Programme Evaluation and Review Technique (PERT) and Critical Path Method (CPM) (part-1)

Programme Evaluation and Review Technique (PERT) and Critical Path Method (CPM) are two techniques
that are widely used in planning and scheduling the large projects.
A project is a combination of various activities.
For example, Construction of a house can be considered as a project.

A project is a series of activities directed to accomplishment of  a desired objective.

construction of a house includes various activities such as searching for a suitable site, arranging the finance, purchase of materials, digging the foundation, construction of superstructure etc.

In planning and scheduling the activities of large sized projects, the two network techniques — PERT and CPM — are used conveniently to estimate and evaluate the project completion time and control the resources to see that the project is completed within the stipulated time and at minimum possible cost.

Many managers, who use the PERT and CPM techniques, have claimed that these techniques drastically reduce the project completion time.

History

          Developed in 1950’s

         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).

         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.

USED IN  :  Production management - for the jobs of repetitive in nature where the activity time estimates                can be predicted with considerable certainty due to the existence of past experience.

PERT (Programme Evaluation and Review Technique)

Definition: In PERT activities are shown as a network of precedence relationships using activity-on-arrow network construction

USED IN  : Project management - for non-repetitive jobs (research and development work), where the time           and cost estimates tend to be quite uncertain. This  technique uses probabilistic time estimates.

Features of CPM

(a)    Network is constructed on the basis of jobs or activities (activity oriented).

(b)   CPM does not take uncertainties involved in the estimation of times. The time required is deterministic and hence only one time is considered.

(c)    CPM times are related to cost. That is can be by decreasing the activity duration direct costs

          increased (crashing of activity duration is possible)

      Features of PERT

(a)    Network is constructed basing on the events (event oriented)

(b)   PERT network deals with uncertainties and hence three time estimations are considered

        (Optimistic Time, Most Likely Time and Pessimistic Time)

(c)    As there is no certainty of time, activity duration cannot be reduced. Hence cost cannot be expressed correctly. We can say expected cost of completion of activity (crashing of activity duration is not possible)

(d)   PERT activities are probabilistic in nature.

Benefits of CPM/PERT

1.Useful at many stages of project management

2.Mathematically simple

3.Give critical path and slack time

4.Provide project documentation

5.Useful in monitoring costs

6.more efficient

Limitations to CPM/PERT

1.Clearly defined, independent and stable activities

2.Specified precedence relationships

3.Over emphasis on critical paths