PROJECT

MANAGEMENT
NETWORK ANALYSIS
(CPM & PERT)
BY

G.Venkatachalam, M.Com, MBA, M.Phil, (Ph.D)

Associate Professor/MBA

What is a project?
A project is an interrelated set of activities that
has definite starting and ending points and that
result in a unique product or service
Cuts across organizational lines they need varied
skills of different profession
Uncertainties like new technology & external
environment can change the character of the
project
Personnel, materials, facilities etc. are temporarily
assembled to accomplish a goal within a specified

NETWORK ANALYSIS
Network Analysis refers to a number of techniques for
the planning and control of complex projects.
The two most frequently used forms of network
planning are:
1. Programme Evaluation and Review Technique
(PERT)
2. Critical Path Method (CPM)

WHAT IS A NETWORK?
A network is a graphical diagram consisting of
certain configuration of Arrows () and Nodes
() for showing the logical sequence of various tasks
to be performed to achieve the project objective.

Project management generally consists of

three phases.
Planning:

Planning involves setting the objectives of the

project. Identifying various activities to be performed
and determining the requirement of resources such as men,
materials, machines, etc.
The cost and time for all the activities are estimated,
Scheduling:
Based on the time estimates, the start and finish
times for each activity are worked out by applying
forward and backward pass techniques, critical path is
identified, along with the slack and float for the non-critical
paths.
Controlling:
Controlling refers to analyzing and evaluating the
actual progress against the plan. Reallocation of
resources, crashing and review of projects with periodical

COMPONENTS of PERT/CPM
NETWORK
PERT / CPM networks contain two major
components
i. Activities, and
Activity:
ii. EventsAn activity represents an action and consumption

of resources (time, money, energy) required to complete a

portion of a project. Activity is represented by an arrow,
(Figure 8.1).

Event: An event (or node) will always occur at the beginning and
end of an activity. The event has no resources and is represented
by a circle. The tail event and head event respectively, (Figure 8.2).

PROGRAMME EVALUATION AND

REVIEW TECHNIQUE (PERT)
It is a mgt Aid for completing Polaris Ballistic Missile
Project in USA in oct-1958.
The initial step in PERT/CPM project scheduling
process is the determination of all specific activities that
comprise the project and their relationships.
PERT become very popular technique used for project
planning and control.
It helps reduce both the time and cost of the project.

Steps involved in PERT

The activities involved in the project are
drawn up in sequential relationship to
show what activity follows what.
The time required for completing each
activity of the project
The critical activities of the project are
determined
The variability of the project duration and
probability of the project completion in a
given time period are calculated

Advantages of PERT
It determines the expected time required
for completing each activity
It helps complete the project with in given
period of time
It helps mgt uncertainties involved in the
project and thus reduce the risk element of
the project
It enables mgt to make optimum allocation
of limited resources
It presses for the right action, at the right
point and the right time in the organisation.

CRITICAL PATH METHOD(CPM)

CPM was first developed in USA by the E.I Dupont

Nemours & co in 1956 for doing periodic overhauling
and maintenance of a chemical plant.
Resulted in reducing the shut-down period from 130hrs
to 90 hrs and saving company Dollar 1Million.
CPM differentiates between planning and scheduling of
the

project.

While

planning

refers

to

determination of activities to be accomplished,

scheduling refers to the introduction of time
schedule for each activity of the project.

(i) From the data given in the problem, the activity network is
constructed as shown in Figure given below

Advantages of Critical Path Method(CPM)

It helps in ascertaining the time schedule of
activities having sequential relationship
It makes control easier for the management
It identifies the most critical elements in the
project. Thus, the mgt is kept alert and
prepared to pay due attention to the critical
activities of the project
It makes better and detailed planning possible

Difference between PERT

and CPM

S.N
o

PERT

CPM

Its origin is military

Its origin is industry

It is event oriented

It is an activity oriented

It allows uncertainty

It does not allows

uncertainty

It is a probabilistic model

It is a deterministic model

It is time based

It is cost based

It does not differentiate

between critical and non
critical activity

It marks critical activity

It averages time

It does not average time

It is suitable when high

precision is required in
time estimates Ex.

It is suitable when
reasonable precision is
required in time estimates

THANK YOU