Project Management

PERT/CPM
Applied Business Tools and Technology
An Introduction to Management Science
Quantitative Approaches to Decision Making
Anderson, Sweeney, Wiiliams, Camm, Cochran, Fry & Ohlmann
PERT/CPM
• PERT
• Program Evaluation and Review Technique
• Developed by U.S. Navy for Polaris missile project
• Developed to handle uncertain activity times
• CPM
• Critical Path Method
• Developed by DuPont & Remington Rand
• Developed for industrial projects for which activity times generally
were known
• Today’s project management software packages have
combined the best features of both approaches.
PERT/CPM

• PERT and CPM have been used to plan, schedule, and

control a wide variety of projects:
• R&D of new products and processes
• Construction of buildings and highways
• Maintenance of large and complex equipment
• Design and installation of new systems
PERT/CPM
• PERT/CPM is used to plan the scheduling of individual
activities that make up a project.
• Projects may have as many as several thousand
activities.
• A complicating factor in carrying out the activities is
that some activities depend on the completion of
other activities before they can be started.
PERT/CPM
• Project managers rely on PERT/CPM to help them
answer questions such as:
• What is the total time to complete the project?
• What are the scheduled start and finish dates for each
specific activity?
• Which activities are critical and must be completed exactly
as scheduled to keep the project on schedule?
• How long can noncritical activities be delayed before they
cause an increase in the project completion time?
Project Network
• A project network can be constructed to model the precedence
of the activities.
• The nodes of the network represent the activities.
• The arcs of the network reflect the precedence relationships of
the activities.
• A critical path for the network is a path consisting of activities
with zero slack.
Example: Frank’s Fine Floats
Frank’s Fine Floats is in the business of building
elaborate parade floats. Frank ‘s crew has a new float to
build and want to use PERT/CPM to help them manage
the project.
The table on the next slide shows the activities that
comprise the project as well as each activity’s estimated
completion time (in days) and immediate predecessors.
Frank wants to know the total time to complete the
project, which activities are critical, and the earliest and
latest start and finish dates for each activity.
Example: Frank’s Fine Floats
Immediate Completion
Activity Description Predecessors Time (days)
A Initial Paperwork --- 3
B Build Body A 3
C Build Frame A 2
D Finish Body B 3
E Finish Frame C 7
F Final Paperwork B,C 3
G Mount Body to Frame D,E 6
H Install Skirt on Frame C 2
Example: Frank’s Fine Floats
B D
3 3 G
6
F
A 3
Start Finish
3 E
C 7 H
2 2

• Project Network
Earliest Start and Finish Times

• Step 1: Make a forward pass through the network as follows: For

each activity i beginning at the Start node, compute:
• Earliest Start Time = the maximum of the earliest finish times of all activities
immediately preceding activity i. (This is 0 for an activity with no
predecessors.)
• Earliest Finish Time = (Earliest Start Time) + (Time to complete activity i ).
The project completion time is the maximum of the Earliest Finish
Times at the Finish node.
Example: Frank’s Fine Floats
• Earliest Start and Finish Times

B 3 6 D 6 9
3 3 G 12 18
6
F 6 9

A 0 3 3
Start Finish
3 E 5 12

C 3 5 7
H 5 7
2 2
Latest Start and Finish Times
• Step 2: Make a backwards pass through the network as follows:
Move sequentially backwards from the Finish node to the Start
node. At a given node, j, consider all activities ending at node j.
For each of these activities, i, compute:
• Latest Finish Time = the minimum of the latest start times beginning at
node j. (For node N, this is the project completion time.)
• Latest Start Time = (Latest Finish Time) - (Time to complete activity i ).
Example: Frank’s Fine Floats
• Latest Start and Finish Times

B 3 6 D 6 9
3 6 9 3 9 12 G 12 18
6 12 18
F 6 9

A 0 3 3 15 18
Start Finish
3 0 3 E 5 12

C 3 5 7 5 12
H5 7
2 3 5 2 16 18
Determining the Critical Path

• Step 3: Calculate the slack time for each activity by:

Slack = (Latest Start) - (Earliest Start), or
= (Latest Finish) - (Earliest Finish).
Example: Frank’s Fine Floats
• Activity Slack Time

Activity ES EF LS LF Slack
A 0 3 0 3 0 (critical)
B 3 6 6 9 3
C 3 5 3 5 0 (critical)
D 6 9 9 12 3
E 5 12 5 12 0 (critical)
F 6 9 15 18 9
G 12 18 12 18 0 (critical)
H 5 7 16 18 11
Example: Frank’s Fine Floats
• Determining the Critical Path
• A critical path is a path of activities, from the Start node to
the Finish node, with 0 slack times.

• Critical Path: A–C–E–G

• The project completion time equals the maximum of the

activities’ earliest finish times.
• Project Completion Time: 18 days
Example: Frank’s Fine Floats
• Critical Path

B 3 6 D 6 9
3 6 9 3 9 12 G 12 18
6 12 18
F 6 9

A 0 3 3 15 18
Start Finish
3 0 3 E 5 12

C 3 5 7 5 12
H5 7
2 3 5 2 16 18

Critical Path: Start – A – C – E – G – Finish

Critical Path Procedure

■ Step 1. Develop a list of the activities that make up the

project.

■ Step 2. Determine the immediate predecessor(s) for

each activity in the project.

■ Step 3. Estimate the completion time for each activity.

■ Step 4. Draw a project network depicting the activities

and immediate predecessors listed in steps 1 and 2.
Critical Path Procedure

■ Step 5. Use the project network and the activity time

estimates to determine the earliest start and the earliest
finish time for each activity by making a forward pass
through the network. The earliest finish time for the last
activity in the project identifies the total time required to
complete the project.

■ Step 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.
Critical Path Procedure

■ Step 7. Use the difference between the latest start time

and the earliest start time for each activity to determine
the slack for each activity.

■ Step 8. Find the activities with zero slack; these are the
critical activities.

■ Step 9. Use the information from steps 5 and 6 to

develop the activity schedule for the project.
Example: EarthMover, Inc.
EarthMover is a manufacturer of road construction
equipment including pavers, rollers, and graders.
The
company is faced with a new project, introducing a
new
line of loaders. Management is concerned that the
project might take longer than 26 weeks to complete
without crashing some activities.
Example: EarthMover, Inc.

Immediate Completion
Activity Description Predecessors Time (wks)
A Study Feasibility --- 6
B Purchase Building A 4
C Hire Project Leader A 3
D Select Advertising Staff B 6
E Purchase Materials B 3
F Hire Manufacturing Staff B,C 10
G Manufacture Prototype E,F 2
H Produce First 50 Units G 6
I Advertise Product D,G 8
Example: EarthMover,
• PERT Network
Inc.
D
6 I
B 8
4 Finish
A E
Start H
6 3 G
6
2
C F
3 10
Example: EarthMover, Inc.
• Earliest/Latest Times
Activity ES EF LS LF Slack
A 0 6 0 6 0*
B 6 10 6 10 0*
C 6 9 7 10 1
D 10 16 16 22 6
E 10 13 17 20 7
F 10 20 10 20 0*
G 20 22 20 22 0*
H 22 28 24 30 2
I 22 30 22 30 0*
 Example: EarthMover, Inc.
• Critical Activities

D 10 16
6 16 22 I 22 30
B 6 10 8 22 30
4 6 10 Finish
A 0 6 E 10 13
Start H 22 28
6 0 6 3 17 20 G 20 22
6 24 30
2 20 22
C 6 9 F 10 20
3 7 10 10 10 20
Crashing Activity Times
Example: Frank’s Fine Floats
Immediate Completion
Activity Description Predecessors Time (days)
A Initial Paperwork --- 3
B Build Body A 3
C Build Frame A 2
D Finish Body B 3
E Finish Frame C 7
F Final Paperwork B,C 3
G Mount Body to Frame D,E 6
H Install Skirt on Frame C 2
Frank’s Fine Floats
• Calculate the slack time for each activity by:
Slack = (Latest Start) - (Earliest Start), or
= (Latest Finish) - (Earliest Finish).
Which among the following activities can be crashed?
Constraints : The company can only afford to spend 75 crash cost per
day. Which of these activities should the owner expedite?
Example: Frank’s Fine Floats
• Activity Slack Time

Activity ES EF LS LF Slack
A 0 3 0 3 0 (critical)
B 3 6 6 9 3
C 3 5 3 5 0 (critical)
D 6 9 9 12 3
E 5 12 5 12 0 (critical)
F 6 9 15 18 9
G 12 18 12 18 0 (critical)
H 5 7 16 18 11
Example: Frank’s Fine Floats
• Determining the Critical Path
• A critical path is a path of activities, from the Start node to
the Finish node, with 0 slack times.

• Critical Path: A–C–E–G

• The project completion time equals the maximum of the

activities’ earliest finish times.
• Project Completion Time: 18 days
ACTI IMMEDIA COMPLET Normal Days Total Actual Crash Crash
VITY TE ION TIME Cost Expedite Cost of Crash Complet cost per
PREDECES OR DATE d Complet Cost ion day
SOR ion CC/CD
A - 3 90 2 220
B A 3 150
C A 2 150 1 250
D B 3 200

E C 7 420 4 700

F B,C 3 180
G D, E 6 400 4 800
H C 2 200
ACTI IMMEDIA COMPLET Normal Days Total Actual Crash Crash
VITY TE ION TIME Cost Expedite Cost of Crash Complet cost per
PREDECES OR DATE d Complet Cost ion day
SOR ion CC/CD
A - 3 90 2 220 130 1 65
B A 3 150
C A 2 150 1 250 100 1 100
D B 3 200

E C 7 420 4 700 280 3 70

F B,C 3 180
G D, E 6 400 4 800 400 2 100
H C 2 200
ACTI IMMEDIA COMPLET Normal Days Total Actual Crash Crash
VITY TE ION TIME Cost Expedite Cost of Crash Complet cost per
PREDECES OR DATE d Complet Cost ion day
SOR ion CC/CD
A - 3 90 2 220 130 1 65
B A 3 150
C A 2 150 1 250 100 1 100
D B 3 200

E C 7 420 4 700 280 3 70

F B,C 3 180
G D, E 6 400 4 800 400 2 100
H C 2 200
ACTI IMMEDIA COMPLET Normal Days Total Actual Crash Crash
VITY TE ION TIME Cost Expedite Cost of Crash Complet cost per
PREDECES OR DATE d Complet Cost ion day
SOR ion CC/CD
A - 3 90 2 220 130 1 65
B A 3 150
C A 2 150 1 250 100 1 100
D B 3 200

E C 7 420 4 700 280 3 70

F B,C 3 180
G D, E 6 400 4 800 400 2 100
H C 2 200
PROCEED TO CRASHING
ACTIVITY
References
• Burtles, J., Noakes-Fry, F. (2016) Principles and Practices of Business
Continuity; Tools and Techniques 2nd Edition, Rothstein Publishing

• Anderson, D. (2019). An introduction to management science:

quantitative approaches to decision making. Cengage Learning.