Copyright © 2014 by McGraw Hill Education (India) Private Limited. All rights reserved.

A project is made up of a sequence of activities that

form a network representing a project.

The path taking longest time through this network of

activities is called the “critical path.”

The critical path provides a wide range of scheduling

information useful in managing a project.

Critical path method (CPM) helps to identify the

critical path(s) in the project networks.

4–1
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Identify each activity to be done
and estimate how long it will take.

Determine the required sequence

and construct a network diagram.

Determine the critical path.

Determine the early start/finish

and late start/finish schedule.

4–2
 A(21)
C(7)

B(5)
D(2)
F(8)

E(5)
G(2)

4–3

Copyright © 2014 by McGraw Hill Education (India) Private Limited. All rights reserved.
 Copyright © 2014 by McGraw Hill Education (India) Private Limited. All rights reserved.
Critical 21 28 28 36
Path 1:
ACFG C(7) F(8)

21 28 28 36
0 21 36 38

A(21) G(2)
0 21 36 38
21 26 26 28 28 33

Critical B(5) D(2) E(5)

Path 2:
ABDFG 21 26 26 28 31 36

Excel: Critical
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4–4
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• When activity times vary, a single time
estimate may not be reliable.
– Instead, estimate three values
 Minimum
 Maximum
 Most likely
• This allows calculation of a probability
estimate of completion time.
• This is the distinguishing characteristic of the
PERT method.
4–5
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𝑎 = 𝑚𝑖𝑛𝑖𝑚𝑢𝑚
𝐸𝑇
𝑏 = 𝑚𝑎𝑥𝑖𝑚𝑢𝑚
𝑚 = 𝑚𝑜𝑠𝑡 𝑙𝑖𝑘𝑒𝑙𝑦 𝑎 + 4𝑚 + 𝑏
=
𝐸𝑇 = 𝑒𝑥𝑝𝑒𝑐𝑡𝑒𝑑 𝑡𝑖𝑚𝑒 6
𝜎 2 = 𝑣𝑎𝑟𝑖𝑎𝑛𝑐𝑒 𝑏 −𝑎 2
𝜎2 =
6

Excel: PERT
Calculations
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4–6
4–7

Copyright © 2014 by McGraw Hill Education (India) Private Limited. All rights reserved.
 0
0

A(21)

21
21

21
21
21

21

B(5)
C(7)

26
26
28
28

26
26

D(2)

28
28

31
28
28
28

E(5)
F(8)

36
36
36

33
36
36

G(2)

38
38

4–8

Copyright © 2014 by McGraw Hill Education (India) Private Limited. All rights reserved.
 • Probability of finishing in 35 weeks (or less)

4–9

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 in 35

less) is
weeks (or

about 19%
• Probability
of finishing

Copyright © 2014 by McGraw Hill Education (India) Private Limited. All rights reserved.
4–10
 F
E
C
B
A

G
D

H
Activity
a

1
3
1
2
4
1
2

2
8
2
2
6
5
5

4
m

3
9
2
9
9
8

5
b

10
-
-

B
A
A

F,G
C, E
C, D
Immediate predecessor

Copyright © 2014 by McGraw Hill Education (India) Private Limited. All rights reserved.
4–11
 Copyright © 2014 by McGraw Hill Education (India) Private Limited. All rights reserved.
• Calculate the expected time and
variance for each activity.
• Draw the critical path diagram. Show
the early start, early finish times and
late start, late finish times
• Show the critical path.
• What is the probability that the project
can be completed in 19 weeks?

4–12
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Activity Expected Time Activity Variance

• A 5.00 1
• B 5.00 1 7/9
• C 6.17 25/36
• D 2.00 0
• E 3.00 1 7/9
• F 3.83 1/4
• G 7.50 1 1/3
• H 2.00 1/9

4–13
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4–14
 Using tables: there is 17 percent chance of completing the project by that date

Copyright © 2014 by McGraw Hill Education (India) Private Limited. All rights reserved.
4–15
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• A time-cost model extends the CPM
model to consider the trade-off between
time required to complete an activity
and total project cost.
– Considers direct activity costs, indirect costs
of project, and activity completion times

• It is often referred to as “crashing” the

project to reduce overall duration.

4–16
 Copyright © 2014 by McGraw Hill Education (India) Private Limited. All rights reserved.
Prepare a CPM-type network diagram.

Determine the cost per unit of time to

expedite each activity.

Compute the critical path.

Shorten the critical path at the point where

costs are lowest.

Plot project, indirect, and total cost curves

to find the minimum-cost schedule.

4–17
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Crashing
Excel: Project

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4–18
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Project has reached
minimum duration

Activity D cannot be
reduced any further
at this point
Activity A cannot be
reduced any further
at this point

4–19
4–20
4–21