The owner of the Western Hills Shopping Center plans

PERT / CPM to modernize and expand the current 32-business

shopping center complex. The project is expected to
Unit 8.2 provide room for 8 to 10 new businesses. Financing has
been arranged through private investor. All that remains
is for the owner of the shopping center to plan, schedule,
PERT / CPM
and complete the expansion project.
PERT – Program Evaluation and Review Technique
The first step in the PERT/CPM scheduling process is
 Developed by U.S. Navy for Polaris missile project to develop a list of the activities that make up the project.
 Developed to handle uncertain activity times

CPM – Critical Path Method

 Developed by DuPont & Remington Rand

 Developed for industrial projects for which activity
times generally were known

PERT and CPM have been used to plan, schedule, and

control a wide variety of projects:

- R&D of new products and processes

- Construction of buildings and highways The immediate predecessor column identifies the
- Maintenance of large and complex equipment activities that must be completed immediately prior to the
- Design and installation of new systems start of the activity.

Using the activity information, we can construct a

PERT / CPM is used to plan the scheduling of individual
graphical representation of the project, or the project
activities that make up a project.
network.
Projects may have as many as several thousand
A path is a sequence of connected nodes that leads
activities.
from the Start node to the Finish node. For instance, one
A complicating factor in carrying out the activities is path for the network is defined by the sequence of nodes
that some activities depend on the completion of other A-E-F-G-I.
activities before they can be started.

Project managers rely on PERT/CPM to help them

answer questions such as:

- What is the total time to complete the project?

- What are the scheduled start and finish dates
for each specific activity?
- Which activities are critical and must be
completed exactly as scheduled to keep the
project on schedule?
- How long can noncritical activities be delayed
before they cause an increase in the project
completion time? To facilitate the PERT/CPM computations, we modified
the project network. The upper left-hand corner of
Project Scheduling Based on Expected Activity
each node contains the corresponding activity letter. The
Times
activity time appears immediately below the letter.
A project network can be constructed to model the
precedence of the activities.

The nodes of the network represent the activities.

The arcs of the network reflect the precedence

relationships of the activities.

A critical path for the network is a path consisting of

activities with zero slack.
All paths in the network must be traversed in order to Let us apply the earliest start time rule to the portion of
complete the project, so we will look for the path that the network involving nodes A, B, and C. With an earliest
requires the greatest time. Because all other paths are start time of 0 and an activity time of 6 for activity B, we
shorter in duration, this longest path determines the total show ES = 0 and EF = 6 in the node for activity B. Activity
time required to complete the project. If activities on the A is the only immediate Predecessor for activity C. EF
longest path are delayed, the entire project will be for activity A is 5, so ES for activity C must be 5. Thus,
delayed. Thus, the longest path is the critical path. with An activity time of 4, the earliest finish time for
Activities on the critical path are referred to as the activity C is EF = 9.
critical activities for the project.

We begin by finding the earliest start time and the latest With activities B and C as immediate predecessors, the
start time for all activities in the network. Let earliest start time for activity H must be equal to the
largest of the earliest finish times for activities B and C.
ES = earliest start time for an activity Thus, with EF = 6 for activity B and EF = 9 for activity C,
9 is the earliest start time for activity H (ES = 9). With an
EF = earliest finish time for an activity activity time of 12 as shown in the node for activity H, the
t = expected activity time earliest finish time is EF = 21.

The earliest finish time for any activity is

EF=ES+t
Activity A can start as soon as the project starts, so we
set the earliest start time for activity A equal to 0. With
an expected activity time of 5 weeks, the earliest finish
time for Activity A is EF=ES+t=0+5=5.

We will write the earliest start and earliest finish times in

the node to the right of the activity letter. Using activity A
as an example, we have
Continuing with this forward pass through the network,
we can establish the earliest start time and the earliest
finish time for each activity in the network. Therefore, we
know that the expected completion time for the entire
project is 26 weeks.

Because an activity cannot be started until all

immediately preceding activities have been finished, the
following rule can be used to determine the earliest start
time for each activity:

The earliest start time for an activity is equal to the

largest (i.e., latest) of the earliest finish times for all its
immediate predecessors.
We now continue finding the critical path by making The amount of slack for an activity is computed as
backward pass through the network. Because the follows:
expected completion time for the entire project is 26
weeks, we begin the backward pass with a latest finish Slack=LS – ES=LF – EF
time of 26 for activity I.
The slack associated with activity C is
Once the latest finish time for an activity is known, the LS – ES=8 – 5=3 weeks. Hence, activity C can be
latest start time for an activity can be computed as delayed up to 3 weeks, and the entire project can still be
follows. completed in 26 weeks. In this sense, activity C is not
critical to the completion for the entire project in 26
Let weeks.
LS = latest start time for an activity
LF = latest finish time for an activity

Then
LS=LF – t
Beginning the backward pass with activity I, we know
that the latest finish time is LF = 26 and that the activity
time is t = 2. Thus, the latest start time for activity I is LS
= 24. We will write the LS and LF values in the node
directly below the earliest start (ES) and earliest finish
(EF) times. Thus, for node I, we have

Putting this information in tabular form provides the

activity schedule shown

The following rule can be used to determine the latest

finish time for each activity in the network:

The latest finish time for an activity is the smallest

(earliest) of the latest start times for all activities that
immediately follow the activity.
We previously stated that projected managers look for
procedures that will help answer important questions
regarding the planning, scheduling, and controlling of
projects.

1. How long will the project take to compute?

 The project can be completed in 26 weeks if
each activity is completed on schedule.
2. What are the scheduled start and completion times
for each activity?
 The activity schedule shows the earliest start,
latest start, earliest finish, and latest finish times
for each activity.
3. Which activities are critical and must be completed
After we complete the forward and backward passes, we exactly as scheduled to keep the project on
can determine the amount of slack associated with each schedule?
activity.  A, E, F, G, and I are the critical activities
Slack is the length of time activity can be delayed 4. How long can noncritical activities be delayed before
without increasing the project completion time. they caused an increase in the completion time for
the project?
  The activity schedule shows the slack a = the optimistic completion time estimate
associated with each activity.
b = the pessimistic completion time estimate
Summary of the PERT/CPM Critical Path Procedure

Step 1. Develop a list of the activities that make up the

In the three-time estimate approach, the critical path is
project
determined as if the mean times for the activities were
Step 2. Estimate the completion time for each activity fixed times.

Step 3. Estimate the completion time for each activity. The overall project completion time is assumed to
have a normal distribution with mean equal to the sum of
Step 4. Draw a project network depicting the activities the means along the critical path and variance equal to
and immediate predecessors listed in steps 1 and 2. the sum of the variances along the critical path.
Critical Path Procedure Crashing Activity Times
Step 5. Use the project network and the activity time To determine just where and how much to crash activity
estimates to determine the earliest start and the earliest times, we need information on how much each activity
finish time for each activity by making a forward pass can be crashed and how much the crashing process
through the network. The earliest finish time for the last costs. Hence, we must ask for the following information
activity in the project identifies the total time required to
complete the project. - Activity cost under the normal or expected activity
time
Step 6. Use the project completion time identified in - Time to complete the activity under maximum
Step 5 as the latest finish time for the last activity and crashing (i.e., the shortest possible activity time)
make a backward pass through the network to identify
- Activity cost under maximum crashing
the latest start and latest finish time for each activity.
When determining the time estimates for activities in a
Step 7. Use the difference between the latest start time
project, the project manager bases these estimates on
and the earliest start time for each activity to determine
the amount of resources (workers, equipment, etc.) that
the slack for each activity.
will be assigned to an activity
Step 8. Find the activities with zero slack; these are the
The original developers of CPM provided the project
critical activities.
manager with the option of adding resources to selected
Step 9. Use the information from steps 5 and 6 to activities to refuse project completion time.
develop the activity schedule for the project.
Added resources (such as more workers, overtime, and
Project Scheduling Considering Uncertain Activity so on) generally increase project costs, so the decision
Times to reduce activity times must take into consideration the
additional cost involved.
In a three-time estimate approach, the time to
complete an activity is assumes to follow a Beta In effect, the project manager must make a decision that
distribution. involves trading additional project costs for reduced
activity time.
Uncertain Activity Times
Considering Time-Cost Trade-offs
An activity’s mean completion time is:
The table shown defines a two-machine maintenance
a+ 4 m+ b project consisting of five activities. Management has
t=
6 substantial experience with similar projects and the
times for maintenance activities have very little
a = the optimistic completion time estimate variability; hence, a single time estimate is given for
each activity.
b = the pessimistic completion time estimate

m = the most likely completion time estimate

An activity’s completion time variance is:

( )
2
2 b−a
❑=
6
 For example, if we decided to crash activity A by only 1.5
days, the added cost would be 1.5($ 100)=$ 150,
which results in a total activity cost of
$ 500+$ 150=$ 650.
The project network is:

The length of the critical path, and thus the total time
required to complete the project, is 12 days.

The complete normal and crash activity data for the two-
machine maintenance project are given here:

Crashing Activity Times

Which activities should be crashed – and by how much –

to meet the 10-day project completion deadline at
minimum cost?

Your first reaction to this question may be to consider

crashing the critical activities – A, B, or E. Activity A has
For example, if the normal or expected time for activity A the lowest crashing cost per day of the three, and
crashing this activity by 2 days will reduce the A-B-E
is 7 days at a cost of C A=$ 500 and the time under
path to the desired 10 days.
maximum crashing is 4 days at a cost of C A=$ 800 , the
previous equations show that the maximum possible Keep in mind, however, that as you crash the current
critical activities, other paths may become critical.
reduction in time for activity A is M A =7−4=3 with a
crashing cost of Thus, you will need to check the critical path in the
revised network and perhaps either identify additional
activities to crash or modify your initial crashing decision.

For a small network, this trial-and-error approach can be

used to make crashing decisions; in large networks,
however, a mathematical procedure is required to
We make the assumption that any portion or fraction of determine optimal crashing decisions.
the activity crash time can be achieved for a
corresponding portion of the activity crashing cost.