Project Evaluation Review Technique (PERT) and Critical Path Method (CPM)


Project Evaluation Review Technique (PERT) and Critical Path Method (CPM)

Pert evaluation review technique (PERT) and critical path method (CPM) are two management techniques which are used to plan, schedule, budget and control different activities normally associated with a project. These techniques were developed in 1950s. PERT was developed by US Navy for the planning and control of Polaris missile programme while CPM was developed by DuPont and the emphasis was on the trade-off between the cost of the project and its overall completion time. PERT was originally designed to examine projects from the stand points of uncertainty while the CPM was designed to examine projects from the standpoint of costs. These techniques have been combined over time. Both the techniques rely heavily on the use of networks to help plan and display the coordination of all the activities of a project.

In PERT activities are shown as a network of precedence relationships using activity on arrow network construction and using probabilistic activity time estimates. In CPM, activities are shown as network of precedence relationships using activity on node network construction and using time estimates which can be predicted with considerable certainty due to the existence of past experience. Comparison of PERT and CPM is given in Table 1.

Tab 1 Comparison of PERT and CPM

PERT

CPM

1. PERT uses event oriented network 1. CPM uses activity oriented network
2. Estimates of time for activities are  not so accurate and definite 2.Duration of activity can be estimated with a fair degree of accuracy
3. It is used mostly in projects of non repititive nature 3.It is used extensively in construction projects
4. Probabilistic model concept is used 4. Deterministic concept is used.
5. PERT is basically a tool for planning 5. CPM can control both time and cost when planning.
6. In PERT it is assumed that cost varies directly with time. Attention is given to minimize the time so that minimum cost results. Thus in PERT, time is controlling factor. In CPM, cost optimization is given prime importance. The time for completion of the project depends on the cost optimization. The cost is not directly proportion to the time. Thus, cost is the controlling factor.

 

Over time, CPM and PERT merged into one technique referred to as ‘PERT/CPM’. In merged technique it is visually easier to see precedence relationships. It consists of a network of branches and nodes and is ideal for large projects with many activities. In fact a project network is a network diagram that uses nodes and arcs to represent the progression of the activities of the project from start to finish. Three pieces of information are needed for the network namely (i) activity information (ii) precedence relationship and (iii) time information. A typical PERT/CPM chart is shown in Fig 1

PERT CPM chart

Fig 1 Typical PERT/CPM chart

Two types of project networks are normally used. These are given below.

  • Activity on Arc (AOA) – On this diagram an activity is represented on an arc, while a node is used to separate an activity from its immediate predecessors.
  • Activity on Node (AON) – On this diagram, the activity is represented by the node, while the arc is used to show the precedence relationship between the activities.

PERT/CPM answers the following questions.

  • How can the project be displayed graphically?
  • How much time is needed to finish the project if no delays occur?
  • When is earliest start and finish times of each activity if no delays occur?
  • What activities are critical bottleneck activities where delays must be avoided to finish the project on time?
  • For non bottleneck activities, how much can an activity be delayed and yet still the project on time?
  • What is the probability of completing the project by the deadline?

Terminology in a PERT/CPM network

The following terminology is used for a PERT/CPM network.

  • Activity – It is a distinct task that needs to be performed as part of the project.
  • Arrow – It shows the direction of the activity.
  • Node – It is represented by a circle and indicates an event, a point in time where one or more activities start and/or finish. Start node is that node that represents the beginning of the project while the finish node indicates the end of the project.
  • Immediate predecessors – These are the activities that must be completed by no later than the start time of the given activity.
  • Immediate successor – Given the immediate predecessor of an activity, this activity becomes the immediate successor of each of these immediate predecessors. If an immediate successor has a multiple of immediate predecessors, then all must be finished before an activity can begin.
  • Path – A path through a project network is a route that follows a set of arcs from the start node to the finish node. The length of the path is defined as the sum of the durations of the activities of the path.
  • Slack time – It is the differences between the latest time and the earliest time an activity. It is the amount of time by which an activity can be delayed without delaying the completion of the project.
  • Critical path – This is the path that has the longest length through the project. It is the shortest time that a project can conceivably be finished. If the slack is zero for an activity then it is on critical path. Similarly if slack is positive then the activity is not on the critical path.
  • Dummy – It is inserted into the network to show a precedence relationship, but it does not represent any actual passage of time.
  • Earliest start of an activity- It is the calendar time when an event can occur when all the predecessor events completed at the earliest possible times. Earliest start time for an activity is equal to the largest of the earliest finish times of its immediate predecessors.
  • Earliest finish time of an activity – It is the time at which an activity will finish if there is no delays in the project.
  • Latest start time of an activity – It is the latest time that the activity can start without delaying the subsequent events and completion of the project.
  • Latest finish time of an activity – – It is the latest time that the activity can be completed without delaying the subsequent events and completion of the project. Latest finish time of an activity is equal to the smallest of the latest start times of its immediate successors.
  • Forward pass – It is the process of moving through the project from start to finish time determining the earliest start and finish times for the activities of the project.
  • Backward pass – It is the process of moving through a project from finish to start to determine the latest start and finish times for the activities of the project.
  • Crashing – Crashing an activity refers to taking on extra expenditures in order to reduce the duration of an activity below its expected duration. Crash point shows the time and cost when the activity is fully crashed.
  • Normal point – It is the time and cost of an activity when it is performed in a normal way.