Bba - 6sem - Project Appraisal - Lecture 41,42&43

Bba- 6 sem
Project Appraisal ( Lecture 41,42&43)

Date:- 24,25&26 May
PERT & CPM

PERT and CPM are the two network-based project
management techniques, which exhibit the flow and
sequence of the activities and events.
PERT : Program Evaluation Review Technique.

PERT is a project management planning tool used to calculate the
amount of time it will take to realistically finish a project. PERT stands for
Program Evaluation Review Technique.
Project Evaluation Review Technique or PERT is used to identify the

time it takes to finish a particular task or activity. It is a system that helps in
proper scheduling and coordination of all tasks throughout the project. It
also helps in keeping track of the progress, or lack of the project.
No matter how big or small a project is, estimates can be too optimistic or
pessimistic, but using a PERT chart will help determine more realistic
estimates.
Creating a PERT Chart
A flowchart is used to depict the Project Evaluation Review Technique. It

represents the events, indicating the start or end of the activities. The
directorial lines indicate the tasks that need to be completed, and the
arrows show the sequence of the activities.
There are four definitions of time needed to finish an activity:
Optimistic time – The least amount of time to complete a task

Pessimistic time – The maximum amount of time to complete a task
Most likely time – Assuming there are no problems, it is the best estimate
of how long it would take to complete a task.
Expected time – Assuming there are problems, it is the best estimate of
how long it would take to complete a task.
Here are several terms used in a PERT chart:
Float/Slack – Refers to the amount of time a task can be delayed without

resulting in an overall delay to other tasks or the project
Critical Path – Indicates the longest possible continuous path from the
start to the end of a task or event
Critical Path Activity – Refers to an activity without slack
Lead Time – Refers to the amount of time needed to finish a task without
affecting subsequent tasks
Lag Time – The earliest time by which a successor event can follow
another event
Fast Tracking – Refers to handling tasks or activities in parallel
Crashing Critical Path – Shortening the amount of time to do a critical
task
To implement a PERT chart:
● Identify the different tasks needed to complete a project. Make sure

to add these in the right order and indicate the duration of each task.
● Create a network diagram. Use arrows to represent the activities and
nodes as milestones.
● Determine the critical path and possible hack.
Advantages of PERT
Here are several benefits of using PERT in project management:

● It helps maximize the use of resources.
● It makes project planning more manageable.
● It’s useful even if there is little or no previous schedule data.
● It enables project managers to determine a more definite completion
date.
Disadvantages of PERT
Like any other method, PERT comes with its share of limitations:
● In complex projects, many find PERT hard to interpret, so they also

use a Gantt Chart, another popular method for project management.
● It can be tedious to update, modify and maintain the PERT diagram.
● It entails a subjective time analysis of activities, and for those who are
less experienced or biased, it may affect the project’s schedule.
CPM: Critical Path Method

The critical path method (CPM), or critical path analysis (CPA), is an
algorithm for scheduling a set of project activities. It is commonly used in
conjunction with the program evaluation and review technique (PERT). A
critical path is determined by identifying the longest stretch of dependent
activities and measuring the time required to complete them from start to
finish.
The critical path method (CPM) is a project modeling technique developed

in the late 1950s by Morgan R. Walker of DuPont and James E. Kelley Jr.
of Remington Rand.
Critical Path Analysis is commonly used with all forms of projects, including
construction, aerospace and defense, software development, research
projects, product development, engineering, and plant maintenance,
among others. Any project with interdependent activities can apply this
method of mathematical analysis. The first time CPM was used for major
skyscraper development was in 1966 while constructing the former World
Trade Center Twin Towers in New York City.
CPM provides the following benefits:
● Provides a graphical view of the project.

● Predicts the time required to complete the project.
● Shows which activities are critical to maintaining the schedule and
which are not.
CPM models the activities and events of a project as a network. Activities

are depicted as nodes on the network and events that signify the beginning
or ending of activities are depicted as arcs or lines between the nodes.
Steps in CPM Project Planning
1.Specify the individual activities.

2.Determine the sequence of those activities.
3.Draw a network diagram.
4.Estimate the completion time for each activity.
5.Identify the critical path (longest path through the network)
6. Update the CPM diagram as the project progresses.
1. Specify the Individual Activities
From the work breakdown structure, a listing can be made of all the
activities in the project. This listing can be used as the basis for adding
sequence and duration information in later steps.
2. Determine the Sequence of the Activities
Some activities are dependent on the completion of others. A listing of the

immediate predecessors of each activity is useful for constructing the CPM
network diagram.
3. Draw the Network Diagram

Once the activities and their sequencing have been defined, the CPM
diagram can be drawn. CPM originally was developed as an activity on
node (AON) network, but some project planners prefer to specify the
activities on the arcs.
4. Estimate Activity Completion Time
The time required to complete each activity can be estimated using past
experience or the estimates of knowledgeable persons. CPM is a
deterministic model that does not take into account variation in the
completion time, so only one number is used for an activity's time estimate.
5. Identify the Critical Path
The critical path is the longest-duration path through the network. The
significance of the critical path is that the activities that lie on it cannot be
delayed without delaying the project. Because of its impact on the entire
project, critical path analysis is an important aspect of project planning.
The critical path can be identified by determining the following four

parameters for each activity:
ES - earliest start time: the earliest time at which the activity can start given
that its precedent activities must be completed first.
EF - earliest finish time, equal to the earliest start time for the activity plus
the time required to complete the activity.
LF - latest finish time: the latest time at which the activity can be completed
without delaying the project.
LS - latest start time, equal to the latest finish time minus the time required
to complete the activity.
The slack time for an activity is the time between its earliest and latest start
time, or between its earliest and latest finish time. Slack is the amount of
time that an activity can be delayed past its earliest start or earliest finish
without delaying the project.
The critical path is the path through the project network in which none of
the activities have slack, that is, the path for which ES=LS and EF=LF for
all activities in the path. A delay in the critical path delays the project.
Similarly, to accelerate the project it is necessary to reduce the total time
required for the activities in the critical path.
6. Update CPM Diagram
As the project progresses, the actual task completion times will be known
and the network diagram can be updated to include this information. A new
critical path may emerge, and structural changes may be made in the
network if project requirements change.
COMPARISON OF PERT & CPM
BASIS FOR PERT CPM

COMPARISON
Meaning PERT is a project CPM is a statistical
management technique of project
technique, used to management that
manage uncertain manages well defined
activities of a project. activities of a project.
What is it? A technique of A method to control
planning and control of cost and time.
time.
Orientation Event-oriented Activity-oriented
Evolution Evolved as Research & Evolved as
Development project Construction project
Model Probabilistic Model Deterministic Model
Focuses on Time Time-cost trade-off
Appropriate for High precision time Reasonable time
estimate estimate
Management of Unpredictable Activities Predictable Activities
Nature of jobs Non-repetitive nature Repetitive Nature
Critical and Non-critical No differentiation Differentiation
activities
Suitable for Research and Non-research projects
Development Project like civil construction,
ship building etc.
Crashing concept Not Applicable Applicable

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Bba- 6 sem

Project Appraisal ( Lecture 41,42&43)

PERT & CPM

PERT : Program Evaluation Review Technique.

Project Evaluation Review Technique or PERT is used to identify the

Creating a PERT Chart

A flowchart is used to depict the Project Evaluation Review Technique. It

There are four definitions of time needed to finish an activity:

Optimistic time – The least amount of time to complete a task

Here are several terms used in a PERT chart:

Float/Slack – Refers to the amount of time a task can be delayed without

To implement a PERT chart:

● Identify the different tasks needed to complete a project. Make sure

Here are several benefits of using PERT in project management:

● In complex projects, many find PERT hard to interpret, so they also

CPM: Critical Path Method

The critical path method (CPM) is a project modeling technique developed

● Provides a graphical view of the project.

CPM models the activities and events of a project as a network. Activities

Steps in CPM Project Planning

1.Specify the individual activities.

1. Specify the Individual Activities

2. Determine the Sequence of the Activities

Some activities are dependent on the completion of others. A listing of the

3. Draw the Network Diagram

4. Estimate Activity Completion Time

5. Identify the Critical Path

The critical path can be identified by determining the following four

6. Update CPM Diagram

COMPARISON OF PERT & CPM

BASIS FOR PERT CPM

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