sonnel sonnel pas Network Models Part 1 Topics a 92 93 94 95 96 97 (Characteristics of Project ‘Management ‘Tacminolagias in Program Evaluation and Review Technique (PERT) and Critical Path Method (CPM), Differences between PERT and CPM Purpose of PERT/CPM ‘Advantages of PERTICPM PERT/CPM Procedure: Solving CPM Learning Outcomes Identity the characteristics of a project and project, management. Understand the terms of the topie: activity, event, slack, dummy activity, crtical activity, ertcal path, network, and. crash time, Distinguish PERT trom CPM. Explait the importance of ‘computing PERTICPM, Construdt a simple CPM network. ‘Analyze a CPM activity! event. Introduction Managers encounter many administrative situations wherein these require them to plan organize, and control a project that consists of a number of different but interrelated activities. There are two widely known network management tools: Critical Path Method (CPM) and Program Evaluation and Review Technique (PERT). In 1957, the CPM grew out of a research effort by Morgan R. Walker of Du Pont and James E. Kelly of Remington Rand. The research team was primarily concerned with finding ways to reduce the time required to perform tasks, such as construction work and plant maintenance, To determine the optimal tradeoff of cost and time was the goal of the originators of CPM. On the other hand, PERT was developed in 1958 by US Navy Special Projects Office in conjunction with the consulting firm Booz, Allen, and Hamilton. The US Navy, at that time, was faced with the challenge of developing Polaris submarine missile project at the soonest possible time. PERT was the tool used to plan and control the duration of this project.i ¢ é i i © i 6 Lesson 9.1: Characteristics of Project Management 1. The time of completion of the project can take weeks, months, or even years. Due to the extended duration of such projects, many changes can happen, which are oftentimes difficult to forecast. ‘The complexity of the nature of the project involves many interrelated activities or events. It also involves participants from the organization, as well as those that are not direotly employed in the company, such as suppliers, contractors, etc. Delays in the project may require the payment of penalty fees. The sequential nature of projects means that some activities cannot begin until a certain condition or event had taken place. Projects are carefully planned activities that involve a unique undertaking. Lesson 9.2: Terminologies in Program Evaluation and Review Technique (PERT) and Critical Path Method (CPM) To fully understand the purpose of PERT and CPM, it would be necessary to define important terminologies Activity. Activity refers to an effort that needs resources and time to accomplish a goal or a project. Examples of activities are training employees, buying raw materials. meeting with suppliers, etc. Event. A goal that has been completed at a certain period is considered an event. An event can also be called as a milestone as it happens after all activities that recede it must be accomplished. Project. A project involves a series of events and activities with a definable beginning and a definable end, which is the goal. Examples include patenting a new drug, building a school, fundraising for a charity, etc. Network. This refers to activities and events that are arranged in a logical and chronological order and presented graphically that demonstrate the relationships ‘among the different activities and events that will lead to the completion of a project. '. An activity that has a strong impact on project completion. A slight delay of a.crtical activity will hold up the target completion date of an entire project. Path. A path represents a collection of activities that connects one event to another. 104 MANAGEMENT SCIENCE Critical from the project immedi the star Activity allowes Lesse Differe 8 distinc’ Less Purpo ' entail organi syster activit how ¢ minim_or even ges can errelated nization, such as s cannot jertaking, nd essary to omplish a materials, an event. vities that beginning new drug, gical and stionships 4 project. a. Aslight ® project. » another. Critical Path. A path that is comprised of a sequence of critical activities that occur from the start of a project until full completion. It is the longest path throughout the project network. Immediate Predecessors. These are activities that must be accomplished before the start of an activity in question. ‘Activity Slacks. Also termed as float activity, its the length of time that a task is allowed to be delayed as it will not cause a delay for the entire project. Lesson 9.3: Differences between PERT and CPM Both analytical methods have the same approach. There are, however, two distinctions: i 4. PERT usually requires three estimates to calculate the weighted average of the expected completion date of the project based on the probability distribution of time of completion. Thus, PERT is a probabilistic tool while CPM is a deterministic tool. CPM needed only one estimate of project duration. CPM includes an explicit estimate of the cost, whereas PERT is a tool mainly focused on planning and controlling time. Lesson 9.4: Purpose of PERT/CPM Most projects are of complex nature. Thus, itis very dificult to avoid delays that cetail additional costs (such as penalties). Every project requires careful planning, organizing, and controling, which can be done by having appropriate management systems, However, such systems may increase the cost of doing the project. Toallow efficient project management, PERTICPM can aidin determining erica! activities. PERTICPM also provides techniques that can inform project managets how close the remaining activities are to becoming critical. The following are the minimum information that PERT/CPM can provide: 1. Activities that are critical 2, Activities that are noneritical 3. The slack time per noncritical activity 4, Other information as needed by management CHAPTER 9 NETWORK MODELS PART 4 105‘SE Pett Ee = £ & 5 © E 5 Lesson 9.5: Advantages of PERT/CPM Detailed Planning. PERT/CPM enables management to prepare a detailed plan that specifies what must be done to accomplish all tasks on time. Commitments and Communication. All participants in the project are required to make @’commitment of following completion dates. PERT/CPM also allows more fluid communication with members of the organization and between suppliers’and vendors. Efficient Monitoring and Control. All critical activities must be identified. Doing this ‘enables management to efficiently monitor all activities through records and reports. More intensive monitoring will be given only to critical activities. Identifying Potential Problem Areas. Contingency plans must be prepared on the anticipated problem areas, especially in the critical areas. Proper Use of Resources. PERT/CPM enables management to have a preview of the overall plan. Thus, resources are properly allocated, especially on bottlenecks or problematic areas. Rescheduling. An efficient monitoring system can easily pinpoint deviations from the schedule. Hence, such deviations can easily be corrected to minimize delays. Lesson 9.6: PERT/CPM Procedure The PERT/CPM procedure is divided into three phases: (a) Formulation; (b) Solution; and (c) Analysis and Application. The formulation phaseis for the preparation of the basic inputs to PERT/CPM. There are three steps in the formulation phase: 1. Analyze the project by defining the activities and assigning responsibilities to the participants. 2. After finalizing the content of each activity, the sequence of executions is determined. The third step is to estimate the length of time for each activity. In the case of CPM, the activity duration estimate is considered deterministic. This assumption is based on the wealth of experience or expertise of participants. For PERT, however, the duration is unknown; therefore, three estimates are needed to predict the duration. The solution phase involves the creation of the network, event analysis, and activity analysis. The last phase, analysis and application, is focused on monitoring and control, as well as resource utilization. 106 MANAGEMENT SCIENCE prepara Solution: Step 1. provides!ed plan equired fs more ers and ng this reports, don the eview of lenecks ns from jelays. tion; (b) aration phase: sibilities uutions is y. In the rministic. ertise of herefore, ysis, and onitoring Lesson 9. Solving CPM The “solution” is the second phase of PERT/CPM, which necessitates the construction of a network. There’ are two main procedures: forward pass and backward pass. Forward pass aims to determine the earliest start and earliest finish time of each activity by going forward on the network. Backward pass, on the other hand, identifies the latest start and latest finish time of each activity by moving backward through the network. As an example: Three months before the Fair College Foundation Week, Ms. Dina Ignacio was appointed as the committee chair. It will be a week-long celebration that will be participated in by the Basic Education Department and tertiary schools. As partof the preparations for the 20th foundation week, several activities have to be undertaken. Solution: ‘Step 1. List down the activities, immediate predecessors, and approximated time as provided by the problem (Table 9.1). Table 9.1 Activity Schedule of Fair College Aa : es) 1 ‘CHAPTER 9 NETWORK MODELS PART 1 107COLLEGE a & S = S E = = & Step 2. Construct the project network (Figure 9.1) Figure 9.1. Projact Network of Activity Schedul Step 3. Calculate the completion time of each activity (Figure 9.2). - i Figure 9,2. Completion Time Step 4. Compute the earliest start time and earliest finish time of the initial activities. The formula is expressed as: EF =ES +5 (Figure 9.3) where: ES = earliest start time for an activity EF = earliest finish time for an activity t = activity time Activity ES [EF Ts iF Figure 9.3, Earliest Start Time (ES) and Earliest Finish Time (EF) 108 MANAGEMENT SCIENCE Step 5. Cal (Figure 9.4 Acti be select period is next activ Step 6. The form where: LS = late LF = late saclStep 5, Calculate the earliest start time and earliest finish time using the forward pass (Figure 9.4). Figure 9.4, Earliest Start Time (ES) and Earliest Finish Time (EF) of Actvty Schedule Activity F wil have the earliest start time at 4.5 since the higher entry should be selected from the earliest finish of Activity D (2.5) and E (4.6). The higher time period is chosen because all-activities prior must be finished before the start of the next activity. Step 6. Enter the latest start time and latest finish time using the backward pass. The formula is expressed as: Ls = LF-t (Figure 9.5) where: LS = latest start time for an activity LF = latest finish time for an activity t = activity time Activity ! EF] K [65 [95 iF T [85 Figure 9.5. Latest Start Time (LS) and Latest Finish Time (LF) CHAPTER'® NETWORK MODELS PART