PERT/CPM

Short note:
PERT:
Project Evaluation and Review Technique (PERT) is a procedure through which
activities of a project are represented in its appropriate sequence and timing. It is
a scheduling technique used to schedule, organize and integrate tasks within a
project. PERT is basically a mechanism for management planning and control
which provides blueprint for a particular project. All of the primary elements or
events of a project have been finally identified by the PERT.
In this technique, a PERT Chart is made which represent a schedule for all the
specified tasks in the project. The reporting levels of the tasks or events in the
PERT Charts is somewhat same as defined in the work breakdown structure
(WBS).
Characteristics of PERT:
The main characteristics of PERT are as following :
1. It serves as a base for obtaining the important facts for implementing the
decision-making.
2. It forms the basis for all the planning activities.
3. PERT helps management in deciding the best possible resource utilization
method.
4. PERT take advantage by using time network analysis technique.
5. PERT presents the structure for reporting information.
6. It helps the management in identifying the essential elements for the
completion of the project within time.
Advantages of PERT:
It has the following advantages :
7. Estimation of completion time of project is given by the PERT.
8. It supports the identification of the activities with slack time.
9. The start and dates of the activities of a specific project is determined.
10.It helps project manager in identifying the critical path activities.
 11.PERT makes well organized diagram for the representation of large amount
of data.
Disadvantages of PERT:
It has the following disadvantages :
12.The complexity of PERT is more which leads to the problem in
implementation.
13.The estimation of activity time are subjective in PERT which is a major
disadvantage.
14.Maintenance of PERT is also expensive and complex.
15.The actual distribution of may be different from the PERT beta distribution
which causes wrong assumptions.
16.It under estimates the expected project completion time as there is
chances that other paths can become the critical path if their related
activities are deferred.
Steps involved in PERT:
The following steps are involved in PERT technique:

1. The activities involved in the project are drawn up in a sequential

relationship to show what activity follows what.

2. The time required for completing each activity of the project is estimated
and noted on network.

3. The critical activities of the project are determined.

4. The variability of the project duration and probability of the project

completion in a given time period are calculated.

CPM
Definition:
The Critical Path Method (CPM) was first developed in USA by the E.I
DuPont Nemours & Co. in 1956 for doing periodic overhauling and
maintenance of a chemical plant. It resulted in reducing the shut-
down period from 130 hours to 90 hours and saving the company $ 1
million.

The CPM differentiates between planning and scheduling of the

project. While planning refers to determination of activities to be
accomplished, scheduling refers to the introduction of time schedule
for each activity of the project. The duration of different activities in
CPM is deterministic. There is a precise known time that each activity
in the project will take. Let us illustrate the CPM technique with an
example of a research project.
Steps Involved in CPM Technique:

CPM employs the following steps for accomplishing a project

planning:
(1) Break down the project into various activities systematically.
(2) Label all activities.
(3) Arrange all the activities in logical sequence.
(4) Construct the arrow diagram.
(5) Number all the nodes (events) and activities.
(6) Find the time for each activity.
(7) Mark the activity times on the arrow diagram.
(8) Calculate early and late, start and finishing times.
(9) Tabulate various times and mark EST and LFT on the arrow
diagram.
(10) Calculate total float for each activity.
(11) Identify the critical activities and mark the critical path on the
arrow diagram.
(12) Calculate the total project duration.
(13) If it is intended to reduce the total project duration, crash the
critical activities of the network.
(14) Optimise the cost
(15) Update the Network
(16) Smooth the network resources.

Advantages of CPM:
The important advantages of CPM technique are:

1. It helps in ascertaining the time schedule of activities having

sequential relationship.

2. It makes control easier for the management.

3. It identifies the most critical elements in the project. Thus, the

management is kept alert and prepared to pay due attention to the
critical activities of the project.

4. It makes better and detailed planning possible.

Limitation of CPM:
The main limitations of the CPM are:

1. CPM operates on the assumption that there is a precise known time

that each activity in the project will take. But, it may not be true in real
practice.

2. CPM time estimates are not based on statistical analysis.

3. It cannot be used as a controlling device for the simple reason that
any change introduced will change the entire structure of network. In
other words, CPM cannot be used as a dynamic controlling device.
Key Differences
Know the Differences & Comparisons

Difference Between PERT and CPM

Project management can be understood as a systematic way of planning, scheduling,
executing, monitoring, controlling the different aspects of the project, so as to attain
the goal made at the time of project formulation. PERT and CPM are the two
network-based project management techniques, which exhibit the flow and sequence
of the activities and events. Program (Project) Management and Review
Technique (PERT) is appropriate for the projects where the time needed to complete
different activities are not known.
On the other hand, the Critical Path Method or CPM is apt for the projects which
are recurring in nature.
The two scheduling methods use a common approach for designing the network and
for ascertaining its critical path. They are used in the successful completion of a
project and hence used in conjunction with each other. Nevertheless, the truth is that
CPM is different from PERT in a way that the latter concentrates on time while the
former stresses on the time-cost trade-off.
Definition of PERT
PERT is an acronym for Program (Project) Evaluation and Review Technique, in
which planning, scheduling, organizing, coordinating and controlling uncertain
activities take place. The technique studies and represents the tasks undertaken to
complete a project, to identify the least time for completing a task and the minimum
time required to complete the whole project. It was developed in the late 1950s. It is
aimed to reduce the time and cost of the project.
PERT uses time as a variable which represents the planned resource application along
with performance specification. In this technique, first of all, the project is divided
into activities and events. After that proper sequence is ascertained, and a network is
constructed. After that time needed in each activity is calculated and the critical path
(longest path connecting all the events) is determined.
Definition of CPM
Developed in the late 1950s, Critical Path Method or CPM is an algorithm used for
planning, scheduling, coordination and control of activities in a project. Here, it is
assumed that the activity duration is fixed and certain. CPM is used to compute the
earliest and latest possible start time for each activity.
The process differentiates the critical and non-critical activities to reduce the time and
avoid the queue generation in the process. The reason for the identification of critical
activities is that, if any activity is delayed, it will cause the whole process to suffer.
That is why it is named as Critical Path Method.
In this method, first of all, a list is prepared consisting of all the activities needed to
complete a project, followed by the computation of time required to complete each
activity. After that, the dependency between the activities is determined. Here, ‘path’
is defined as a sequence of activities in a network. The critical path is the path with
the highest length.

Key Differences Between PERT and CPM

The most important differences between PERT and CPM are provided below:
17.PERT is a project management technique, whereby planning, scheduling,
organising, coordinating and controlling uncertain activities are done. CPM is a
statistical technique of project management in which planning, scheduling,
organising, coordination and control of well-defined activities take place.
18.PERT is a technique of planning and control of time. Unlike CPM, which is a
method to control costs and time.
19.While PERT is evolved as a research and development project, CPM evolved
as a construction project.
20.PERT is set according to events while CPM is aligned towards activities.
21.A deterministic model is used in CPM. Conversely, PERT uses a probabilistic
model.
22.There are three times estimates in PERT, i.e. optimistic time (to), most likely
time ™, pessimistic time (tp). On the other hand, there is only one estimate in
CPM.
23.PERT technique is best suited for a high precision time estimate, whereas CPM
is appropriate for a reasonable time estimate.
24.PERT deals with unpredictable activities, but CPM deals with predictable
activities.
 25.PERT is used where the nature of the job is non-repetitive. In contrast to, CPM
involves the job of repetitive nature.
26.There is a demarcation between critical and non-critical activities in CPM,
which is not in the case of PERT.
27.PERT is best for research and development projects, but CPM is for non-
research projects like construction projects.
28.Crashing is a compression technique applied to CPM, to shorten the project
duration, along with the least additional cost. The crashing concept is not
applicable to PERT.
Conclusion
The difference between these two project management tools is getting blurred as the
techniques are merged with the passage of time. That is why, in most projects, they
are being used as a single project. The primary point that distinguishes PERT from
CPM is that the former gives the extreme importance of time, i.e. if the time is
minimized, consequently the cost will also be reduced. However, cost optimization is
the basic element, in the latter.
BASIS FOR
PERT CPM
COMPARISON
Meaning PERT is a project CPM is a statistical
management technique, technique of project
used to manage uncertain management that manages
activities of a project. well defined activities of a
project.
What is it? A technique of planning A method to control cost
and control of time. and time.
Orientation Event-oriented Activity-oriented
Evolution Evolved as Research & Evolved as Construction
Development project project
Model Probabilistic Model Deterministic Model
Focuses on Time Time-cost trade-off
Estimates Three time estimates One time estimate
Appropriate for High precision time Reasonable time estimate
estimate
Management of Unpredictable Activities Predictable activities
Nature of jobs Non-repetitive nature Repetitive nature
Critical and Non-critical No differentiation Differentiated
activities
Suitable for Research and Non-research projects like
 Development Project civil construction, ship
building etc.
Crashing concept Not Applicable Applicable

Crashing of Network:

Many times it is felt that the project duration as estimated from

normal arrow diagram is long and it is desired by management to
accomplish the project in a shorter duration of time in order to secure
progress payments or to avoid lateness penalties, etc. To do so various
possibilities are explored. Work study techniques of systematic
questioning (as in critical examination under method study) are
employed to every (critical) activity to seek the possibilities of
reducing their duration.
The critical path activities are classified as Do and Ancillary activities.
Ancillary activities are those which support Do activities. For example,
cutting of threads on a bar is Do activity whereas making the set up for
cutting threads is an Ancillary activity. After identification, Do
activities are subjected to systematic questioning technique
embodying series of questions as regards purpose, place, sequence,
person and means.
The second method is to trade off or transfer some resources from the
activities having float to the critical activities, in order to reduce their
duration. Trading off-redistributes the resources and accompanies
changes in duration. The resources may be workforce, amount of
equipment and machinery, money, (better and more suitable)
materials, etc.
Even by using work study techniques, trade off and other possible
methods, if efficiency does not improve and the project duration is not
shortened, then the only alternative left is network contraction or
compression. In other words, when all those techniques, which can
reduce project duration at almost zero additional cost, fail, then
network contraction, expediting or crashing of activities is resorted to.
This system of improvement involves extra cost because extra money
is spent on overtime engagement of workforce, purchase of additional
machinery, use of better materials, skilled workers, etc. The cost
increases, as more and more activities are crashed and in turn, of
course the project duration decreases. One has to strike a balance
between the extra money spent and the project time saved.
There are two types of activities-critical and non-critical. Crashing
non-critical activities does not serve any purpose as they do not
control the project duration and completing them (still) earlier does
no benefit rather increases work-in-progress. Therefore, crashing is
centred on critical activities only which can reduce project duration if
completed earlier.
ADVERTISEMENTS:

Crashing of critical activities is started, in a systematic manner, from

that (critical) activity which has least cost-time slope, i.e., which is
cheapest to crash. Activities are crashed one after the other till the
activity duration cannot be reduced further or the duration of original
critical path gets shortened beyond a certain limit that another critical
path comes into the picture.
Under such circumstances if there are more than one critical paths,
then, one activity in each of the critical paths is chosen for crashing by
the same amount of time. The crashing continues to the point, where
after further decrease in project duration is not possible, because,
either the network reaches the compression limit set or the cost of
crashing is more than the amount of saving in return.
Advantages of PERT –
The advantages of PERT are mentioned below:
 Planning For Large Projects in PERT – The scheduling of project activities is
done easily with the help of the PERT system by the project manager. This
technique is more active in large sophisticated project works.
 Visibility of Critical Path in PERT – The PERT method will show the critical
path in a well-defined manner. The critical path is the path with activities that
cannot be delayed under any circumstances. Proper knowledge about the stack
 values with limited conditions of dependencies will help the project manager to
bring fast and quality decisions that will favor the project performance.
 Analysis of Activity in PERT – The activity and the events are analyzed from
the PERT networks. These are analyzed independently as well as in
combination. This will give a picture of the likely completion of the project and the
budget.
 Coordination in PERT – The various departments of the construction
organization will deliver data for the PERT activities. Good integration is
developed between all the departments which will help in improving the planning
and the decision-making capabilities of the project team. The combination of
qualitative and quantitative values from a large amount of data will help in
improving the coordination of the project activities. This will also improve the
communication between various departments of the organization.
 The What-if Analysis – The possibilities and the various level of uncertainties
can be studied from the project activities by properly analyzing the critical path.
This type of analysis is called what-if-analysis. For these various sets of
permutation and combination are conducted. Among them, the most suitable
combination is taken into consideration. This set chosen will be the one with
minimum cost, economy, and best result. This analysis helps to identify the risk
associated with any activities.
Disadvantages of PERT –
Various Demerits of PERT are mentioned below:
 Time Focused Method – PERT is a time-bound method, so finishing projects or
activities on time is of high importance. If it does not happen than a problem can
arise
 Subjective Analysis – Here, the project activities are recognized according to
the available data. However, it is difficult in PEERT projects as it is applicable for
the only new project are which is not repetitive in nature, therefore, the collection
of information to be subjective in nature.
 Prediction Inaccuracy – PERT does not have any past records for a framework
of a project, so prediction comes into play. The project will be ruined if the
prediction is not accurate.
 Expensive – Too expensive in terms of time consumed, research, prediction,
and resources utilized.
 Other Issues with PERT – This method is highly labor-intensive in nature. As
there are chances of an increase in project activities large and complicated
networks are developed as many task dependencies come into existence. If two
activities share common resources, this technique won’t find very apt for the
project.
Advantages of CPM
#1. Minimizing delays
An organization can use the critical path method to minimize the delays in a
project
#2. Organizes complex projects
The critical path method helps to organize complex and large projects as it
takes a systemic approach for risk management, project execution, scheduling,
and project planning
#3. Predicts time
The critical path method predicts the time that will be required to complete
the project

#4. Improves project organization

It is easy to break deliverables into sequences and further into tasks with the
help of critical path method. It becomes easier to improve project organization
when you have a critical path of tasks, mapping constraints and visualizing
dependencies at your fingertips to help you through
#5. Visualize dependencies
The critical path method gives information about the activities and their
interdependencies and this chart helps the management to prioritize tasks and
visualize dependencies
#6. Maximizing efficiency
When a project manager can determine which task is more important he can
use the information to allocate resources efficiently. It also helps to bring back
the project on track
#7. Float calculation

The critical path method helps to calculate float the makes it possible to
distribute required resources effectively. In simple terms, it doles out a float to
activities and flexibility to float activities.
#8. Graphical view
The critical path method shows the graphical view of the task/project
#9. Project plan
The algorithm helps in controlling, scheduling, and planning of a project. It
offers clear directions and enhanced visibility to achieve organizational goals.
#10. Contingency plan
It is now possible for an organization to create and maintain contingency
planning.

7 Disadvantages
29.A critical path is a planning tool that assumes every resource is available
at every time for a project and this is not true
30.Chances of misusing float are high
31.It does not take into account resource dependencies
32.The attention on non-critical activities is negligible
33.Less routine projects are not completed within the approved time even if
the company is following the critical path method
34.The estimates are not based on a statistical analysis
35.It cannot be used as a dynamic controlling device as any change if
introduced will change the entire framework of the network

Time Estimation in PERT

There are three different estimates of activity duration in PERT: 1.
Optimistic 2. Pessimistic 3. Most Likely.

36. 1. Optimistic time, expressed as ‘to‘,represents estimate of

minimum possible time by which an activity can be completed
assuming that everything is in order according to the plan and
there can be only minimum amount of difficulty.
37. 2. Pessimistic time, expressed as ‘tp’ represents estimate of
maximum possible time by which an activity can be completed
assuming that things may not be in accordance with the plan and
there can be incidence of difficulties in carrying out the activity.
38. ADVERTISEMENTS:

39. 3. Most likely time, expressed as ‘tm‘, represents estimate of

time for completion of an activity, which is neither optimistic nor
pessimistic, assuming that things should go in a normal way, and
if the activity is repeated several times, in most of the cases, it
will be completed in time represented by t.
40. From the above three different estimates, PERT suggests
work out of the expected time, expressed as ‘te‘ assuming that the
probability distribution of the activity duration follows beta-
distribution and, thus, te is the average of to tp and tm calculated as,
41. te=to + 4 x tm + tp /6