PERT/CPM – Why?

○ Used to plan, schedule, and control a

wide variety of projects:
1.Research and development of new
products and processes
2.Construction of plants, buildings, and
highways
3.Maintenance of large and complex
equipment
4.Design and installation of new system
3
 PERT/CPM CRITICAL PATH
PROCEDURE (Step 6 – 9)
6. Use the project completion time identified in Step 5 as the
latest finish time for the last activity and make a
backward pass through the network to identify the
latest start and latest finish time for each activity.
7. Use the difference between the latest start time and the
earliest start time for each activity to determine the slack
for each activity.
8. Find the activities with zero slack; these are the critical
activities.
develop the
9. Use the information from Step 5 and 6 to
activity schedule for the project.

8
PERT/CPM – 3 Aspects
1.Project Scheduling with known
Activity Times

2.Project Scheduling with

uncertain Activity Times

3.Considering Time-Cost Trade

Offs

9
Project Scheduling with known Activity
Times – Case Study
○ The owner of the Western Hills Shopping
Center is planning to modernize and
expand the current 32-business shopping
center complex. The project is expected
to provide room for 8 to 10 new
businesses. Financing has been arranged
through a private investor. All that
remains is for the owner of the shopping
center to plan, schedule, and complete
the expansion project.

10
 List of Activities for the Western Hills
Shopping Center Project
Activity Immediate Activity
Activity Description Predecessor Time .
A. Prepare architectural
drawings — 5
B Identify potential new tenants — 6
C Develop prospectus for tenants A 4
D Select contractor A 3
E Prepare building permits A 1
F Obtain approval for building permits E 4
G Perform construction D, F 14
H Finalize contracts with tenants B, C 12
I Tenants move in G.H 2
NOTE:
Total 51
• 9 Activities are described and denoted A – I
• The Table shows the Immediate Predecessor(s)
• The Activity time for each activity 11
 List of Activities for the Western
Hills Shopping Center Project
Activity Immediate Activity
Activity Description Predecessor Time .
A. Prepare
architectural drawings — 5
B Identify potential new tenants — 6
C Develop prospectus for tenants A 4
D Select contractor A 3
E Prepare building permits A 1
F Obtain approval for building permits E 4
G Perform construction D, F 14
NOTE: H Finalize contracts with tenants B, C 12
I Tenants move in G.H 2
• For a given activity, the Intermediate Total Predecessor51 column
identifies the activities that must be completed immediately
prior to the start of that activity.
• Activity A and B do not have Immediate Predecessors and
can be started as soon as the project begins, thus a dash (-)
is entered in the Intermediate Predecessor column for these
activities. 12
 List of Activities for the Western
Hills Shopping Center Project
Activity Immediate Activity
Activity Description Predecessor Time .
A. Prepare architectural drawings
— 5
B Identify potential new tenants — 6
C Develop prospectus for tenants A 4
D Select contractor A 3
E Prepare building permits A 1
F Obtain approval for building permits E 4
G Perform construction D, F 14
H Finalize contracts with tenants B, C 12
I Tenants move in G.H 2
NOTE: Total 51

• The other entries in the Intermediate Predecessor column

show that activities C, D, and E cannot be be started until
activity A has been completed.
• Activity F cannot be started until activity E has been
completed.
• Activity G cannot be started until both activities D and F
have been completed. 13
 List of Activities for the Western
Hills Shopping Center Project
Activity Immediate Activity
Activity Description Predecessor Time .
A. Prepare
architectural drawings — 5
B Identify potential new tenants — 6
C Develop prospectus for tenants A 4
D Select contractor A 3
E Prepare building permits A 1
F Obtain approval for building permits E 4
G Perform constructionD, F 14
H Finalize contracts with tenants B, C 12
NOTE: I Tenants move in G.H 2
Total 51
• Activity H cannot be started until both activities B and C
have been completed.
• Activity I cannot be started until both activities G and H
have been completed.
• The project is finished when activity I completed.
14
 List of Activities for the Western
Hills Shopping Center Project
Activity Immediate Activity
Activity Description Predecessor Time .
A. Prepare architectural drawings
— 5
B Identify potential new tenants — 6
C Develop prospectus for tenants A 4
D Select contractor A 3
E Prepare building permits A 1
F Obtain approval for building permits E 4
G Perform construction D, F 14
H Finalize contracts with tenants B, C 12
I Tenants move in G.H 2
NOTE: Total 51
• The last column (Activity Time) – shows the number of
weeks required to complete each activity.
• E.g. Activity A takes 5 weeks, Activity B takes 6 weeks, etc.
• The sum of all activities is 51 weeks. However, because 2 or
more projects can be done simultaneously, the completion
time for the project is shorter.
15
 Project Network for the Western
Hills Shopping Center
E F
Prepare Obtain
Permits Approval

D
G
A Select
Construction
Prepare Contractor
Drawings

I
H
Start C
Develop
Finalize Tenant
Contracts
Tenants Move in
Finish
Prospectus

B
Identify new
Tenants

16
 Activity Immediate Activity
Activity Description Predecessor Time .
A. Prepare architectural drawings
— 5
B Identify
potential new tenants — 6
C Developprospectus for tenants A 4
D Select contractor A 3
E Prepare building permits A 1
F Obtain approval for building permits E 4
G Perform construction D, F 14
H Finalize contracts with tenants B, C 12
I Tenants move in E G.H 2 F
Prepare ObtainTotal
Approval 51
Permits

A D
G
Prepare Select
Construction
Drawings Contractor

I
H
Start C
Develop
Finalize Tenant
Contracts
Tenants Move in
Finish
Prospectus

B
Identify new
Tenants
17
 THE CRITICAL PATH
○ To determine the project completion time, we
have to analyze the network and identify the
CRITICAL PATH for the network
○ A PATH is a sequence of connected nodes that
leads from the START NODE to the FINISH
NODE. E.G. A-E-F-G-H-I. Other PATHS are
possible.
○ All paths in the network must be traversed in
order to complete the project.
○ NB. The longest path determines the total time
required to complete the project.

○ The Longest path is the CRITICAL PATH.

18
 DIFFERENT PATHS

E F
Prepare Obtain Approval
Permits

A D
G
Prepare Select
Construction
Drawings Contractor

I
H
Start C
Develop
Finalize Tenant
Contracts
Tenants Move in
Finish
Prospectus

B
Identify new
Tenants

19
 Western Hills Shopping Center Project Network
with Activity Times
E
F

1 4

A D G
5 3 14

Star
t C H I Finish
4 12 2

6 20
THE CRITICAL PATH – 3 steps

1.FORWARD PASS - Finding the EARLIEST

START TIME and EARLIEST FINISH TIME

2.BACKWARD PASS Finding the

LATEST FINISH TIME and LATEST START
TIME

3.SLACK

21
 Determining the Critical Path – the
FORWARD PASS through the network

Finding the EARLIEST START TIME and

EARLIEST FINISH TIME
Let ES = earliest START TIME for an
activity
EF = earliest FINISH time for an activity
t = activity time
Therefore, ES = EF – t; and EF = ES + t;

22
 Determining the Critical Path
- Earliest Start & Finish Times
○ The earliest start and earliest finish
times are written in the nodes to
the right of the activity
Earliest Finish
Earliest start Time
time

Activity A 0 5
Activity Time
5
23
 Determining the Critical Path
- Earliest Start & Finish Times

• Because an activity cannot be started

until all immediately preceding activities
have been finished,then the following rule
can be used to determine the earliest start
time for each activity:
•The earliest start time for an activity is
equal to the largest of the earliest finish
times for all its immediate predecessors.
(called the EARLIEST TIME RULE)
24
 Determining the Critical Path
- Earliest Start & Finish Times
Earliest Earliest Finish
start time Time
A 0 5
5

Start
C H
4 12

B 0 6
6
Earliest Finish
Earliest Time
start time
25
 Determining the Critical Path – FORWARD PASS
- Earliest Start & Finish Times For Activity H

Earliest
start time
A 0 5 Earliest Finish
Time for activity C
5 is 9

Start
C 5 9 H
4 12

B 0 6 What are the

earliest start
6 and finish times
for activity H?
Earliest Finish Time
for activity B is 6
26
 Determining the Critical Path – FORWARD PASS
- Earliest Start & Finish Times For Activity H

Earliest
start time
A 0 5 Earliest Finish
Time for activity C
5 is 9

Start
C 5 9 H 9 21
4 12

B 0 6 What are the

earliest start
6 and finish times
for activity H?
Earliest Finish Time
for activity B is 6
27
 Determining the Critical Path – FORWARD PASS
- Earliest Start & Finish Times For all Activities

E 5 6 F 6 10

1 4

A 0 5 D 5 8 G 10 24
5 3 14

Star
t C 5 9 H 9 21 I 24 26
Finis
4 12 2
h
B 0 6

6
28
Determining the Critical Path – FORWARD PASS
- Earliest Start & Finish Times For all Activities

• The earliest finish time for

activity I, the last activity in the
project, is 26 weeks.
•Therefore, we now know that the
total completion time for the
project is 26 weeks.
I 24 26
Finish
2
29
 Determining the Critical Path – the
BACKWARD PASS through the network
Finding the LATEST FINISH TIME and
LATEST START TIME
Let LS = latest START TIME for an activity
LF = latest FINISH time for an activity
t = activity time
Therefore, LATEST START TIME for an
activity is
LS = LF - t
30
 Determining the Critical Path – the BACKWARD
PASS through the network

■ Beginning with Activity I, we know that the latest

finish time is LF = 26 and that the activity time is 2.
Thus: LS = LF – t = 26 - 2 = 24
Earliest Finish
Earliest start time Time

Activity I 24 26
2 24 26
Activity Time
Latest start time Latest Finish Time
31
Determining the Critical Path – the BACKWARD
PASS through the network

○ Rule for determining the latest

finish time for each activity in the
network

○ The latest finish time for an activity

is the SMALLEST of the latest start
times for all activities that
immediately follow the activity.

32
 BACKWARD PASS through the network – The
Latest Start and Latest Finish Times

E 5 6 F 6 10

1 4

A 0 5 D 5 8 G 10 24
5 3 14

Star
t C 5 9 H 9 21 I 24 26
Finish
4 12 2 24 26

B 0 6

6
33
 BACKWARD PASS through the network –
The Latest Start and Latest Finish Times
E 5 6 F 6 10

1 5 6 4 6 10

A 0 5 D 5 8 G 10 24
5 0 5 3 7 10 14 10 24

Star
t C 5 9 H 9 21 I 24 26
Finis
4 8 12 12 12 24 2 24 26
h
B 0 6

6 6 12
34
 Determining the Critical Path – STEP 3 - SLACK

○ SLACK is the length of time an activity

can be delayed without increasing the
project completion time. The amount
of SLACK for an activity is computed
as:
Slack = LS – ES = LF – EF
E.g. Activity C is:
LS – ES = 8 – 5 = 3 weeks
I.e. Activity C can be delayed up to 3
weeks, and the entire project can still be
completed in 26 weeks
35
 SLACK TIME CALCULATIONS

Activity A, E, F, G, and I have zero SLACK => Critical Activities

Thus, the path formed by nodes A-E-F-G-I is the CRITICAL PATH
in the Western Hills Shopping Center Project Network.
36
 THE CRITICAL PATH: A-E-F-G-I
E 5 6 F 6 10

1 5 6 4 6 10

A 0 5 D 5 8 G 10 24
5 0 5 3 7 10 14 10 24

Star
t C 5 9 H 9 21 I 24 26
Finish
4 8 12 12 12 24 2 24 26

B 0 6

6 6 12
37
 THE CRITICAL PATH: A-E-F-G-I

E
F
Prepare
Obtain Approval
Permits

A D
G
Prepare Select
Construction
Drawings Contractor

Start C
H
Finalize Tenant
Tenants Move in Finish
Develop
Contracts
Prospectus

B
Identify new
Tenants

38
 CONTRIBUTIONS OF PERT/CPM ANSWER TO THE
QUESTIONS POSED AT THE START

1. How long will the project take to complete?

Answer: The project can be completed in 26 weeks if each
activity is completed on schedule.
○ 2. What are the scheduled start and completion times for each
activity?
○ Answer: The activity schedule (see Table 10.2) shows the earliest
start, latest start, earliest finish, and latest finish times for each
activity,
○ 3. Which activities are critical and must be completed exactly as
scheduled to keep the project on schedule?
○ Answer: A, E, F, G, and I are the critical activities.
○ 4. How long can non-critical activities be delayed before they
cause an increase in the completion time for the project?
Answer: The activity schedule (see Table) shows the slack
associated with each activity. 39
CONTRIBUTIONS OF PERT/CPM ANSWER TO THE
QUESTIONS POSED AT THE START

40
 Program Evaluation & Review
Technique/Critical Path Method
(PERT/CPM) Final Words.
○ Although larger projects may increase
substantially the time required to make the
necessary calculations, the procedure and
contributions of PERT/CPM to larger projects are
identical to those for the shopping center
expansion project. Furthermore, computer
packages may be used to carry out the steps of
the PERT/CPM procedure
41
 Program Evaluation & Review
Technique/Critical Path Method
(PERT/CPM) Final Words.
○ The activity schedule for the shopping center
expansion project was also developed by The
Management Scientist software package. Input
to the program included the activities, their
immediate predecessors, and the expected
activity times. Only a few minutes were required
to input the information and generate the
critical path and activity schedule.

42
 PROJECT SCHEDULING WITH
UNCERTAIN ACTIVITY TIMES

○ Because many activities are subject to random

variability, project managers need to account for
uncertainties in the activity times.
○ For repeat projects, such as construction and
maintenance projects, managers may have the
experience and historical data necessary to
provide accurate activity time estimates.
○ For new or unique projects, estimating the time
for each activity may be quite difficult.

43
 PROJECT SCHEDULING WITH
UNCERTAIN ACTIVITY TIMES

○ In many cases, activity times are

uncertain and are best described by a
range of possible values rather than by
one specific time estimate.
○ In these instances, the uncertain activity
times are treated as random variables
with associated probability distributions.

44
PROJECT SCHEDULING WITH
UNCERTAIN ACTIVITY TIMES

○ When activity times are uncertain,

three time estimates – optimistic,
most probable, and pessimistic –
allow the project manager to take
uncertainty into consideration in
determining the critical path and
the activity schedule.
○ This approach was developed by the
designers of PERT.

45
PROJECT SCHEDULING WITH
UNCERTAIN ACTIVITY TIMES – 3
Time Estimates.

○ Optimistic Time (a) ➔ the minimum

activity time if everything
progresses ideally
○ Most Probable Time (m) ➔ the most
probable activity time under normal
conditions
○ Pessimistic Time (b) ➔ the
maximum activity time if significant
delays are encountered.

46
Calculation of the Expected Timer (t)
from the 3 Time Estimates .
○ FORMULA

t = a + 4m + b
6

○ NB. When uncertain activity times are

used, the critical path calculations will
determine only the expected or average
time to complete the project. The actual
time required to complete the project
may differ

47
 Calculation of the Expected Timer (t) from the 3 Time
Estimates
Activity Optimistic Most Pessimistic Expected Time
(a) Probable (m) (b) t = a + 4m + b
6

A -- 4 5 12 6
B -- 1 1.5 5 2
C A 2 3 4 3
D A 3 4 11 5
E A 2 3 4 3
F C 1.5 2 2.5 2
G D 1.5 3 4.5 3
H B,E 2.5 3.5 7.5 4
I H 1.5 2 2.5 2
J F,G,I 1 2 3 48 2