Unit 3: Project

Networking Techniques
Critical path method (CPM) and
PERT
What is the critical path method (CPM)?
 The critical path method (CPM) is a technique where you identify tasks that
are necessary for project completion and determine scheduling flexibilities.
 A critical path in project management is the longest sequence of activities
that must be finished on time in order for the entire project to be complete.
Any delays in critical tasks will delay the rest of the project.
 CPM revolves around discovering the most important tasks in the project
timeline, identifying task dependencies, and calculating task durations.
 CPM was developed in the late 1950s as a method to resolve the issue of
increased costs due to inefficient scheduling. Since then, CPM has become
popular for planning projects and prioritizing tasks. It helps you break down
complex projects into individual tasks and gain a better understanding of the
project’s flexibility.
 Why use the critical path method?
 CPM can provide valuable insight on how to plan projects, allocate resources,
and schedule tasks.
 Here are some reasons why you should use this method:
• Improves future planning: CPM can be used to compare expectations with
actual progress. The data used from current projects can inform future project
plans.
• Facilitates more effective resource management: CPM helps project managers
prioritize tasks, giving them a better idea of how and where to deploy
resources.
• Helps avoid bottlenecks: Bottlenecks in projects can result in lost valuable time.
Plotting out project dependencies using a network diagram, will give you a
better idea of which activities can and can’t run in parallel, allowing you to
schedule accordingly.
How to find the critical path
1) List activities: Use a work breakdown structure to list all the project activities or
tasks required to produce the deliverables. The list of activities in the work
breakdown structure serves as the foundation for the rest of the CPM.
 These are classified into four categories
1. Predecessor activity – Activities that must be completed immediately prior to the
start of another activity are called predecessor activities.
2. Successor activity – Activities that cannot be started until one or more of other
activities are completed but immediately succeed them are called successor
activities.
3. Concurrent activity – Activities which can be accomplished concurrently are
known as concurrent activities. It may be noted that an activity can be a
predecessor or a successor to an event or it may be concurrent with one or more of
other activities.
4. Dummy activity – An activity which does not consume any kind of resource
but merely depicts the technological dependence is called a dummy activity.
The dummy activity is inserted in the network to clarify the activity pattern in
the following two situations
❑ To make activities with common starting and finishing points distinguishable
❑ To identify and maintain the proper precedence relationship between activities
that is not connected by events.
❑ For example, consider a situation where A and B are concurrent activities. C is
dependent on A and D is dependent on A and B both. Such a situation can be
handled by using a dummy activity as shown in the figure.
 For example, let’s say the marketing team is producing a new interactive blog
post. Here are some tasks that might be in the work breakdown structure:
2) Identify dependencies
 Based on your work breakdown structure, determine the tasks that are
dependent on one another. This will also help you identify any work that can
be done in parallel with other tasks.
 Here are the task dependencies based on the example above:
• Task B is dependent on A
• Task C is dependent on B
• Tasks C and D can run in parallel
• Task E is dependent on D
• Task F is dependent on C, D, and E
 The list of dependent tasks is referred to as an activity sequence, which will be
used to determine the critical path.
3) Create a network diagram
 The next step is to turn the work breakdown structure into a network diagram,
which is a flowchart displaying the chronology of activities. Create a box for
each task and use arrows to depict task dependencies.
 You’ll add other time-bound components to the network diagram until you
have the general project schedule figured out.
4) Estimate task duration
 To calculate the critical path, the longest sequence of critical tasks, you first
need to estimate the duration of each activity.
 To estimate the duration, try:
• Making educated guesses based on experience and knowledge
• Estimating based on previous project data
• Estimating based on industry standards
 Alternatively, try using the forward pass and backward pass technique:
• Forward pass: This is used to calculate early start (ES) and early finish
(EF) dates by using a previously specified start date. ES is the highest
EF value from immediate predecessors, whereas EF is ES + duration.
The calculation starts with 0 at the ES of the first activity and proceeds
through the schedule. Determining ES and EF dates allows for early
allocation of resources to the project.
• Backward pass: This is used to calculate late start (LS) and late finish
(LF) dates. LS is LF - duration, whereas LF is the lowest LS value from
immediate successors. The calculation starts with the last scheduled
activity and proceeds backward through the entire schedule.
 The early and late start and end dates can then be used to calculate
float, or scheduling flexibility of each task.
5) Calculate the critical path
 Calculating the critical path can be done manually, but you can save
time by using a critical path algorithm instead.
 Here are the steps to calculate the critical path manually:
Step 1: Write down the start and end time next to each activity.
• The first activity has a start time of 0, and the end time is the duration
of the activity.
• The next activity’s start time is the end time of the previous activity,
and the end time is the start time plus the duration.
• Do this for all the activities.
Step 2: Look at the end time of the last activity in the sequence to
determine the duration of the entire sequence.
Step 3: The sequence of activities with the longest duration is the critical
path.
6) Calculate the float
 Float, or slack, refers to the amount of flexibility of a given task. It
indicates how much the task can be delayed without impacting
subsequent tasks or the project end date.
 Finding the float is useful in gauging how much flexibility the project
has. Float is a resource that should be used to cover project risks or
unexpected issues that come up.
 Critical tasks have zero float, which means their dates are set. Tasks
with positive float numbers belong in the non-critical path, meaning
they may be delayed without affecting the project completion date. If
you’re short on time or resources, non-critical tasks may be skipped.
 Total float vs. free float
 Here’s a breakdown of the two types of float:
• Total float: This is the amount of time that an activity can be delayed
from the early start date without delaying the project finish date or
violating a schedule constraint. Total float = LS - ES or LF - EF
• Free float: This refers to how long an activity can be delayed without
impacting the following activity. There can only be free float when two
or more activities share a common successor. On a network diagram,
this is where activities converge. Free float = ES (next task) - EF (current
task)
https://www.pmcalculators.com/how-to-calculate-the-
critical-path/
PERT
 PERT, Program Evaluation and Review Technique, is a project
management tool initially developed in the late 1950s by the U.S. Navy's
Special Projects Office in collaboration with the Lockheed Corporation
and Booz Allen Hamilton. PERT was originally designed for the planning
and scheduling of large-scale projects, particularly those with uncertain or
variable task durations.
 The main purpose of PERT is to analyze and represent the tasks involved
in completing a project, particularly those that are complex and involve
uncertainty in duration. It helps project managers to:
1. Identify Tasks: Break down the project into individual tasks or activities.
2. Estimate Time: Estimate the time required to complete each task,
considering optimistic, most likely, and pessimistic scenarios.
3. Sequence Tasks: Determine the order in which tasks need to be completed
and identify dependencies between tasks.
4. Calculate Project Duration: Calculate the expected duration of the
project based on the estimated durations of individual tasks.
5. Identify Critical Path: Determine the critical path, which is the
sequence of tasks that must be completed on time in order for the
project to finish on schedule. Tasks on the critical path have no slack
or float time.
6. Manage Resources: Allocate resources effectively based on the
project schedule and critical path analysis.
 PERT uses a network diagram to visualize the tasks, their dependencies,
and the critical path. It incorporates probabilistic time estimates,
allowing for uncertainty and variability in task durations. This makes it
particularly useful for projects with high levels of uncertainty or those
involving research, development, and innovation.
 Expected Time:
 The expected time for each task in PERT is calculated using a weighted
average of three time estimates:
❑ Optimistic time (O): the minimum reasonable period of time in which the
activity can be completed
❑ Most likely time (M): the best guess of the time required
❑ Pessimistic time (P): the maximum reasonable period of time the activity
would take to be completed.
 The formula for calculating the expected time (E) is:
 Variance:
 Variance in PERT represents the degree of uncertainty or variability in task durations.
It measures the spread or dispersion of the time estimates around the expected time.
The formula for calculating the variance (V) is:

 This formula quantifies the uncertainty by calculating the squared difference between
the pessimistic (P) and optimistic (O) time estimates, divided by a constant (36). A
higher variance indicates greater variability in the task duration estimates, reflecting
higher uncertainty.
 Importance of Variance:
 Variance provides valuable information to project managers for assessing project
risk. Tasks with higher variance are more uncertain and carry a greater risk of delay.
By identifying tasks with high variance, project managers can prioritize risk
management efforts, allocate resources more effectively, and develop contingency
plans to mitigate potential delays.
Difference between CPM and PERT
1. Focus:
1. CPM: Primarily focuses on determining the critical path of a project,
which is the longest sequence of dependent tasks that determines the
shortest possible duration to complete the project.
2. PERT: Focuses on analyzing the uncertainties and risks associated
with completing a project, especially in terms of time estimation for
each activity.
2. Purpose:
1. CPM: Used for projects where activity times are known with
certainty and the focus is on optimizing the project schedule.
2. PERT: Used for projects where activity times are uncertain or
unknown, and the focus is on managing and minimizing the impact
of uncertainty and risk.
1. Time Estimation:
1. CPM: Relies on deterministic time estimates for each activity.
2. PERT: Uses probabilistic time estimates for each activity, typically represented
as three estimates: optimistic, most likely, and pessimistic.
4. Critical Path Calculation:
1. CPM: Calculates the critical path by identifying the longest path of dependent
activities with zero slack or float.
2. PERT: Also calculates the critical path, but it incorporates probabilistic time
estimates to determine the likelihood of meeting project deadlines.
5. Application:
1. CPM: Widely used in construction, engineering, and manufacturing industries
where activity durations are relatively stable and predictable.
2. PERT: Often used in research and development projects, particularly in
industries where activities are subject to considerable uncertainty or variability.
4. Sensitivity Analysis:
1. CPM: Provides limited sensitivity analysis capabilities, mainly
focusing on the critical path.
2. PERT: Offers robust sensitivity analysis tools to assess the
impact of uncertainties on project completion time and
identify areas where risk mitigation efforts should be focused.
5. Cost Consideration:
1. CPM: Primarily focuses on time optimization; cost
considerations are secondary.
2. PERT: Can incorporate cost estimates alongside time estimates
to evaluate the trade-offs between time, cost, and risk.