Project Scheduling &

Project Management
Techniques

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♦ PROJECT MANAGEMENT
TECHNIQUES: PERT AND CPM
♦ The Framework of PERT and CPM
♦ Network Diagrams and Approaches
♦ Activity on Node Example
♦ Determining the Project Schedule
♦Forward Pass
♦Backward Pass
♦Calculating Slack Time and
Identifying the Critical Path(s)
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Management, 5e, and Operations
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 Outline - Continued
♦ Variability in Activity Times
♦Three Time Estimates in PERT
♦Probability of Project Completion
♦ Cost-Time Tradeoffs and Project
Crashing
♦ A Critique of PERT and CPM

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Heizer/Render – Principles of Operations 3-3 River, N.J. 07458
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 Learning Objectives
When you complete this chapter,
you should be able to :
Identify or Define:
♦ Critical path
♦ AOA and AON Networks
♦ Forward and Backward Passes
♦ Variability in Activity Times

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 Learning Objectives -
Continued
When you complete this chapter,
you should be able to :
Describe or Explain:
♦ The role of the project manager
♦ Program evaluation and review
technique (PERT)
♦ Critical path method (CPM)
♦ Crashing a project
♦ The Use of MS Project

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Heizer/Render – Principles of Operations 3-5 River, N.J. 07458
Management, 5e, and Operations
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 Project Scheduling
♦ Identifying
precedence
relationships © 1995 Corel Corp.

♦ Sequencing
activities
♦ Determining
activity times &
costs
♦ Estimating
PERT

material & worker

requirements Des
Acti
Tes
Buil
ign
v ity
d
t M
Mo
A
nth
M
F
J
J
J

♦ Determining
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Management, 5e, and Operations
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 Purposes of Project
Scheduling
♦ Shows the relationship of each
activity to others and to the
whole project.
♦ Identifies the precedence
relationships among activities.
♦ Encourages the setting of
realistic time and cost
estimates for each activity.
♦ Helps make better use of
people, money, and material
resources by identifying critical
bottlenecks in 3-7
the project.
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Management, 5e, and Operations
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 Project Management
Techniques
♦ Gantt chart
♦ Critical Path Method
(CPM)
♦ Program Evaluation &
Review Technique
(PERT)

© 1984-1994 T/Maker Co.

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 Gantt Chart

Time Period
Activity
J F M A M J J
Design
Build
Test

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 Service Activities for A
Delta Jet During a 60
Minute Layover

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Management, 5e, and Operations
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Project Control Reports
♦ Detailed cost breakdowns for
each task
♦ Total program labor curves
♦ Cost distribution tables
♦ Functional cost and hour
summaries
♦ Raw materials and expenditure
forecasts
♦ Variance reports
♦ Time analysis reports
♦ Work status reports
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Management, 5e, and Operations
Management, 7e
 PERT and CPM

♦ Network techniques
♦ Developed in 1950’s
♦ CPM by DuPont for chemical plants
(1957)
♦ PERT by Booz, Allen & Hamilton
with the U.S. Navy, for Polaris
missile (1958)
♦ Consider precedence
relationships and
interdependencies
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♦ Each uses a different estimate
Heizer/Render – Principles of Operations
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 Questions Which May Be
Addressed by PERT & CPM
♦ Is the project on schedule,
ahead of schedule, or behind
schedule?
♦ Is the project over or under cost
budget?
♦ Are there enough resources
available to finish the project
on time?
♦ If the project must be finished
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in less than the scheduled
Heizer/Render – Principles of Operations River, N.J. 07458
Management, 5e, and Operations
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The Six Steps Common to
PERT & CPM
♦ Define the project and prepare the
work breakdown structure,
♦ Develop relationships among the
activities. (Decide which activities
must precede and which must follow
others.)
♦ Draw the network connecting all of
the activities
♦ Assign time and/or cost estimates to
each activity
♦ Compute the longest time path
through the network. This is called
the critical path
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3-14
♦ Use the network to help plan,
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Management, 7e
 A Comparison of AON
and AOA Network
Conventions

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Heizer/Render – Principles of Operations 3-15 River, N.J. 07458
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 Milwaukee General
Hospital’s Activities and
Activit
Predecessors
Description Immediate
y Predecesso
A Build internal rs -
B components
Modify roof and floor -
C Construct collection stack A
D Pour concrete and install A, B
E frame
Build high-temperature C
F burner
Install pollution control C
G system
Install air pollution device D, E
H Inspect and test F, G
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 AON Network for
Milwaukee General
Hospital
F
A C

F
Star H
t
B D G
o w s
r
Ar w
sho nc
c e de
pre e
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 AOA Network (With
Dummy Activities) for
Milwaukee General
C
2 Constru 4
ct stack
coIn F
A
m ter ild

ntsta

Build burner
ne al
s

D
nt
co in Bu
po n

ro ll
umm ls H
1 6 7
E
y Inspect/T
M B Activi o n est
ro o G lut ice i
of dif ty o l v
/ y e
r floo D l lpld
3 5 s ta tro
Pour In on
concrete/ c
Install frame
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 Critical Path Analysis
♦ Provides activity information
♦ Earliest (ES) & latest (LS) start
♦ Earliest (EF) & latest (LF) finish
♦ Slack (S): Allowable delay
♦ Identifies critical path
♦ Longest path in network
♦ Shortest time project can be
completed
♦ Any delay on critical path
activities delays project
♦ Critical path activities have 0 slack
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 Earliest Start and
Finish Steps
♦ Begin at starting event and work
forward
♦ ES = 0 for starting activities
♦ ES is earliest start
♦ EF = ES + Activity time
♦ EF is earliest finish
♦ ES = Maximum EF of all
predecessors for non-starting
activities
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 Latest Start and Finish
Steps
♦ Begin at ending event and work
backward
♦ LF = Maximum EF for ending
activities
♦ LF is latest finish; EF is earliest
finish
♦ LS = LF - Activity time
♦ LS is latest start
♦ LF = Minimum LS of all
successors for3-21
non-ending
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Management, 7e
 Latest Start and Finish
Steps

e
Nam
ty
Activi
Earliest Earliest
Start ES EF
Finish

Latest LS LF
on
Durati
ty
Activi Latest
Start
Finish

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 Critical Path for
Milwaukee General Hospital
F
A C

F
Star H
t
B D G
o w s
r
Ar w
sho nc
c e de
pre e
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 AON Network for
Milwaukee General
HospitalIncludes Critical Path
A C FF
0 H2 2 H4 4 H7
0 A2 2 C4 1 13
2 2 3
E 0
Slack Slack 4 H 8 Slack=6 13H 15
0 0 F H
Star =0
H =0 4 8
0 t 0 4 13 15
0 2
B D Slack=0 G
S 0 B3 3 D7 8 G 13 Slack=0
tart H H H
1 4 4 8 8 13
3 4 5
Slack=1 Slack=1 Slack=0
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 Gantt Chart
Earliest Start and
Finish
Milwaukee General Hospital
1 2 3 4 5 6 7 8 9 10
A Build internal 1112 13 1415 16
components
B Modify roof and
floor
C Construct collection
stack
D Pour concrete and
install frame
E Build high-
temperature burner
F Install pollution
control system
G Install air pollution
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Heizer/Render – Principles of Operations
Management, 5e, and Operations
River, N.J. 07458

Management, 7e
 Gantt Chart
Latest Start and Finish
Milwaukee General Hospital
1 2 3 4 5 6 7 8 9 10
A Build internal 1112 13 1415 16
components
B Modify roof and
floor
C Construct collection
stack
D Pour concrete and
install frame
E Build high-
temperature burner
F Install pollution
control system
G Install air pollution
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Management, 7e
 Gantt Chart
Latest Start and Finish
Build House Project
111
Activity 123456789012

1-2 Fdn & frame

1-3 Buy shrubs
2-3 Roof
2-4 Interior work
3-4 Landscape

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 PERT Activity Times

♦ 3 time estimates
♦ Optimistic times (a)
♦ Most-likely time (m)
♦ Pessimistic time (b)
♦ Follow beta distribution

♦ Expected time: t = (a + 4m +
b)/6
♦ Variance of times: v = (b -
a)2/6
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 Project Times

♦ Expected project Used to obtain

probability of
time (T)
project
♦ Sum of critical path
completion!
activity times, t
♦ Project variance (V)
♦ Sum of critical path
activity variances, v

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 PERT Probability
Example
You’re a project
planner for General
Dynamics. A
submarine project © 1995
Corel Corp.

has an expected
completion time of
40 weeks, with a
standard deviation of
5 weeks. What is the
probability of
finishing the sub in
50 weeks or less?
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 Converting to
Standardized Variable
X - T 50 - 40
Z= = = 20
.
s 5
Normal Standardized
Distribution Normal Distribution
s= 5 sZ= 1

T= 40 50 X mz= 0 2.0 Z
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 Obtaining the
Probability
Standardized Normal
Probability Table (Portion)

Z .00 .01 .02

0.0.50000
.50399
.50798 s Z= 1
: : : :

2.0.97725
.97784
.97831 .9772
2.1.98214
.98257
.98300 mz= 5
0 2.0 Z
Probabilities in body
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 Variability of
Completion Time for
Noncritical Paths
♦ Variability of times for activities
on noncritical paths must be
considered when finding the
probability of finishing in a
specified time.
♦ Variation in noncritical activity
may cause change in critical
path.
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 Factors to Consider
when Crashing

♦ The amount by which an

activity is crashed is, in fact,
permissible.
♦ Taken together, the shortened
activity durations will enable
one to finish the project by the
due date.
♦ The total cost of crashing is as
small as possible.
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 Steps in Project
Crashing
♦ Compute the crash cost per time period.
For crash costs assumed linear over time:
(Crash cost − Normal cost
Crash cost per period =
(Normal time − Crash time)
♦ Using current activity times, find the
critical path
♦ If there is only one critical path, then
select the activity on this critical path that
(a) can still be crashed, and (b) has the
smallest crash cost per period. Note that
a single activity may be common to more
than one critical path
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♦
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 Crash and Normal
Times and Costs for
Activity B

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 Cost-Time Curves Used
in Crashing Analysis

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 Advantages of
PERT/CPM
♦ Especially useful when scheduling
and controlling large projects.
♦ Straightforward concept and not
mathematically complex.
♦ Graphical networks aid perception of
relationships among project
activities.
♦ Critical path & slack time analyses
help pinpoint activities that need to
be closely watched.
♦ Project documentation and graphics
point out who is responsible for
various activities.
♦ Applicable to a wide variety of
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Management, 7e
 Limitations of
PERT/CPM
♦ Assumes clearly defined,
independent, & stable activities
♦ Specified precedence
relationships
♦ Activity times (PERT) follow
beta distribution
♦ Subjective time estimates
♦ Over-emphasis on critical path

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