Tab 1

Module :
PROGRAM EVALUATION REVIEW
TECHNIQUE (PERT) AND CRITICAL
PATH METHOD (CPM)
Overview:
These lessons will tackle the two project management tools that assist management in
scheduling projects: the Program Evaluation Review Technique (PERT) and Critical Path
method (CPM). PERT was developed in 1958 by the US Navy Special Project Office in
coordination with the consulting firm Booz, Allen and Hamilton. The time when the US Navy
faced the challenge of developing the Polaris submarine missile project, the soonest
possible time PERT was the tool used to plan and control the duration of this project. While
Du Pont under the effort of Morgan R. Walker and James E. Kelly of Reminton Rand
developed CPM in 1957. The team researcher was primarily concerned of finding was to
reduce the time required to perform the tasks.

Learning Objectives:
At the end of this module, the student should be able to:
1. Differentiate PERT and CPM;
2. Determine the critical path of a project; and
3. Perform crashing of activities.

Difference between PERT and CPM

Program Evaluation Review Technique Critical Path Method

1. Probabilistic approach 1. Deterministic Approach
Requires a three time estimate to calculate -need only one estimate of project duration
the weighted average of the expected
completion date of the project.
2. Focused on planning and controlling time 2. Consider both time and cost is important
-trade-off between time and cost, hence
crashing is required

PROGRAM EVALUATION REVIEW TECHNIQUE

Three time Estimates
●Optimistic Time (to) - refers to the shortest length of time to complete an activity
●Most Likely Time (tm) - the most probable time or the most realistic time to finish an
activity.
●Pessimistic Time (tp) - the longest time to complete an activity because of an
unfavorable condition
Expected Time (te) - the weighted average time based on the normal curve distribution
Formula:
te = (to + 4tm + tp)
6
Critical Path and Slack Time

Critical Path refers to the longest path through a network that is needed to complete a
project. A delay on the activities on this path will delay the completion of the entire project.
Slack time is equal to zero.

Slack time refers to the length of time in a particular activity that can be delayed or
postponed without delaying the completion of the entire project.
Formula:
Forward Pass
Slack time = Latest start (LS) - Earliest start (ES)
or
Backward Pass
Slack time = Latest finish (LF) - Earliest finish (EF)

Forward Pass is a procedure that involves moving forward through a network.

Earliest Finish (EF) = Earliest starts (ES) + te
Backward Pass is a procedure that involves moving backward through a network.
Latest Start (LS) = Latest Finish (LF) + te

Probability of Project Completion (PERT)

It is determined using the following statistical tool:
1. Variance
2. Standard deviation
3. Z-score

Variance - only variance of the activities on the critical path

Formula:
σ² = ( tp - to )²
6
Standard Deviation is the square root of the variance
Formula:
Std. deviation (σ) = √∑σ²

Probability of Completion:
Formula
Z= x - u__
σ
Where:
Z - Z-score in the normal curve distribution table
x - required due date of the project
u - expected time of completion determined in the network
σ - standard deviation of activities on the critical path
Activities in a Network

It refers to a job or task required to be performed to complete a project.

Predecessor Activity or immediate predecessor activity is an activity that must be
completed before another activity can be started.

Successor Activity is an activity that can be started only once a certain activity is
completed.

Parallel Activity is an activity that is not directly dependent on another activity.

Dummy Activity is an artificial or fictitious activity that is inserted in a network to preserve

the relationships of the predecessor activities. It has a zero completion time.

PERT Procedure
1. Create the list of activities that make up the project
2. Arranged the sequence of activities within the project. This is to identify the
immediate predecessor activity.
3. Estimate the activity time. In PERT, the optimistic, most likely, pessimistic time must
be determined
4. Draw the project network by satisfying the immediate predecessor activity.
5. Use forward pass to identify the earliest start and earliest finish time for each activity.
The earliest finish (EF) time for the last activity would be the project completion time.
6. Use backward pass to determine the latest start and latest finish time for each
activity. The project completion time will be the latest finish (LF) time for the last
activity.
7. Find the slack time for each activity using the formula, slack time = LS-ES of LF-EF.
8. Identify the critical activities, these are activities with zero slack time.
9. Summarize the activity schedule in tabular form.

Example:
Given the following network with activities and time estimated in days

Activity Optimistic Most Pessimistic

Probable
A 2 5 6
B 1 3 7
C 6 7 10
D 5 12 14
E 3 4 5
F 8 9 12
G 4 6 8
H 3 6 8
I 5 7 12
J 12 13 14
K 1 3 4

Requirement:

a. What are the critical path activities?

b. What is the expected time to complete the project?
c. What is the probability the project will take more than 28 days to complete?

Answer:
Activity Expected Time (to+4tm+tp) Variance (tp - to)²
6 6
A 2 + 4(5) + 6 = 28 4.67 (6 - 2)² =(4/6)² .44
6 6 6
B 1 + 4(3) + 7 = 20 3.33 (7-1)² = (6/6)² 1
6 6 6
C 6 + 4(7) + 10 = 44 7.33 (10 - 6)² = (4/6)² .44
6 6 6
D 5 + 4(12) + 14 = 67 11.17 (14 - 5)² = (9/6)² 2.25
6 6 6
E 3 + 4(4) + 5 = 24 4 (5 - 3)² = (2/6)² .11
6 6 6
F 8 + 4(9) + 12 = 56 9.33 (12 - 8)² = (4/6)² .44
6 6 6
G 4 + 4(6) + 8 = 36 6 (8 - 4)² = (4/6)² .44
6 6 6
H 3 + 4(6) + 8 = 35 5.83 (8 - 3)² = (5/6)² .69
6 6 6
I 5 + 4(7) + 12 = 45 7.5 (12 - 5)² = (7/6)² 1.36
6 6 6
J 12 + 4(13) + 14 = 78 13 (14 - 12)² =(2/6)² .11
6 6 6
K 1 + 4(3) + 4 = 17 2.83 (4 - 1)² = (3/6)² .25
6 6 6
 Activity Predecessor Weeks ES LS EF LF Slack Path

A — 4.67 0 4.67 4.67 9.33 4.67

B — 3.33 0 6 3.33 9.33 6

C — 7.33 0 0 7.33 7.33 0 YES

D A 11.17 4.67 14.67 8.67 18.67 10

E A 4 4.67 14.67 8.67 18.67 10

F A, B 9.33 4.67 9.33 14 18.67 4.67

G C 6 7.33 12.67 13.33 18.67 5.33

H C 5.83 7.33 26 13.17 13.17 0 YES

I E, F, G 7.50 14 18.67 21.5 26.17 4.67

J H 13 13.17 13.17 26.17 26.17 0 YES

K D, J 2.83 26.17 26.17 29 29 0 YES

a. Critical Path Expected Time Variance

C 7.33 .44
H 5.83 .69
J 13 .11
K . 2.83 .25
Total 28.99 or 29 1.49
b. Expected Project Completion Time = 29
c. Probability that the project will take more than 28 days is
Z=x-u 28 - 29 = P(z>-.82) = .2061 or 20.61%
Std. deviation 1.22

Standard Normal Distribution Table

Tab 2