SRI VIDYA COLLEGE OF ENGINEERING AND TECHNOLOGY COURSE MATERIAL (LECTURE NOTES)

2.1 Introduction to CPM / PERT Techniques

2.2 Applications of CPM / PERT
2.3 Basic Steps in PERT / CPM
2.4 Frame work of PERT/CPM
2.5 Network Diagram Representation
2.6 Rules for Drawing Network Diagrams
2.7 Common Errors in Drawing Networks
2.8 Advantages and Disadvantages
2.9 Critical Path in Network Analysis

2.1 Introduction to CPM / PERT Techniques

CPM/PERT or Network Analysis as the technique is sometimes called, developed along

two parallel streams, one industrial and the other military.

CPM (Critical Path Method) was the discovery of M.R.Walker of E.I.Du Pont de
Nemours & Co. and J.E.Kelly of Remington Rand, circa 1957. The computation was
designed for the UNIVAC-I computer. The first test was made in 1958, when CPM was
applied to the construction of a new chemical plant. In March 1959, the method was
applied to maintenance shut-down at the Du Pont works in Louisville, Kentucky.
Unproductive time was reduced from 125 to 93 hours.

PERT (Project Evaluation and Review Technique) was devised in 1958 for the
POLARIS missile program by the Program Evaluation Branch of the Special Projects
office of the U.S.Navy, helped by the Lockheed Missile Systems division and the
Consultant firm of Booz-Allen & Hamilton. The calculations were so arranged so that
they could be carried out on the IBM Naval Ordinance Research Computer (NORC) at
Dahlgren, Virginia.

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SRI VIDYA COLLEGE OF ENGINEERING AND TECHNOLOGY COURSE MATERIAL (LECTURE NOTES)

The methods are essentially network-oriented techniques using the same principle.
PERT and CPM are basically time-oriented methods in the sense that they both lead to
determination of a time schedule for the project. The significant difference between two
approaches is that the time estimates for the different activities in CPM were assumed to
be deterministic while in PERT these are described probabilistically. These techniques
are referred as project scheduling techniques.

In CPM activities are shown as a network of precedence relationships using activity-on-

node network construction

– Single estimate of activity time

– Deterministic activity times

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

In PERT activities are shown as a network of precedence relationships using activity-on-

arrow network construction

– 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.

Benefits of PERT/CPM

 Useful at many stages of project management

 Mathematically simple

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SRI VIDYA COLLEGE OF ENGINEERING AND TECHNOLOGY COURSE MATERIAL (LECTURE NOTES)

 Give critical path and slack time

 Provide project documentation

 Useful in monitoring costs

Limitations of PERT/CPM

 Clearly defined, independent and stable activities

 Specified precedence relationships

 Over emphasis on critical paths

2.2 Applications of CPM / PERT

These methods have been applied to a wide variety of problems in industries and have
found acceptance even in government organizations. These include
 Construction of a dam or a canal system in a region
 Construction of a building or highway
 Maintenance or overhaul of airplanes or oil refinery
 Space flight
 Cost control of a project using PERT / COST
 Designing a prototype of a machine
 Development of supersonic planes

2.3 Basic Steps in PERT / CPM

Project scheduling by PERT / CPM consists of four main steps

1. Planning

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SRI VIDYA COLLEGE OF ENGINEERING AND TECHNOLOGY COURSE MATERIAL (LECTURE NOTES)

 The planning phase is started by splitting the total project in to small projects.
These smaller projects in turn are divided into activities and are analyzed by the
department or section.
 The relationship of each activity with respect to other activities are defined and
established and the corresponding responsibilities and the authority are also
stated.
 Thus the possibility of overlooking any task necessary for the completion of the
project is reduced substantially.

2. Scheduling
 The ultimate objective of the scheduling phase is to prepare a time chart showing
the start and finish times for each activity as well as its relationship to other
activities of the project.
 Moreover the schedule must pinpoint the critical path activities which require
special attention if the project is to be completed in time.
 For non-critical activities, the schedule must show the amount of slack or float
times which can be used advantageously when such activities are delayed or when
limited resources are to be utilized effectively.

3. Allocation of resources
 Allocation of resources is performed to achieve the desired objective. A resource
is a physical variable such as labour, finance, equipment and space which will
impose a limitation on time for the project.
 When resources are limited and conflicting, demands are made for the same type
of resources a systematic method for allocation of resources become essential.
 Resource allocation usually incurs a compromise and the choice of this
compromise depends on the judgment of managers.

4. Controlling

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SRI VIDYA COLLEGE OF ENGINEERING AND TECHNOLOGY COURSE MATERIAL (LECTURE NOTES)

 The final phase in project management is controlling. Critical path methods

facilitate the application of the principle of management by expectation to identify
areas that are critical to the completion of the project.
 By having progress reports from time to time and updating the network
continuously, a better financial as well as technical control over the project is
exercised.
 Arrow diagrams and time charts are used for making periodic progress reports. If
required, a new course of action is determined for the remaining portion of the
project.

2.4 The Framework for PERT and CPM

Essentially, there are six steps which are common to both the techniques. The procedure
is listed below:

I. Define the Project and all of its significant activities or tasks. The Project (made

up of several tasks) should have only a single start activity and a single finish
activity.

II. Develop the relationships among the activities. Decide which activities must
precede and which must follow others.

III. Draw the "Network" connecting all the activities. Each Activity should have
unique event numbers. Dummy arrows are used where required to avoid giving
the same numbering to two activities.

IV. Assign time and/or cost estimates to each activity

V. Compute the longest time path through the network. This is called the critical
path.

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