Project Management by CPM & PERT

SML 740 Quantitative Methods in Management

Course Coordinator Prof. D.K.Banwet




Presented by :-
Neha Thapliyal 2005SMF6544 Kumar Gaurav 2005SMF6615
Ashish Kumar Singh 2005SMF6648 Saurabh Vajpayee 2005SMT6671
Department of Management Studies
Indian Institute of Technology, Delhi
History of CPM & PERT
Project planning with CPM/PERT
CPM (Critical Path Method)
PERT (Programme Evaluation Review Technique)
Project management techniques
Created out of the need of Western industrial and
military establishments to plan, schedule and control
complex projects.
Developed along two parallel streams, one industrial and
the other military.

History of CPM & PERT
CPM was the discovery of M.R.Walker of E.I.Du Pont
de Nemours & Co. and J.E.Kelly of Remington Rand,
1957
First test was made in 1958, when CPM was applied
to the construction of a new chemical plant
In 1959, the method was applied to maintenance
shutdown at the Du Pont works - Unproductive time
was reduced from 125 to 93 hours
PERT was devised in 1958 for the POLARIS missile
program by the Program Evaluation Branch of the
Special Projects office of the U.S.Navy

Planning, Scheduling & Control
Planning, Scheduling (or organizing) and Control
are considered to be basic Managerial functions
PERT/CPM provided a focus around which
managers could brainstorm and put their ideas
together.
Proved to be a great communication medium by
which thinkers and planners at one level could
communicate their ideas, their doubts and fears to
another level.
Planning, Scheduling & Control
CPM/PERT can answer the following important
questions:
How long will the entire project take to be
completed? What are the risks involved?
Which are the critical activities or tasks in the
project, which could delay the entire project if they
were not completed on time?
Is the project on schedule, behind schedule or
ahead of schedule?
If the project has to be finished earlier than
planned, what is the best way to do this at the least
cost?


Framework for PERT & CPM
1. Define the Project and all of its significant
activities or tasks.
2. Develop the relationships among the activities
3. Draw the "Network" connecting all the activities
4. Assign time and/or cost estimates to each activity
5. Compute the longest time path through the
network CRITICAL PATH
6. Use the Network to help plan, schedule, monitor
and control the project


Framework for PERT & CPM
Five useful questions to ask when preparing an
activity network are:
Is this a Start Activity?
Is this a Finish Activity?
What Activity Precedes this?
What Activity Follows this?
What Activity is Concurrent with this?

Activity-on-Node Network Diagrams
AON
Each activity is represented by a node in the network.
A precedence relationship between two activities is
represented by an arc or link between the two.
AON may be less error prone because it does not
need dummy activities or arcs
Figure2: Activity on node representation
Figure 3: Activity on arc representation
AOA
Each activity is represented by an arc in the network.
If activity X must precede activity Y, there are X leads into arc Y.
Thus, the nodes represent events or milestones (e.g., finished
activity X). Dummy activities of zero length may be required to
properly represent precedence relationships.
AOA historically has been more popular, perhaps because of its
similarity to Gantt charts used in scheduling.
Activity-on-Arc Network Diagrams
Crashing, Resource Constraints
and Uncertainty
Some peculiar situations that may arise in a current
day project are :
Speeding up the completion of a project by speeding
up or crashing some of the activities in the project.
Ability to finish a project quickly is hindered by limited
resources.
Given the uncertainty of each activity, what can be
said about the probability that the entire project
will finish by a given target date.

Thus, we get a crashing cost curve for the activity as shown in Figure 4:



Normal time
Figure 4 Activity Crash Cost Curve
Cost
Crashing, Resource Constraints and
Uncertaintycontd.
Crashing and the cost of crashing
Crashing of Project Networks
Once the critical path length for a project has been identified, the
next question invariably asked is: can we shorten the project? The
process of decreasing the duration of a project or activity is
commonly called crashing.

The Cost and Value of Crashing
There is value in crashing a project. In order to crash a project, we
must crash one or more activities. Crashing an activity costs
money.

The Cost of Crashing an Activity
An activity is typically crashed by applying more labor to it.
CPM PERT in building construction
Construction activities and their time & start constraints
CPM in construction
C
The Value of Crashing a Project
There are two approaches to deciding upon the amount of project
crashing:
We simply specify a project duration time and crash enough to
achieve this duration, or
We estimate the value of crashing it for various days.
Figure 6 Gantt chart for House Project
Thank You !!