American Journal of Operations Research, 2021, 11, 215-226

https://www.scirp.org/journal/ajor
ISSN Online: 2160-8849
ISSN Print: 2160-8830

NEW PERT and CPM in Project Management

with Practical Examples

Karibo Benaiah Bagshaw

Department of Management Rivers State University, Port Harcourt, Nigeria

How to cite this paper: Bagshaw, K.B. (2021) Abstract

NEW PERT and CPM in Project Manage-
ment with Practical Examples. American This paper reviewed the concepts of Project Evaluation Review Technique
Journal of Operations Research, 11, 215-226. and Critical Path Method in project management with practical examples. The
https://doi.org/10.4236/ajor.2021.114013 methods and success of quantitative decision-making approaches in project
Received: December 30, 2020
management through the use of project evaluation review technique and the
Accepted: July 27, 2021 critical path method as regards project duration and critical activities of a
Published: July 30, 2021 project, were discussed. The review found that while both methods are effec-
tive in achieving success in project management, the relationship and con-
Copyright © 2021 by author(s) and
nectivity of activities involved in a project life cycle are key aspects. The paper
Scientific Research Publishing Inc.
This work is licensed under the Creative concludes that the project evaluation review technique is more effective when
Commons Attribution-NonCommercial the duration of the project is uncertain, while the critical path method is ef-
International License (CC BY-NC 4.0). fective when the project’s end time is certain. The paper, therefore, recom-
http://creativecommons.org/licenses/by/4.0/ mends that to achieve maximum operative efficiency in utilizing resources in
Open Access
project management, prior to commencing the execution of a project, all re-
quired resources to cover every activity must be assembled and prioritized to
eliminate interruptions that could bring delay and unnecessary cost implica-
tions. Again, policies focused on improving project execution should be im-
plemented in developing nations to minimize the many cases of failed and
delayed projects. Subsequently, stakeholders in projects must be given the
right, under the law, to prosecute the government, its agencies and/or the ex-
ecutors of projects for failure to execute a project on schedule.

Keywords
Activities, Critical Path Method, Project Evaluation Review Technique,
Project Management

1. Introduction
Managing a project that needs coordination of multiple activities across the or-
ganization is one of the most difficult duties a manager can take on. Numerous

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K. B. Bagshaw

elements must be taken into account when determining how to coordinate all of
these tasks, setting a realistic schedule, and then monitoring the project’s progress.
The focus of project management is the definition of project duration and the crit-
ical tasks associated with the project [1]. The management of large-scale projects
requires coordinating several activities throughout the project. Details must be
put into consideration in planning and coordinating these activities. The devel-
opment of a realistic schedule and the progress of the project must be monitored.
Several details should be considered in planning and coordinating all the sub-
activities and monitoring the ongoing concerns or progress of the project [1].
Projects usually have several activities that may be divided into sub-tasks or
sub-activities and smaller workgroups called work packages. The commence-
ment of an activity depends on the completion of some preceding activity or ac-
tivities. Understanding the element of precedence in a task or activity relation-
ship is a critical skill a project management executive needs when starting a
project. This implies that setting the order of precedence in line with the life
span or completion time for each work or sub-project is a prerequisite task in
project planning [1] [2]. Fortunately, two closely related operations research ap-
proaches, PERT (program evaluation and review technique) and CPM (critical
path method), exist to aid the project manager in fulfilling these obligations.
These strategies make extensive use of networks to assist in planning and dis-
playing the synchronization of all operations.
Traditional project decision-making techniques will not suffice; as such an ap-
proach will stymie project success. It is important to employ operations research
tools in the management of projects. These tools help complement the qualita-
tive meaning of decisions and drive the optimization of project durations in or-
der to minimize the time and the cost of the projects. The Programme Evalua-
tion Review Technique (PERT) and the Critical Path Method (CPM) are widely
used to manage project circles and activities from conception to the close of the
project. The advantage of these quantitative tools is the optimization of project
duration, time minimization and project efficiency [1] [3]. Therefore, the pur-
pose of this paper is to investigate the effect of quantitative operations research
tools such as the Project Evaluation Review Technique (PERT) and the Critical
Path Method (CPM) on the efficient management of projects.

2. The Concept of Project Management

Project management is the planning, organizing, directing and controlling of
resources in each activity of the project in order to optimize the duration of the
project activities, thereby minimizing the total project costs and time. Every
project involves men, materials, money, machines, which are controllable fac-
tors; and the time of project completion is the uncontrollable factor in project
analysis [4]. In implementing or executing projects, resources are committed
which are limited in supply. It is the duty of the project manager to harness these
resources into project sub-activities and manage the project cycles in order to

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 K. B. Bagshaw

achieve the project results effectively and efficiently and in a timely fashion [5].
Project management entails a variety of activities, such as initiating, planning,
implementing, controlling, and closing projects for businesses and individuals. It
guides individuals and organizations by giving disciplines, principles, techniques
and methods to finish or complete things on time and within the confines of
planned budgets [6].
The thrust of project management is effectiveness, time savings, and efficien-
cy. To accomplish this, project managers must hire and deploy a team of highly
productive workers who are committed to achieving the project’s objectives [6].
This team helps management to successfully complete the projects without
committing more funds or investing more time in the project. Therefore, project
management involves proper execution of project circles through management
of skilled people at work [7]. Further, project management helps project teams
to work at a specific time, scope and cost to complete a project within the con-
fines of budgets and specifications [7]. In the present knowledge-based econo-
my, project management activities are factors that add exceptional value to
products and services and to everyday routine workplace activities [8].

3. PERT and CPM in Project Management

Effective project management demands optimization of the duration of the
project to minimize the total project time and cost. The Project Evaluation Re-
view Technique (PERT) and the Critical Path Method (CPM) are always em-
ployed by project managers by breaking large complex projects into sub-activities,
deploying resources and managing the circles of the projects in order to minim-
ize the total cost and time of the project [2] [3]. Hence, PERT and CPM are op-
erational research tools used in driving project effectiveness and efficiency and
these techniques can be applied to several industries or sectors, such as construc-
tion, aviation, the military, and education, including the civil government [9].
In managing projects, managers rely on PERT/CPM to provide answers to the
following project-associated pertinent issues: What is the total time to complete
the project? What are the scheduled start and end dates for each specific sub-
activity? Which sub-activities or activities are critical and must be completed
exactly as scheduled to keep the project as planned? How long can non-critical
sub-activities be delayed before they cause an extension to the finishing time of
the project? If the activity time is unknown, what is the probability that the
project will be executed to completion at any given time? If there is a cost asso-
ciated with “crashing” each activity, what is the additional cost of completing the
project at an earlier time than the normal time [4]?
PERT and CPM assist management in identifying the longest time-consuming,
or consuming path through a network of tasks or activities as a basis for plan-
ning, executing, and controlling a project. The techniques help managers to op-
timize the longest time duration in order to minimize the total project cost and
time. These tools help the project manager by guiding him/her through many
stages of project management. The techniques are mathematically simplified and

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K. B. Bagshaw

give critical path and slack time, provide project documentation and are very
useful in monitoring project costs [7]. However, in comparing both techniques’
advantages to project management, PERT is event-oriented, probabilistic, and
concerned with time only and applies to projects in which the time horizon is
unknown. In contrast, CPM is activity-oriented and is a deterministic model and
is used for projects that are repetitive in nature and are small in size [4] [9].
The PERT and CPM models facilitate the basic functions of planning, sche-
duling, and control. The planning phase separates an entire project into defined
requirements for materials, manpower, and equipment. It is concerned with ar-
ranging well-defined tasks into a time sequence of performance. PERT and CPM
provide management with a clear definition of time cost, an operational network
that relates all activities to a time dimension, resource requirements and a me-
thod for showing critical and non-critical activities [9]. The application of these
network models includes such diverse areas as the development and distribution
of new products, shipbuilding, turnaround maintenance of a plant and where
the timing activities require planning and scheduling of project activities.
In project management, an activity is a task that must be performed by an as-
signed project team. An event is a milestone marking the completion of one or
more activities. Before an activity can begin, all of its predecessor activities must
be completed. Project network models are an abstraction or representation of
activities and milestones of projects by arc/arrows and nodes respectively. The
PERT/CPM diagrams are illustrated below to show how projects are broken
down into various sub-activities, and how the duration of the project is opti-
mized in order to minimize the total time and cost of the project [4].
AOA and AON Conventions
There are two approaches in showing the activity precedence relationship in a
project. These are:
AOA—Activity on Arc (AOA) This uses arrows (or arcs) to represent activi-
ties and nodes (circles) to represent events.

AOA shows the activity duration on the arc.

Event is the point in time that indicates that an activity has been completed
and other activities may begin showing the precedence relationship.
AON—Activity on Node (AON) This uses circles to represent project activi-
ties and arrows to show the required sequence of precedence relationship.

AON networks are slightly easier to construct since they avoid the need for
certain connecting (dummy) activities.

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 K. B. Bagshaw

Below shows a network diagram, the work activities in precedence relation-

ships indicated by arrows linking the circles.

Activity A must be completed before Activity B can begin and after Activity B
is completed, Activity C can begin.

Activity A and B can occur concurrently, but both must be completed before
Activity C can begin.

3.1. Project Evaluation Review Technique

Managers can have information on the time estimates of foremen, suppliers,
subcontractors, and other service providers. This information also enables them
to develop a central measure of completion time for a project and a measure of
dispersion (standard deviation). Given the mean and standard deviation of the
completion time distribution, the probabilities of finishing the project at a given
due date can be estimated.
In PERT, there are three-time estimates for each activity, assuming a beta
probability distribution for the time estimates. The expected time for each activ-
ity can be approximated using the following weighted average. These estimates
are designated as:
a = optimistic time estimate, that is, the minimum reasonable time taken to
perform an activity.
b = pessimistic time estimate, that is, the maximum reasonable time taken to
perform an activity.
m = most likely time estimate, that is, the most likely time accepted to per-
form an activity.
As an estimate of activity completion time, the beta distribution is used, which
is a reasonable approximate expression of activity duration.
The expected time te which approximates the mean, the standard deviation σ
for the beta distribution is given as:
a + 4m + b
Te = (1)
6
Given the mean and standard deviation of the beta distribution, the probabil-
ity of completing a project at a given time may be calculated using the normal
distribution. For example determine the probability that a project would be
completed in a due date D.

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K. B. Bagshaw

Then
D − Te
Z= (2)
σ cp2

where σ cp is the variance of individual activities on the critical path.

2

3.2. Critical Path Model

PERT is a probability time estimate for activities in a project. However, CPM
does not involve probability but actual time estimate of activities in a project.
The time estimate is determined by the estimator, who is expected to be an ex-
perienced individual. The estimator would have had a long record of similar
projects in the past. For each activity, there are four-time estimates:
1) Early start (ES) is the earliest time it takes for an activity to begin. The as-
sumption is that all preceding activities begin at their earliest possible start time;
otherwise, a late start to the preceding activity will result in a late start to its suc-
ceeding activity. The ES of an activity is the sum of the time of all preceding ac-
tivities on that path. When an activity has more than one preceding activity, the
early start of that activity depends on the early finish of the longest duration or
the activity with the longest ES time, t.
2) A late start (LS) is a delay in the start of an activity. The latest time an activ-
ity can begin without delaying the project completion time.
3) Early finish (EF) is an early start of an activity that will lead to an early
finish. The assumption is that the activity begins with ES and ends with t. EF =
ES + t. The precedence relationship shows that the early start of activity depends
upon the early finish of its immediate preceding activity (ies). That is, ES + t =
EF (Forward induction/movement).
4) Late finish (LF)—A late start to an activity will lead to a late finish. The de-
lay in the late start of an activity resulting in the late finish of that activity should
be such as not to delay the project completion time. We assume that for the last
activity in the critical path, EF = LF and then LF − t = LS indicates a reverse
process called Backward induction/movement. The LS of an activity is deter-
mined by the LF of the previous activity (ies). When an activity has more than
one preceding activity, that is, if two or more paths converge on an activity, the
path with the shortest total LS time is taken as the LF of the preceding activity or
activities.

4. Methodology
An integrated review design was used in the study, which reviewed conceptual
and empirical references to project evaluation review techniques and critical path
methods, with a particular emphasis on work examples and analysis. Project
management encompasses the processes necessary to ensure the project is com-
pleted on schedule. The procedures are as follows: plan schedule management,
define activities, sequence activities, estimate activity durations, develop a sche-
dule, and control the schedule [7].

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 K. B. Bagshaw

5. Data Analysis
Deductive analyses based on worked examples are presented.
Worked Example 1
The Early Start (ES) and Early Finish (EF) times, as well as the Late Finish
(LF) and Late Start (LS) times for each activity corresponding to each node
representing an activity, are shown in Figure 1 [10].
Identifying Critical Activities
According to Bagshaw [4], the critical path is the sequence of activities which
add up to the longest duration; it is the shortest time possible to complete the
project; any delay of an activity on the critical path directly impacts the planned
project completion date and there is no float on the critical path.
An examination of the completed diagram in Figure 1 will enable us to de-
termine the critical activities. Note that for some activities, such as activity A, the
early start and late start to the early finish and late finish times are identical. This
means that the activity has no slack and is therefore critical. Any delay in that
activity will cause the whole project to be delayed. Therefore, for those activities
that have 0 total slack, the time difference between the start times and finish
times is zero. These are A, B, D, G, I and K. The critical path is shown either
with a thicker line or with a double line.
Total slack and Free slack
Slack or float is the extent of the period an activity can be deferred without
delaying the start time of succeeding activities; it is described as the maximum
time an activity can be delayed without necessarily delaying the completion of
the project. This kind of slack is often called total slack or total float in order to
distinguish it from several other types of slack.
Total slack for activities not on the critical path is found by subtracting either
early start from late start times or early finish from late finish times. As a result,
Activity C has a 15-day slack and Activity E has a 5-day slack.
Free slack represents the amount of time that an activity can be delayed with-
out delaying the early start of any other activity.

Figure 1. Network diagram showing Early Start (ES) and Early Finish (EF) times as well
as the Late Finish (LF) and Late Start (LS) times for each activity. Source: Decision analy-
sis for managers: A Quantitative Approach, 2017. p.88 by Karibo B. Bagshaw.

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K. B. Bagshaw

Interruptive slack is the difference between free slack and total slack and
represents the potential delay time beyond the free slack time, which if used will
cause at least one activity to start after its early start time but will not cause the
project to be delayed beyond its early finish time.
Total Slack = (Free Slack) + (Interruptive Slack) Consider Activity F, with ES
= 7 and LS = 16; and EF = 16 and LF = 25; the difference between the early finish
and start times, EF − ES = 16 − 7 = 9 days; or the difference between the late
finish and start times, LF − LS = 9 days. Activity C can be delayed 9 days without
changing the early start time for any other activity, or it can be delayed for as
long as 16 days without changing the earliest project completion date (although
if C is delayed more than 9 days, the early start time of some other activities will
be postponed).
Activity E, on the other hand, has a total slack of 5 days, but since activity H,
which follows E, has 5 days of total slack, E has no free slack at all. Interruption
slack would be 5 for activity E.
Managerial Use of Slack
Information about each activity’s slack (total, free and interruptive slack) can
be useful in making operational decisions for a project. If resources are in scarce
supply, management may wish to smoothen the use of resources by delaying the
start of some non-critical activities. Activities on the critical path cannot be
postponed, but they can be terminated. In managing projects, it is advisable that
decisions on the use of free slack be made central. Otherwise, each supervisor
may decide to utilize the amount of interruptive slack that is not really available
separately.
Crashing: Time-Cost Trade offs
Crashing is the reduction in the normal time of an activity in a project and
thereby the project completion. However, it is only the critical activities that can
be crashed. There is a normal estimate of the time required for each activity (and
its associated cost). The crash time estimate is the shortest time that could be
achieved to reduce the normal activity time of a project. The use of more work-
ers, overtime, and more materials would generate higher direct costs for indi-
vidual activities. However, shortening the overall time of the project would also
reduce certain fixed and overhead expenses of supervision, as well as indirect
costs that vary with the length of the project.
Worked Example 2
According to Bagshaw [10] a construction company has provided the follow-
ing information for the construction of a road as in Table 1.
Assuming the project is to be completed in 45 weeks, which activities are ex-
pected to be crashed? What will be the total estimated cost in completing the
project in 45 weeks?
The network diagram indicting the precedence relationship of activities with
their early finish time and late finish time, is presented in Figure 2 [10].
Again, Bagshaw [10] determined the crashed time, crashed time and the aver-
age crashed cost as in Table 2.

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 K. B. Bagshaw

Figure 2. Diagram showing the early event times (EET) and the late event times (LET) of
each activity. Activities A; B; E; F; G; 1; and J are the critical activities and the project will
normally be completed in 52 weeks.

Table 1. Activity, preceding activity, normal time, crashed time, normal cost and crashed
cost of activities.

Preceding Normal time Crash time Normal cost Crash cost

Activity
Activity (weeks) (weeks) N’000 N’000

A - 10 8 30 40

B A 8 6 120 150

C B 10 8 100 160

D A 7 6 40 50

E B, D 11 9 50 75

F C, E 3 3 60 -

G F 6 5 100 140

H C 3 1 30 40

I G, H 9 6 150 270

J I 5 3 180 190

Table 2. Calculated crashed time, crashed cost and average crashed cost, with bold text
indicating critical activities [10].

Normal Crash Crashed Normal Crash Crashed Average

Activity Time Time Time cost cost cost Crashed cost
(weeks) (weeks) (weeks) (N’000) (N’000) (N’000) (N’000)

A 10 8 2 30 40 10 5

B 8 6 2 120 150 30 15

C 10 8 2 100 160 60 30

D 7 6 1 40 50 10 10

E 11 9 2 50 75 25 12.5

F 3 3 - 60 - - -

G 6 5 1 100 140 40 40

H 3 1 2 30 40 10 5

I 9 6 3 150 270 120 40

J 5 3 2 180 190 10 5

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K. B. Bagshaw

Crashing schedule
The crashing decision is to reduce (crash) the normal completion time of the
critical activities in the project as to arrive at 45 weeks of the required time.
From the solution of this problem, the normal time of completing the project is
52 weeks, thus, 7 weeks reduction is needed. The reduction will begin with the
critical activity that has the least (minimum) average crashed cost.
Activity A – N5/week, for 2 weeks = N10.00;
Activity B – N15/week, for 1 week = N15.00;
Activity E – N12.5/week, for 2 weeks = N25.00;
Activity J – N5/week, for 2 weeks = N10.00;
Total crashed weeks = 7 weeks;
Total crashed cost = N60.00;
Total normal cost = N860.00; therefore, the total estimated cost in completing
the project in 45 weeks = N920.00.
Summary of undertaking a new project
1) Develop a list of activities that make up the project, identify the controllable
factors; and for the uncontrollable factor estimate the completion time for each
activity.
2) Determine the immediate preceding activities for each activity in the project.
3) Draw a network showing the activities and precedence relationship of the
activities.
4) Using the network and the activity time estimates determine the earliest
start time and the earliest finish time for each activity by making a forward
movement through the network. The earliest finish time for the last activity in
the project identifies the total time required to complete the project.
5) Using the project completion time identified in step 4 as the latest finish
time for the last activity. Note that the earliest finish time for the last activity is
the same as the latest finish time. This is so because for the very last activity in a
project, the earliest that activity can finish, is also the latest it can finish. Make a
backward movement through the network to identify the start and latest finish
time for each activity.
6) Use the difference between the latest start time and the earliest start time
for each activity to identify the slack time available for the activities with zero
slack; these are the critical path activities.
7) The crashing decision is to reduce the normal completion time of the criti-
cal activities in the project; beginning with the critical activity that has the least
average crashed cost.

6. Conclusion
Operational research techniques are needed to manage the projects circles by
optimizing the project duration so as to minimize the total project time and cost.
The Project evaluation and review technique and the Critical path method are
techniques used to plan the scheduling and optimal staffing of individual activi-

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 K. B. Bagshaw

ties and control projects to completion within a given time. Large-scale project
management necessitates managing several activities across the organization, and
these tools are used to aid the step-by-step activities in a priority relationship, in
order to minimize the total cost of the project by managing time and project ef-
ficiency. CPM is driven through network activities, optimizing the duration of
the project, ensuring cost minimization and time of projects. Thus, they are
useful tools for managing complex, small and medium-sized projects. Taking
into consideration a project that has uncertain activities or an estimated start
and end date for each specific activity, PERT provides management with a clear
definition of time and cost, an operational network that relates all activities to a
time dimension, resource requirements and a method for showing critical and
non-critical activities. These tools (PERT and CPM) are now found to be useful
in construction, transportation, education, and telecommunications projects. It
is, however, important to note that traditional means of project management or
the use of the Gant chart limit the success of project management.

7. Recommendations
Based on the investigations carried out on the application of PERT and CPM in
project management, this paper recommends that:
1) In deciding between using PERT or CPM in effective project management,
a project manager must identify the nature of the estimated time duration of a
project, as PERT will be more effective for projects with an unknown time esti-
mate, while CPM will work well for a project with a known time estimate.
2) Prior to commencing the execution of a project, all required resources to
cover every activity must be assembled and prioritized to eliminate interruptions
that could bring delay and unnecessary cost implications.
3) Policies focused on improving project execution should be implemented in
developing nations to minimize the many cases of failed and delayed projects.
Subsequently, stakeholders in projects must be given the right, under the law, to
prosecute the government, its agencies and/or the executors of projects for fail-
ure to execute a project on schedule.

Conflicts of Interest
The author declares no conflicts of interest regarding the publication of this pa-
per.

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