PERT/

CPM
 Project Evaluation and
Review Technique
A systematic procedure for using
network analysis systems for
planning, measuring progress
against schedule, evaluating
changes to schedule, forecasting
future progress
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Activity – smallest unit of work consuming
both time and resources
Event – represents the start and the end point
of an activity
Project – interrelated set of activities that has
a definite starting and ending point and that
results in a unique product or service
Path – unbroken chain of activity arrows
connecting the initial event to some other
event
Network – graphical presentation of a project
which consists of all details regarding
consumption of time and cost
Network Analysis – a successful technique
frequently used to plan, monitor and control
the projects involving thousands of activities 3
 Predecessor
Activity
Activity
A none
B none
C A
D A
E B
F C
G D, E

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 Predecessor
Activity
Activity
A none
B none
C A
D A
E B
F C
G D, E

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 PERT-Time Analysis
Contains a sequence of arrows
showing interrelationships
among activities with time being
the basic element in these
activities

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 4weeks 2 10weeks

1
4

12weeks 8weeks
3

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Expected Activity Time – computed using the
weighted average of the shortest(optimistic)
time, the most likely(average) time, and the
longest(pessimistic) time
te = to + 4tm + tp
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Critical Path – path that takes the longest time
to reach
Slack – length of time by which a particular
activity can slip without having any delaying
effect on the end event

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 4weeks 2 10weeks

1
4

12weeks 8weeks
3

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 Time estimates (weeks)
Expected Time

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Activity Predecessor/s
Optimistic Most Likely Pessimistic (Weeks)

A none 1 3 5 3
B none 1 2 3 2
C none 3 5 7 5
D A 3 4 5 4
E B 3 4 5 4
F B 5 6 13 7
G C 5 6 13 7
H D,E 2 8 14 8
I F,G 5 6 13 7

Required:
1. Calculate the expected time
2. Prepare a PERT network
3. Identify the critical path

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PERT network with time estimates in weeks:

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Paths:
1-2-5-7 ( 3 + 4 + 8 ) = 15 weeks
1-3-5-7 ( 2 + 4 + 8 ) = 14 weeks
1-3-6-7 ( 2 + 7 + 7 ) = 16 weeks
1-4-6-7 ( 5 + 7 + 7 ) = 19 weeks ***critical path

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 Crashing the network
✓ Refers to the efforts designed to
complete the project ahead of
schedule
✓ Finding the minimum cost of
completing the project in minimum
time to achieve the optimum trade-
off between time and cost
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 PERT-Cost Analysis
✓ An extension of PERT-Time
✓ A study the cost-effectiveness of crashing
✓ Steps:
✓ Each activity is assigned two projected time estimates:
(a)normal time (b)crash time
✓ Compute the incremental crash cost for each activity that can
be crashed using the ff. formula:
Crash cost – Normal Cost
Number of Days Saved
✓ Set up the “Stage Table” which summarizes the status of the
project
✓ To find the alternative trader-offs, crash the critical activity
whose incremental cost is the least 13
Assume that for a special project of ABC Manufacturing Co. the total

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normal cost of P316,000 and the PERT-Time inputs are shown in the
network below:

The initial stage table will show the following data:

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Management wants to determine whether the project’s completion

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time can be shortened at the least possible incremental cost. Thus, a
PERT-Cost Analysis is made producing the ff. network:

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The status of the project at this stage is as follows:

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Management wants to determine whether the project’s completion

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time can be shortened at the least possible incremental cost. Thus, a
PERT-Cost Analysis is made producing the ff. network:

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The new stage table will now show the following status:

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