Prepared By: Suruchi Gupta Himanshu Raj

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Graphical portrayal of activities and event Shows dependency relationships between tasks/activities in a project Clearly shows tasks that must precede (precedence) or follow (succeeding) other tasks in a logical manner Clear representation of plan a powerful tool for planning and controlling project

Network analysis is the general name given to certain specific techniques which can be used for the planning, management and control of projects Use of nodes and arrows Arrows An arrow leads from tail to head directionally Indicate ACTIVITY, a time consuming effort that is required to perform a part of the work. Nodes  A node is represented by a circle - Indicate EVENT, a point in time where one or more activities start and/or finish. Activity A task or a certain amount of work required in the project Requires time to complete Represented by an arrow Dummy Activity Indicates only precedence relationships Does not require any time of effort

Event Signals the beginning or ending of an activity Designates a point in time Represented by a circle (node) Network Shows the sequential relationships among activities using nodes and arrows Activity-on-node (AON)
nodes represent activities, and arrows show precedence relationships Activity-on-arrow (AOA) arrows represent activities and nodes are events for points in time

Lay foundation 2 3

3
0 1

Dummy Build house Finish work

1
Design house and obtain financing

2
Order and receive materials

4
Select paint 1

3 1

6
Select carpet

B A A must finish before either B or C can start C

A C B A B A C D B Dummy C D A must finish before B can start both A and C must finish before D can start both A and B must finish before C can start

both A and C must finish before either of B or D can start

History of PERT & CPM

CPM was developed by Du Pont and the emphasis was on the trade-off
between the cost of the project and its overall completion time (e.g. for certain activities it may be possible to decrease their completion times by spending more money - how does this affect the overall completion time of the project?)

PERT was developed by the US Navy for the planning and control of the
Polaris missile program and the emphasis was on completing the program in the shortest possible time. In addition PERT had the ability to cope with uncertain activity completion times (e.g. for a particular activity the most likely completion time is 4 weeks but it could be anywhere between 3 weeks and 8 weeks).

CPM Calculation
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Path
A connected sequence of activities leading from the starting event to the ending event

Critical Path
The longest path (time); determines the project duration

Critical Activities
All of the activities that make up the critical path

Earliest Start Time (ES) earliest time an activity can start ES = maximum EF of immediate predecessors Earliest finish time (EF) earliest time an activity can finish earliest start time plus activity time En = max{EFij}= max {En-1 +tij}

Forward Pass

Backward Pass
Latest Start Time (LS) Latest time an activity can start without delaying critical path time Ej-Ei=Lj-Li= tij Latest finish time (LF) latest time an activity can be completed without delaying critical path time LS = minimum LS of immediate predecessors

Activity, Duration, ES, EF, LS, LF

EF = earliest finish time ES = earliest start time Activity 3

2 LS = latest start time LF = latest finish time

CPM analysis
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Draw the CPM network Analyze the paths through the network Determine the float for each activity Compute the activitys float (Lj- tij)-Ei = LSij - EFij Float is the maximum amount of time that this activity can be delay in its completion before it becomes a critical activity, i.e., delays completion of the project Find the critical path is that the sequence of activities and events where there is no slack i.e.. Zero slack Longest path through a network Find the project duration is minimum project completion time

CPM Example:
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CPM Network
F, 15 2 A, 6 6 1 B, 8 3 C, 5 E, 9 4 D, 13 5 J, 12 I,6 G, 17 7 H, 9

ES and EF Times
E7 E2 0 6 A, 6 6 2 F, 15 G, 17 6 0 1 8 B, 8 E3 3 C, 5 0 5 4 E4 5 8 D, 13 5 E, 9 E5 ES EF J, 12 E6 8 E8 I,6 7 H, 9

E1 0

ES and EF Times
E2 0 6 A, 6 6 2 6 21 F, 15 6 23 G, 17 6 0 1 8 B, 8 E3 3 C, 5 0 5 4 E4 5 8 D, 13 8 21 5 E, 9 5 14 E5 21 ES EF J, 12 E6 23 8 E8 I,6 E7 21 7 H, 9

E1 0

ES and EF Times
E2 0 6 A, 6 6 2 6 21 F, 15 6 23 G, 17 6 0 1 8 B, 8 E3 3 C, 5 0 5 4 E4 5 8 D, 13 8 21 5 E, 9 5 14 E5 21 J, 12 21 33 E6 23 I,6 23 29 8 E8 33 Projects EF = 33 ES EF E7 21 7 H, 9 21 30

E1 0

LS and LF Times
L7 L2 0 6 A, 6 2 F, 15 G, 17 6 L6 1 B, 8 L3 3 C, 5 E, 9 4 L4 D, 13 5 L5 LS LF J, 12 21 33 I,6 27 33 8 L8 33 7 H, 9 24 33

E1 0 L1

LS and LF Times
L2 0 6 A, 6 2 9 24 F, 15 10 27 G, 17 6 L6 27 1 B, 8 L3 3 C, 5 E, 9 12 21 4 L4 D, 13 8 21 5 L5 21 LS LF J, 12 21 33 I,6 27 33 8 L8 33 L7 24 7 H, 9 24 33

E1 0 L1

LS and LF Times
L2 3 9 0 6 A, 6 9 2 9 24 F, 15 10 27 G, 17 6 0 1 8 B, 8 L3 3 C, 5 7 12 4 L4 12 8 D, 13 8 21 5 E, 9 12 21 L5 21 LS LF J, 12 21 33 L6 27 I,6 27 33 8 L8 33 L7 24 7 H, 9 24 33

E1 0 L1

Calculation of Float
Activit A B C D E F G H I J Time 6 8 5 13 9 15 17 9 6 12 ES 0 0 0 8 5 6 6 21 23 27 EF 6 8 5 21 14 21 23 30 29 33 S 3 0 7 8 12 9 10 24 21 27 F 6 8 12 21 21 24 27 33 33 33 EF F (ES- S) (EF- F) 3 0 7 0 7 3 4 3 3 0 0 0 7 0 7 3 4 3 3 0

` Float(FF&BF)
3 F, 15 3 A, 6 2 G, 17 4 6 1 B, 8 0 3 C, 5 7 4 D, 13 0 5 E, 9 7 I,6 4 8 J, 12 0 7 H, 9 3

` Critical

Path
F, 15 2 G, 17 6 I,6 7 H, 9

A, 6

B, 8 3 C, 5 E, 9 4 D, 13 5 J, 12

PERT
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PERT is based on the assumption that an activitys duration follows a probability distribution instead of being a single value Three time estimates are required to compute the parameters of an activitys duration distribution: pessimistic time (tp ) - the time the activity would take if things did not go well most likely time (tm ) - the consensus best estimate of the activitys duration optimistic time (to ) - the time the activity would take if things did go well
Mean (expected time): te =

tp + 4 tm + to
6 2

Variance: Vt

=W2

tp - to
6

PERT analysis
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Draw the network. Analyze the paths through the network and find the critical path. The length of the critical path is the mean of the project duration probability distribution which is assumed to be normal The standard deviation of the project duration probability distribution is computed by adding the variances of the critical activities (all of the activities that make up the critical path) and taking the square root of that sum Probability computations can now be made using the normal distribution table.

Probability Computation
Determine probability that project is completed within specified time x-Q Z= W where Q = tp = project mean time W = project standard mean time x = (proposed ) specified time

Normal Distribution of Project Time

Pr b bilit

ZW

Q = tp

Time

PERT Example
Immed. Optimistic Most Likely Pessimistic Activity Predec. Time (Hr.) Time (Hr.) Time (Hr.) A -4 6 8 B -1 4.5 5 C A 3 3 3 D A 4 5 6 E A 0.5 1 1.5 F B,C 3 4 5 G B,C 1 1.5 5 H E,F 5 6 7 I E,F 2 5 8 J D,H 2.5 2.75 4.5 K G,I 3 5 7

PERT Example
PERT Network
D

C B F G I K

PERT Example
Activity A B C D E F G H I J K Expected Time 6 4 3 5 1 4 2 6 5 3 5 Variance 4/9 4/9 0 1/9 1/36 1/9 4/9 1/9 1 1/9 4/9

PERT Example
Activity ES
A B C D E F G H I J K 0 0 6 6 6 9 9 13 13 19 18

EF
6 4 9 11 7 13 11 19 18 22 23

LS
0 5 6 15 12 9 16 14 13 20 18

LF
6 9 9 20 13 13 18 20 18 23 23

Slack
0 *critical 5 0* 9 6 0* 7 1 0* 1 0*

PERT Example
Vpath = VA + VC + VF + VI + VK = 4/9 + 0 + 1/9 + 1 + 4/9 = 2 Wpath = 1.414 z = (24 - 23)/W!(24-23)/1.414 = .71 From the Standard Normal Distribution table: P(z < .71) = .5 + .2612 = .7612

Comparison Between CPM and PERT

CPM 1 Uses network, calculate float or slack, identify critical path and activities, guides to monitor and controlling project Uses one value of activity time PERT Same as CPM

Requires 3 estimates of activity time Calculates mean and variance of time

Used where times can be estimated Used where times cannot be estimated with confidence, familiar activities with confidence. Unfamiliar or new activities Minimizing cost is more important Example: construction projects, building one off machines, ships, etc Meeting time target or estimating percent completion is more important Example: Involving new activities or products, research and development etc

4 5

BENEFITS OFCPM / PERT NETWORK

Consistent framework for planning, scheduling, monitoring, and controlling project. Shows interdependence of all tasks, work packages, and work units. Helps proper communications between departments and functions. Determines expected project completion date. Identifies so-called critical activities, which can delay the project completion time.

Continued.
Identified activities with slacks that can be delayed for specified periods without penalty, or from which resources may be temporarily borrowed Determines the dates on which tasks may be started or must be started if the project is to stay in schedule. Shows which tasks must be coordinated to avoid resource or timing conflicts. Shows which tasks may run in parallel to meet project completion date

Limitations to CPM/PERT
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Clearly defined, independent and stable activities Specified precedence relationships Over emphasis on critical paths Deterministic CPM model Activity time estimates are subjective and depend on judgment PERT assumes a beta distribution for these time estimates, but the actual distribution may be different PERT consistently underestimates the expected project completion time due to alternate paths becoming critical

References
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Sharma, J.K.(3rd ), Operations Research Theory and Applications, MACMILLAN INDIA. LTD(New Delhi) Swarup, k. et al, (14th ), Operations Research, Sultan Chand & Sons(New Delhi) www.intervention.org www.netmba.com/operations