...CPM/PERT Presented by DATE- 08 Aug. 2014 Shravan Kumar Project “A project is a series of activities directed to accomplishment of a desired objective.” Plan your work first…..then work your plan Network analysis Introduction Network analysis is the general name given to certain specific techniques which can be used for the planning, management and control of projects. One definition of a project: “A project is a temporary endeavour undertaken to create a "unique" product or service” History Developed in 1950’s CPM by DuPont for chemical plants PERT by U.S. Navy for Polaris missile 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 - Critical Path Method Definition: In CPM activities are shown as a network of precedence relationships using activity-on-node network construction – Single estimate of activity time – Deterministic...
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...Table of Contents 1.0 INTRODUCTION 3 2.0 NETWORK TECHNIQUES 7 2.1 Introduction 7 2.2 Critical Path Method (CPM) ……………………………………………………………..…………………………………… 8 2.2.1 Steps of CPM Project Planning ……….……………………………………………………………………………… 9 2.2.2 Example of CPM …………………………………………………………………………………………………………… 11 2.2.3 Benefits of CPM …………………………………………………………………………………………………………… 12 2.2.4 Limitation of CPM …………….…………………………………………………………………………………………. 12 2.3 Project Evaluation and Review Techniques (PERT) ……..……………..………………………………………… 13 2.3.1 Steps of PERT in Project Planning ……....……………………………………………………………………….. 14 2.3.2 Benefits of PERT……..……………………………………………………………………………………………………. 16 2.5.1 Limitation of PERT ……………………………………………………………………………………………………….. 16 3.0 CONCLUSION 17 4.0 REFERANCES 29 1.0 INTRODUCTION: 1.1 What is a project? A project is a series of activities directed to accomplishment of a desired objective. A project have a defined start which is when the descision of the project process starts and also a defined end where by that point the goal and the objectives of that project is achived. 1.2 What is project management? Project management its concerned with the overall planning and co-ordination of a project from conception to completion aimed at meeting the stated requirements and ensuring completion on time, within cost and to required quality standards. Project management is normally reserved for focused, non-repetitive, time-limited...
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...PROJECT CONTROL WITH PERT/CPM CPM (Critical Path Method) determines the longest path and the critical activities along this path in a project network; the project completion time can't be shorter than the duration of this longest path unless such techniques as time crashing are used. PERT (Program Evaluation and Review Technique) incorporates probabilistic elements into the computation of activity durations and hence the project completion time; PERT uses optimistic (o), most probable (m), and pessimistic (p) activity times to estimate the expected activity times. Expected time is given by (o + 4m + p) / 6 and variance is given by ((p - o)/6)2 . The reason for dividing by 6 is due to the fact that the area under the normal curve between -3 and 3 accounts for more than 99% of the total probability of 100%. In case of standard normal curve, = 1; hence -3 = -3(1) = -3 and 3() = 3(1) = 3 and the difference between 3 and -3 is 6. An example will illustrate the PERT/CPM technique. Example: The optimistic, most probable, and pessimistic times (in days) for completion of activities for a certain project are as follows: ACTIVITY | IMMEDIATE PREDECESSOR | OPTIMISTIC TIME (o) | MOST PROBABLE TIME (m) | PESSIMISTIC TIME (p) | A | - | 4 | 5 | 6 | B | - | 6 | 8 | 10 | C | A | 6 | 6 | 6 | D | B | 3 | 4 | 5 | E | B | 2 | 3 | 4 | F | C,D | 8 | 10 | 12 | G | E | 6 | 7 | 8 | H | C,D | 12 | 13 | 20 | I | F,G | 10 | 12 | 14 | ...
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...project extends beyond week 43. Activity Description Optimistic Pessimistic Most-likely Predecessors A Survey Site 2 4 3 None B Excavation 9 15 12 A C Prepare Drawings 4 18 9 None D Soil Study 1 1 1 B E Prelim. Report 1 3 2 C, D F Approve Plans 1 1 1 E G Concrete Forms 5 9 6 F H Procure Steel 2 10 5 F I Order Cement 1 1 1 F J Deliver Gravel 2 5 3 G K Pour Concrete 8 14 10 H, I, J L Cure Concrete 2 2 2 K M Strength Test 2 2 2 L Create a PERT model of this project and use it to answer these questions: 1. What is the expected completion time of this project? 2. What completion time should Sharon use, if she wants to be 90% confident? 3. What is the probability of completion by week 43? 4. Give an estimated probability distribution for the amount of penalties Sharon will have to pay. 5. What is the expected value of the penalty? 6. Which activities are most likely to be on the critical path? 7. Compare the PERT results to those you would have found using (a) basic CPM using the most-likely times, (b) the “by-hand” PERT method from the textbook, and (c)...
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...Week 5 Tutorial Exercise Business Performance Management Task 1 Answer to Discussion Question: * 1. How does a KPI differ from an operational metric? 2. What are some of the drawbacks of relying solely on financial metrics for measuring performance? 3. How does a BSC align strategies and actions? 4. What does Six Sigma refer to? 5. What are some of the ways that the success of Six Sigma implementations is improved? 6. SAP uses the term strategic enterprise management (SEM), Cognos uses the term corporate performance management (CPM), and Hyperion uses the term business performance management (BPM). Are they referring to the same basic ideas? Provide evidence to support your answer 7. BPM encompasses five basic processes: strategize, plan, monitor, act and adjust. Select one of these processes and discuss the types of software tools and applications that are available to support it. 8. Select a public company of interest. Using the company’s 2008 annual report, create five strategic financial objectives for 2009. For each objective, specify a strategic goal or target. The goals should be consistent with the company’s 2008 financial performance. Task 2 Case Study : Application Case CPR 1. What are the major components of the CPR dashboard? 2. How many agencies were involved in the definition and implementation of the CPR dashboard? 3. What were the major steps used in defining and implementing the CPR? 4. What role did...
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...Week 5 Tutorial Exercise Business Performance Management Task 1 Answer to Discussion Question: * 1. How does a KPI differ from an operational metric? 2. What are some of the drawbacks of relying solely on financial metrics for measuring performance? 3. How does a BSC align strategies and actions? 4. What does Six Sigma refer to? 5. What are some of the ways that the success of Six Sigma implementations is improved? 6. SAP uses the term strategic enterprise management (SEM), Cognos uses the term corporate performance management (CPM), and Hyperion uses the term business performance management (BPM). Are they referring to the same basic ideas? Provide evidence to support your answer 7. BPM encompasses five basic processes: strategize, plan, monitor, act and adjust. Select one of these processes and discuss the types of software tools and applications that are available to support it. 8. Select a public company of interest. Using the company’s 2008 annual report, create five strategic financial objectives for 2009. For each objective, specify a strategic goal or target. The goals should be consistent with the company’s 2008 financial performance. Task 2 Case Study : Application Case CPR 1. What are the major components of the CPR dashboard? 2. How many agencies were involved in the definition and implementation of the CPR dashboard? 3. What were the major steps used in defining and implementing the CPR? 4. What role did...
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...and ‘T’ be the time period for which funds are invested then interest earned will be … d. P*I*T 3. Following the above given conditions, compound interest is given by … b. P*(1+I)T 4. Firms resorting to “Proactive Growth” a. do constant strategic planning 5. SPACE stands for Strategic Position and Action Evaluation 6. Increasing market expenditure heading to an increased market share is known as … c. market expansion 7. If profit after tax is ‘A’, depreciation be ‘B’ and interest be ‘I’, then Interest cover ratio is given by 8. E-V rule is also called … 9. In case of internally generated funds the opportunity cost to the firm is … b. the lending rate 10. ‘PERT’ stands for Program Evaluation and Review Technique. Part Two: 1. Write a note on ‘Sinking Fund Payment’. Answer: A sinking fund is a means of repaying funds that were borrowed through a bond issue. The issuer makes periodic payments to a trustee who retires part of the issue by purchasing the bonds in the open market. Rather than the issuer repaying the entire principal of a bond issue on the maturity date, another company buys back a portion of the issue annually and usually at a fixed par value or at the current market value of the bonds, whichever is less. Should interest rates decline following a bond issue, sinking-fund provisions allow a firm to lessen the interest rate risk of its bonds as it essentially replaces a portion...
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...Wendy Lee, manager of college services at Mountain View Colleges wants a new information system that will improve efficiency and costume service at the three college bookstores. Description of the Process Project planning, Gantt Charts, PERT/CPM Charts, Microsoft Project and Open Workbench software, project monitoring, and risk management techniques. Important terms and Concepts What Does Project Manager Do? Whether a project involves a new office building or an information system, good leadership is essential. In systems project, the project manager, or project leader, usually is a senior systems analyst or an IT department manager if the project is large. What is a Gantt chart? A Gantt chart was design that could show planned and actual progress on a project. A Gantt Chart is horizontal bar chart that represents a set of tasks. What is a PERT/CPM Chart? The Program Evaluation Review Technique (PERT) is a bottom-up technique, because it analyzes a large, complex project as a series of individual tasks. At approximately the same time, the CPM (Critical Path Method) meet similar project management needs. The distinction between the two methods has disappeared over time, and today the technique is called either PERT, CPM, or PERT/CPM. Maintaining a Schedule A project schedule can be challenging, and most projects run into at least some problems or delays. By monitoring and controlling the work, the project manager tries to anticipate problems, avoid them or minimize...
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...CHAPTER 1: OPERATIONS AND PRODUCTIVITY TRUE/FALSE 1. Some of the operations-related activities of Hard Rock Café include designing meals and analyzing them for ingredient cost and labor requirements. True (Global company profile, easy) 2. The production process at Hard Rock Café is limited to meal preparation and serving customers. False (Global company profile, easy) 3. All organizations, including service firms such as banks and hospitals, have a production function. True (What is operations management? moderate) 4. Operations management is the set of activities that create value in the form of goods and services by transforming inputs into outputs. True (What is operations management? easy) 5. An example of a "hidden" production function is money transfers at banks. True (What is operations management? moderate) 6. One reason to study operations management is to learn how people organize themselves for productive enterprise. True (Why study OM, easy) 7. The operations manager performs the management activities of planning, organizing, staffing, leading, and controlling of the OM function. True (What operations managers do, easy) 8. "How much inventory of this item should we have?" is within the critical decision area of managing quality. False (What operations managers do, easy) 9. In order to have a career in operations management, one must have a degree in statistics or quantitative methods. False (What operations...
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...Evaluation and Review Technique This is simply the project managing method which in turn gives the time used by each factor of a project, and the amount of time needed for it to be finished. PERT tends to divide the project keen on activities and events that should be done. It comes up with a sequence which revolves around associations, and period in a structure of network. Basically the lines that are used in the link of the events are called paths, and also there is the longest path of connection that is linked with all the events which is known as the critical path. When looking at the span of the critical path, it is also the particular time a project will take in that order. If by any chance there is a delay of any kind, it will also delay the entire project. In conclusion PERT is a scheduling tool and it is not used in the lookout of the best or shortest methods of completion of any given project. (Baca, 2008). Critical Path Method This is a gradually method used in process planning. It gives account of the critical and also the non- critical duties basing on the aim of avoiding time casing troubles and method bottlenecks. The CPM is mainly placed to projects that are attached to various activities which are widely related. Some of the steps that can be used in the application of the CPM include the definition of the task at hand and writing them in a list, making of a chart that shows the relation of one task to another, Picking out the non-critical and critical paths between...
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...DIFFERENCES BETWEEN (PERT) AND (CPM) Critical Path Analysis and PERT are powerful tools that help you to schedule and manage complex projects. They were developed in the 1950s to control large defense projects, and have been used routinely since then. Program (Project) Evaluation and Review Technique (PERT) is a project management tool used to schedule, organize, and coordinate tasks within a project. It is basically a method to analyze the tasks involved in completing a given project, especially the time needed to complete each task, and to identify the minimum time needed to complete the total project. The Critical Path Method or Critical Path Analysis, is a mathematically based algorithm for scheduling a set of project activities.Critical path method seeks to determine the longest possible continuous pathway taken from the initial event to the terminal event. It determines the total calendar time required for the project; and, therefore, any time delays along the critical path will delay the reaching of the terminal event by at least the same amount. PERT Networks and CPM Arrow Diagramsare similar in manyways and yet take paths that are often-different:Both aresystematic ways of analyzing and planningthe components ofa program or project.Both have been used extensively byindustry and government. CPM uses activity oriented network while PERT uses event oriented network. Furthermore durations of an activity may be estimated with a fair degree of accuracy in CPM while the estimate...
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...Agriculture (Case Study: Grape Garden Stabilization) S.M. Fahimifard and A.A. Kehkha Department of Agricultural Economics Engineering, University of Zabol, Zabol, Iran Abstract: Some activities of project are critical in the sense that delay in their commencement will delay the overall project completion time. Therefore, management and scheduling of projects is inevitable. In this paper, project scheduling in agriculture, for establishing 300 hectares grape garden in Agricultural Research Center of University of Zabol, is carried out by CPM (Critical Path Method) and PERT (Program Evaluation Review Technique) methods. Results show that the minimum completion time of this project, based on using Normal time and PERT method is 390 days and 364.67 days, respectively. Also the results obtained from employing CPM method indicate that the cost of reducing the project completion time to 365 days is 23643530 Rials. Key words: Project scheduling % CPM % PERT % Agriculture INTRODUCTION Project scheduling and control refers to the planning, scheduling and control of projects, which consist of numerous activities. In the other words, Scheduling issue is a frequent task in the control of various systems such as manufacturing processes [1], project management [2] and service system control (reservation systems, timetabling). Examples can be found in diverse areas such as shipbuilding, road construction, oil refinery maintenance, missile launching and auditing. The management of such projects is...
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...ANALYSIS (PERT & CPM) It is a technique through which large projects are broken down to individual jobs or events and arranged in a logical network. PERT and CPM are two such network-based techniques designed to assist in the planning, scheduling, and control of projects. A project is defined as a collection of interrelated activities with each activity consuming time and resources. PERT: Program Evaluation and Review Technique CPM : Critical Path Method. Framework of PERT and CPM There are six steps common to both PERT and CPM. 1. Define the project and all of its significant activities or task. 2. Develop the relationships among the activities. Decide which activities must precede and follow others. 3. Draw network connecting all of the activities. 4. Assign time and/or cost estimates to each activity. 5. Compute the longest time path through the network; this is called critical path. 6. Use the network to help plan, schedule, monitor, and control the project. ** Finding the critical path is a major part of controlling a project. The activities on the critical path represent task that will delay the entire project if they are delayed. Managers derive flexibility by identifying non critical activities and re-planning, rescheduling, and reallocating resources such as personnel finances. ** Although PERT and CPM are similar in their basic approach, they do differ in the way activity times are estimated. For every PERT activity...
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...THE IMPORTANCE OF PROJECT MANAGEMENT Globalization has changed the way business organizations work. Modern organizations face bigger and harder challenges as competitions and technology grow. Growing project complexity and collapsing product/service life cycle has made businesses have to adapt to sustain their profitability and competitiveness. Hard Rock Cafe and Bechtel Group are two examples of firms that manage to adapt to these changes using their strength in managing projects. Bechtel uses their outstanding project management skills to build massive constructions all over the world. Hard Rock Cafe won’t be able to run their day-to-day business and sponsor the annually-held Rockfest if they don’t have a good project management team. Scheduling projects is a difficult challenge for operation managers. Cost overruns and unnecessary delays may occur due to poor schedulling and controls. Good project management is a substantial key to guarantee projects comes within budget and meet the required time and quality. Businesses usually form project organizations outside the normal production system to run projects that takes month or year to finish. Project organizations within a firm is usually set up to handle specific jobs and often disbanded when the project is complete. The management of project involves three phases: planning, scheduling, and controlling. PROJECT PLANNING Planning projects is the first phase of project management. This phase includes setting goals...
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...with PERT/CPM One of the most challenging jobs that any manager can take on is the management of a large-scale project that requires coordinating numerous activities throughout the organization. A myriad of details must be considered in planning how to coordinate all these activities, in developing a realistic schedule, and then in monitoring the progress of the project. Fortunately, two closely related operations research techniques, PERT (program evaluation and review technique) and CPM (critical path method), are available to assist the project manager in carrying out these responsibilities. These techniques make heavy use of networks (as introduced in the preceding chapter) to help plan and display the coordination of all the activities. They also normally use a software package to deal with all the data needed to develop schedule information and then to monitor the progress of the project. Project management software, such as MS Project in your OR Courseware, now is widely available for these purposes. PERT and CPM have been used for a variety of projects, including the following types. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Construction of a new plant Research and development of a new product NASA space exploration projects Movie productions Building a ship Government-sponsored projects for developing a new weapons system Relocation of a major facility Maintenance of a nuclear reactor Installation of a management information system Conducting an advertising campaign PERT and...
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