each activity, obtain three time estimates:
• Most Optimistic Time (if everything happens perfectly as planned)
• Most Likely Time (the most probable time under actual conditions)
• Most Pessimistic Time (if significant delays occur)
• In the three-time estimate approach, the time to complete
an activity is assumed to follow a Beta distribution.
• An activity’s mean completion time is:
𝑡𝑜𝑝𝑡𝑖𝑚𝑖𝑠𝑡 + 4𝑡𝑙𝑖𝑘𝑒𝑙𝑦 + 𝑡𝑝𝑒𝑠𝑠𝑖𝑚𝑖𝑠𝑡
𝑡𝑒𝑥𝑝 =
6
• An activity ‘s completion time variance is:
𝑡 − 𝑡 2
2 𝑝𝑒𝑠𝑠𝑖𝑚𝑖𝑠𝑡 𝑜𝑝𝑡𝑖𝑚𝑖𝑠𝑡
𝜎 =
6
 Uncertain Activity Time Example:
Activity Predecessor Optimistic Probable Pessimistic Expected
A -- 4 6 8 6
B -- 1 4.5 5 2
C A 3 3 3 3
D A 4 5 6 5
E A 0.5 1 1.5 3
F B, C 3 4 5 2
G B, C 1 1.5 5 3
H E, F 5 6 7 4
I E,F 2 5 8 2
J D, H 2.5 2.75 4.5 2
K G, I 3 5 7
Uncertain Activity Time Requirements:
• What is the average (expected) time and variance for
each activity?
• What is the slack for each activity?
• What is the critical path?
• What is the project completion time?
• What is the probability the project will be completed
within 24 hours?
Solutions page
Solutions page
Solutions page
Solutions page
 PERT/Cost
• PERT/Cost is a technique for monitoring costs during a
project.
• Work packages (groups of related activities) with estimated
budgets and completion times are evaluated.
• A cost status report may be calculated by determining the
cost overrun or underrun for each work package.
• Cost overrun or underrun is calculated by subtracting the
budgeted cost from the actual cost of the work package.
• For work in progress, overrun or underrun may be
determined by subtracting the prorated budget cost from
the actual cost to date.
• The overall project cost overrun or underrun at a particular
time during a project is determined by summing the
individual cost overruns and underruns to date of the work
packages.
 Consider the table below:
Activity Actual Cost % Complete
A P6,200,000 100
B 5,700,000 100
C 5,600,000 90
D 0 0
E 1,000,000 25
F 5,000,000 75
G 2,000,000 50
H 0 0
I 0 0
J 0 0

• Assuming a budgeted cost of P6000,000 for each activity, compute for

the cost overrun or underrun.
 Crashing the Network
• Resources are focused on activities in the critical path in an effort to
reduce the project completion time. Reducing the time needed to
perform critical activities is called “crashing” the network.
• Benefits from crashing must be weighed against its costs
• If a big enough reduction is effected, other paths can become the new
critical paths. Because of this, there is a possibility that crashing will
the activity any further will not result in further time savings
What are examples of crashing the network?
• Scheduling overtime shifts
• Hiring temporary staff
• Run machines harder (incurring more maintenance and depreciation)
• Buying new equipment
• Paying suppliers or logistics companies more for a “rush” order
 Example:
0 7 7 7 3 10
A: Overhaul Machine 1 B: Adjust Machine 1
0 0 7 7 0 10

Early Start Duration Early Finish 10 2 12

Start Task Name E: Test System Finish
Late Start Slack Late Finish 10 0 12

0 6 6 6 3 9
C: Overhaul Machine 2 D: Adjust Machine 2
1 1 7 7 1 10

Normal Crash Time Normal Cost with Time Crash Crash

Activity Time Cost Crash Savings Costs Cost/Day

A 7 4 500 800 3 300 100

B 3 2 200 350 1 150 150
C 6 4 500 900 2 400 200
D 3 1 200 500 2 300 150
E 2 1 300 600 1 300 300
 Crashing the Network
• What is the best way to crash the total project time to 10 days?
Additional Problems
 Additional Problem 1
Activity Description Immediate Predecessor Time (weeks)
A Survey building site -- 6
B Develop initial design -- 8
C Obtain board approval A, B 12
D Select architect C 4
E Establish budget C 6
F Finalize design D, E 15
G Obtain financing E 12
H Hire contractor F, G 8
• Requirement 1: Draw a project network.
• Requirement 2: Identify the critical path.
• Requirement 3: Develop the activity schedule for the project.
• Requirement 4: Does it appear reasonable that construction of the
athletic complex could begin one year after the decision to begin the
project with the site survey and initial design plans? What is the
expected completion time for the project?
Solutions Page for Additional Problem 1
Solutions Page for Additional Problem 1
Solutions Page for Additional Problem 1
Solutions Page for Additional Problem 1
 Additional Problem 2
Activity Optimistic Most Probable Pessimistic
A 4.0 5.0 6.0
B 8.0 9.0 10.0
C 7.0 7.5 11.0
D 7.0 9.0 10.0
E 6.0 7.0 9.0
F 5.0 6.0 7.0

• Requirement 1: Compute the expected activity completion

times and the variance for each activity
• Requirement 2: An analyst determined that the critical path
consists of activities B-D-F. Compute the expected project
completion time and the variance of this path.
Solutions Page for Additional Problem 2
Solutions Page for Additional Problem 2
 Additional Problem 3
• Building a backyard swimming pool consists of nine major activities.
The activities and their immediate predecessors are shown below:
Activity A B C D E F G H I
Immediate Predecessor -- -- A, B A, B B C D D, F E, G, H

• Further assume that the activity time estimates (in days) for the
swimming pool construction project are as follows:
Activity Optimistic Most Probable Pessimistic
A 3 5 6
B 2 4 6
C 5 6 7
D 7 9 10
E 2 4 6
F 1 2 3
G 5 8 10
H 6 8 10
I 3 4 5
 Additional Problem 3
• Requirements:
1. Develop the project network.
2. What are the critical activities?
3. What is the expected time to complete the project?
4. Based only on the critical path, what is the estimated probability
that the project can be completed in 25 or fewer days?
Solutions Page for Additional Problem 3
Solutions Page for Additional Problem 3
Solutions Page for Additional Problem 3
Solutions Page for Additional Problem 3