Operation Research management

A study on CPM and PERT

The Programme (Project) Evaluation and Review Technique (PERT) is a tool used to analyse how a project is
organised, scheduled, managed, and planned. This programme aids in comprehending the methodology of a
study needed to finish a project and determines the maximum and lowest amount of time needed to finish the
project in its entirety. PERT was created in the 1950s with the intention of estimating a project's duration and
cost.

The critical path method (CPM) is a step-by-step project management technique for process planning that
defines critical and non-critical tasks with the goal of preventing project schedule problems and process
bottlenecks. CPM is ideally suited to projects consisting of numerous activities that interact in a complex manner.

Key Difference Between PERT and CPM

PERT (Program Evaluation and Review Technique) and CPM (Critical Path Method) are two project management
techniques used to plan, schedule, and control complex projects. While they both aim to assist project managers
in effective project management, there are key differences between PERT and CPM in terms of their approach
and application. Let's delve into these distinctions:

1. Focus:

PERT: PERT focuses on managing time and resources in projects, particularly those with high uncertainty and risk.
It emphasizes estimating the duration of project activities and analyzing the impact of uncertainties on project
timelines.

CPM: CPM, on the other hand, primarily focuses on identifying the critical path in a project, which is the
sequence of activities that determine the project's overall duration. It aims to optimize project scheduling and
resource allocation.

2. Project Structure:

PERT: PERT is well-suited for projects with a non-linear or unpredictable flow of activities. It accommodates
activities that can occur in parallel or with varying durations. PERT employs a probabilistic approach, considering
optimistic, pessimistic, and most likely estimates for activity durations.

CPM: CPM is suitable for projects with a more structured and deterministic flow of activities. It assumes that
activity durations are fixed and known with certainty. CPM employs a deterministic approach, using specific
activity durations to determine project timelines.

3. Network Representation:

PERT: PERT represents a project as a network diagram, often using the Program Evaluation Review Technique
(PERT) chart. It visually displays the relationships and dependencies between activities, allowing for a
comprehensive view of the project's flow.

CPM: CPM also represents a project as a network diagram, typically using the Precedence Diagramming Method
(PDM) or arrow diagramming method. It illustrates the logical dependencies between activities and highlights the
critical path.

4. Time Estimation:
PERT: PERT incorporates three time estimates for each activity: optimistic, pessimistic, and most likely. These
estimates are then used to calculate expected activity durations and project timelines, considering the
uncertainties and risks associated with the project.

CPM: CPM relies on a single, deterministic estimate for each activity duration. It assumes that activity durations
are known with certainty and calculates project timelines based on these fixed durations.

5. Risk Management:

PERT: PERT includes a probabilistic approach that considers uncertainties and risks in project scheduling. It
provides a means to analyze the potential impact of these uncertainties on project timelines and allows for
contingency planning.

CPM: While CPM does not explicitly incorporate a probabilistic approach, it allows project managers to identify
the critical path, which helps identify the activities with the least flexibility and potential risks to the project
timeline. This information can aid in risk management and prioritizing activities

USAGE AND APPLICABILITY

Both the Critical Path Method (CPM) and the Program Evaluation and Review Technique (PERT) are project management
tools used to plan, schedule, and control projects. While they share some similarities, they also have distinct characteristics
and are applicable in different contexts. Let's explore their usage and applicability:

1. Critical Path Method (CPM):

Usage:

 CPM is primarily used for projects with known activity durations and a relatively deterministic workflow.
 It focuses on identifying the critical path, which is the longest sequence of dependent tasks that determines the
shortest possible project duration.
 CPM is highly effective for projects with well-defined tasks and clear dependencies between activities.
 It is commonly used in construction, manufacturing, engineering, and other industries where project activities have
precise durations and sequencing.

Applicability:

 CPM is suitable for projects where time is the critical factor and there is little uncertainty in task durations.
 It works well for projects with repetitive tasks or those that follow a standard workflow.
 CPM is ideal for projects with fixed deadlines and strict schedule constraints.
 It is less suitable for projects with high levels of uncertainty or where activity durations are difficult to estimate
accurately.

2. Program Evaluation and Review Technique (PERT):

Usage:

 PERT is used for projects with uncertain activity durations and probabilistic estimates.
 It allows for three estimates of activity duration: optimistic, pessimistic, and most likely. These estimates are used
to calculate a weighted average duration for each task.
 PERT focuses on analyzing the variability and risk associated with project schedules, making it particularly useful for
complex and innovative projects.
 It is commonly used in research and development, product development, and projects where there is a high degree
of uncertainty or novelty.

Applicability:

 PERT is suitable for projects where there is a significant amount of uncertainty in task durations or where tasks are
highly interdependent.
 It is effective for projects with non-repetitive tasks or those that involve new technologies or processes.
  PERT allows for the consideration of risk and uncertainty in project scheduling, making it useful for projects with
dynamic or evolving requirements.
 It is less suitable for projects with well-defined tasks and deterministic activity durations, as the probabilistic nature
of PERT may introduce unnecessary complexity.

In summary, while both CPM and PERT are valuable project management tools, they are best suited for different types of
projects. CPM is ideal for projects with known activity durations and deterministic workflows, while PERT is more
appropriate for projects with uncertain durations and probabilistic estimates. Understanding the unique characteristics and
applicability of each method allows project managers to choose the most appropriate approach for their specific project
requirements.

Critical Path Method (CPM) and Program Evaluation and Review Technique (PERT) are utilized in various industries,
including manufacturing:

1. Manufacturing Industry:

CPM Usage:

 Production Planning: CPM is used to schedule and sequence manufacturing activities such as material
procurement, machining, assembly, and quality control. By identifying the critical path, manufacturers can ensure
timely completion of production runs and optimize resource allocation.
 Supply Chain Management: CPM helps manufacturers manage complex supply chains by identifying critical
activities such as supplier lead times, transportation, and inventory management. By focusing on critical tasks,
manufacturers can minimize supply chain disruptions and improve overall efficiency.
 Plant Maintenance: CPM is used to schedule preventive maintenance tasks, equipment downtime, and repairs in
manufacturing facilities. By identifying critical maintenance activities, manufacturers can minimize unplanned
downtime and ensure continuous production.

PERT Usage:

 New Product Development: PERT is used in manufacturing industries to manage the development of new products
or technologies. It allows manufacturers to assess the uncertainty and risk associated with new product
development projects, estimate project durations, and allocate resources effectively.
 Process Innovation: PERT helps manufacturers evaluate the feasibility and potential impact of process innovations
or improvements. By considering the variability and uncertainty associated with process changes, manufacturers
can identify potential risks and develop contingency plans.
 Project Portfolio Management: PERT is used to prioritize and manage multiple projects within manufacturing
organizations. It allows manufacturers to assess the overall risk and uncertainty of project portfolios, allocate
resources based on project priorities, and optimize project schedules.

Let's explore how both the Critical Path Method (CPM) and the Program Evaluation and Review Technique (PERT) are
applied in project management within organizations, using examples:

1. Software Development Project Management:

CPM Usage:

 Example: Developing a Mobile Application

 How CPM Helps: In developing a mobile application, CPM is used to schedule activities such as requirements
gathering, design, coding, testing, and deployment. By identifying the critical path, project managers can ensure
that key milestones such as feature completion and testing phases are completed on schedule to meet project
deadlines.

PERT Usage:

 Example: Developing a New Software Framework

 How PERT Helps: PERT is applied in projects like developing a new software framework, where there is uncertainty
in activities such as research, prototyping, and integration testing. By using optimistic, pessimistic, and most likely
estimates for activity durations, project managers can assess the risk and variability associated with the project
timeline. For instance, if research activities are identified as critical and uncertain, PERT helps in planning for
potential delays and adjusting project schedules accordingly.

3. Marketing Campaign Project Management:

 CPM Usage:
 Example: Launching a New Product
 How CPM Helps: In launching a new product, CPM is used to schedule activities such as market research, product
development, advertising, and distribution. By identifying the critical path, project managers can ensure that key
activities such as product launch events and advertising campaigns are executed on time to capitalize on market
opportunities.

PERT Usage:

 Example: Organizing a Trade Show Participation

 How PERT Helps: PERT is applied in projects like organizing a trade show participation, where there is uncertainty in
activities such as booth design, logistics planning, and attendee engagement. By using optimistic, pessimistic, and
most likely estimates for activity durations, project managers can assess the variability and risk associated with the
 project timeline. For instance, if logistics planning is identified as critical and uncertain, PERT helps in planning for
potential delays and adjusting project schedules accordingly.

In summary, both CPM and PERT are valuable project management techniques used in various industries and project types
to effectively plan, schedule, and control project activities, manage resources, and mitigate risks.