Project Management -

CPM/PERT

Atanu Mandal
Professor
SIBM – Pune, Lavale Campus
 What exactly is a project?
PM 1 – I’m in charge of the construction of a retail development in the centre of a large town.
There are 26 retail units and a super market in the complex. My main responsibilities are to co-
ordinate the work of the various contractors to ensure that the project is completed to
specification, within budget and on time.

PM 2 – I am directing a team of research scientists. We are running trials on a new analgesic

drug on behalf of a pharmaceutical company. It is my responsibility to design the experiments
and make sure that proper scientific and legal procedures are followed, so that our results can
be subjected to independent statistical analysis.

PM 3- The international aid agency which employs me is sending me to New Delhi to organize
the introduction of multimedia resources at a teachers’ training college. My role is quite
complex. I have to make sure that appropriate resources are purchased- and in some cases
developed within the college. I also have to encourage the acceptance of these resources by
lecturers and students within the college.

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PM 1 – I’m in charge of the construction of a retail development in the centre of a large town.
There are 26 retail units and a super market in the complex. My main responsibilities are to co-
ordinate the work of the various contractors to ensure that the project is completed to
specification, within budget and on time.

PM 2 – I am directing a team of research scientists. We are running trials on a new analgesic

drug on behalf of a pharmaceutical company. It is my responsibility to design the experiments
and make sure that proper scientific and legal procedures are followed, so that our results can
be subjected to independent statistical analysis.

PM 3- The international aid agency which employs me is sending me to New Delhi to organize
the introduction of multimedia resources at a teachers’ training college. My role is quite
complex. I have to make sure that appropriate resources are purchased- and in some cases
developed within the college. I also have to encourage the acceptance of these resources by
lecturers and students within the college.

Project is defined by the type of outcome it is set up to achieve

Atanu Mandal/SIBM 3
 Project
A project is a temporary endeavour involving a connected sequence of
activities and a range of resources, which is designed to achieve a specific
and unique outcome and which operates within time, cost and quality
constraints and which is often used to introduce change.

Characteristic of a project
 A unique, one-time operational activity or effort

 Requires the completion of a large number of interrelated activities

 Established to achieve specific objective

 Resources, such as time and/or money, are limited

 Typically has its own management structure

 Need leadership
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Examples
• constructing houses, factories, shopping malls, athletic
stadiums or arenas
• developing military weapons systems, aircrafts, new
ships
• launching satellite systems
• constructing oil pipelines
• developing and implementing new computer systems
• planning concert, football games, or basketball
tournaments
• introducing new products into market

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What is project management

• The application of a collection of tools and techniques

to direct the use of diverse resources towards the
accomplishment of a unique, complex, one time task
within time, cost and quality constraints.
• Its origins lie in World War II, when the military
authorities used the techniques of operational research
to plan the optimum use of resources.
• One of these techniques was the use of networks to
represent a system of related activities

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Project Management Process
• Project planning
• Project scheduling
• Project control
• Project team
• made up of individuals from various areas and
departments within a company
• Matrix organization
• a team structure with members from functional
areas, depending on skills required
• Project Manager
• most important member of project team

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Project Management Process

• Scope statement
• a document that provides an understanding,
justification, and expected result of a project
• Statement of work
• written description of objectives of a project
• Organizational Breakdown Structure
• a chart that shows which organizational units
are responsible for work items
• Responsibility Assignment Matrix
• shows who is responsible for work in a project
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Work breakdown structure
• A method of breaking down a project into individual
elements ( components, subcomponents, activities and
tasks) in a hierarchical structure which can be scheduled
and cost
• It defines tasks that can be completed independently of
other tasks, facilitating resource allocation, assignment
of responsibilities and measurement and control of the
project
• It is foundation of project planning
• It is developed before identification of dependencies
and estimation of activity durations
• It can be used to identity the tasks in the CPM and PERT

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Work Breakdown Structure for Computer Order
Processing System Project

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Project Planning
• Resource Availability and/or Limits
• Due date, late penalties, early completion incentives
• Budget
• Activity Information
• Identify all required activities
• Estimate the resources required (time) to complete each
activity
• Immediate predecessor(s) to each activity needed to create
interrelationships

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Project Scheduling and Control Techniques
Gantt Chart
Critical Path Method (CPM)
Program Evaluation and Review Technique (PERT)

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 Gantt Chart
Graph or bar chart with a bar for each project activity that shows passage of time
Provides visual display of project schedule

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History of CPM/PERT
• Critical Path Method (CPM)
• E I Du Pont de Nemours & Co. (1957) for construction of new
chemical plant and maintenance shut-down
• Deterministic task times
• Activity-on-node network construction
• Repetitive nature of jobs
• Project Evaluation and Review Technique (PERT)
• U S Navy (1958) for the POLARIS missile program
• Multiple task time estimates (probabilistic nature)
• Activity-on-arrow network construction
• Non-repetitive jobs (R & D work)

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 Project Network
• Network analysis is the general name given to certain specific techniques which can be
used for the planning, management and control of projects

• Use of nodes and arrows

Arrows  An arrow leads from tail to head directionally
• Indicate ACTIVITY, a time consuming effort that is required to perform a
part of the work.
Nodes  A node is represented by a circle
- Indicate EVENT, a point in time where one or more activities start and/or
finish.
• Activity
– A task or a certain amount of work required in the project
– Requires time to complete
– Represented by an arrow
• Dummy Activity
– Indicates only precedence relationships
– Does not require any time ofAtanu
effort
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 Project Network
• Event
• Signals the beginning or ending of an activity
• Designates a point in time
• Represented by a circle (node)
• Network
• Shows the sequential relationships among activities using
nodes and arrows

Activity-on-node (AON)
nodes represent activities, and arrows show precedence relationships
Activity-on-arrow (AOA)
arrows represent activities and nodes are events for points in time

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AOA Project Network for House
3
Lay foundation Dummy
2 0 Build Finish
3 1 house work
1 2 4 6 7
Design house Order and 3 1
and obtain receive Select 1 1 Select
financing materials paint carpet
5

AON Project Network for House

Lay foundations Build house
2 4
Finish work
2 3
7
Start 1 1
3
Design house and 6
3
obtain financing 5 1
1
1 Select carpet
Order and receive
Select paint
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materials
 Situations in network diagram
B
A
A must finish before either B or C can start

C
A
C both A and B must finish before C can start

A
C both A and C must finish before either of B or D can start

B
D

A
B
A must finish before B can start
Dummy both A and C must finish before D can start

C
D Atanu Mandal/SIBM 18
Concurrent Activities

3
Lay foundation Lay
Dummy
foundation
2 0
2 3
1
Order material 2 4
Order material

(a) Incorrect precedence (b) Correct precedence

relationship relationship

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Network example
Illustration of network analysis of a minor redesign of a product and its associated
packaging.

The key question is: How long will it take to complete this project ?

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For clarity, this list is kept to a minimum by specifying only immediate relationships, that
is relationships involving activities that "occur near to each other in time".

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Questions to prepare activity network
• Is this a Start Activity?
• Is this a Finish Activity?
• What Activity Precedes this?
• What Activity Follows this?
• What Activity is Concurrent with this?

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CPM calculation
• Path
• A connected sequence of activities leading from the
starting event to the ending event
• Critical Path
• The longest path (time); determines the project duration
• Critical Activities
• All of the activities that make up the critical path

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Forward Pass
• Earliest Start Time (ES)
• earliest time an activity can start
• ES = maximum EF of immediate predecessors
• Earliest finish time (EF)
• earliest time an activity can finish
• earliest start time plus activity time
EF= ES + t

Backward Pass
Latest Start Time (LS)
Latest time an activity can start without delaying critical path time
LS= LF - t
Latest finish time (LF)
latest time an activity can be completed without delaying critical path time
LS = minimum LS of immediate predecessors

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CPM analysis
• Draw the CPM network
• Analyze the paths through the network
• Determine the float for each activity
• Compute the activity’s float
float = LS - ES = LF - EF
• Float is the maximum amount of time that this activity can be
delayed in its completion before it becomes a critical activity,
i.e., delays completion of the project
• Find the critical path is that the sequence of activities and events
where there is no “slack” i.e.. Zero slack
• Longest path through a network
• Find the project duration is minimum project completion time

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