Project Management in Practice, Fourth Edition Prepared by Scott M. Shafer, Updated by William E. Matthews and Thomas G. Roberts, William Paterson University Copyright 2011 John Wiley & Sons, Inc. 5-1 Mantel, Meredith, Shafer, and Sutton John Wiley and Sons, Inc.

PERT and CPM Copyright 2011 John Wiley & Sons, Inc. 5-2 Program Evaluation and Review Technique (PERT) U.S. Navy, Booz-Allen Hamilton, and Lockheed Aircraft probabilistic activity durations Critical Path Method (CPM) Dupont De Nemours Inc. deterministic activity durations

The Language of PERT/CPM Copyright 2011 John Wiley & Sons, Inc. 5-3 Activity a task or set of tasks uses resources and time Event an identifiable state resulting from completion of one or more activities consumes no resources or time predecessor activities must be completed

The Language of PERT/CPM continued Copyright 2011 John Wiley & Sons, Inc. 5-4 Milestones identifiable and noteworthy events that mark significant progress Network a diagram of nodes (activities or events) and arrows (directional arcs) that illustrate the technological relationships of activities Path a series of connected activities between two events

The Language of PERT/CPM concluded Copyright 2011 John Wiley & Sons, Inc. 5-5 Critical Path the set of activities on a path (from the projects start event to its finish event) that, if delayed, will delay the completion date of the project Critical Time the time required to complete all activities on the critical path

Building the Network Copyright 2011 John Wiley & Sons, Inc. 5-6 There are two ways of displaying a project network Activities on Arrows (AOA) network … in which the activities are shown as arrows and events as nodes Activities on Nodes (AON) network … in which each task is shown as a node and the technological relationship is shown by the arrows

AON Network Stage 1 Copyright 2011 John Wiley & Sons, Inc. 5-7

AON Network - Stage 2 Copyright 2011 John Wiley & Sons, Inc. 5-8

AON Network - Complete Copyright 2011 John Wiley & Sons, Inc. 5-9

AOA Network – Stage 1 Copyright 2011 John Wiley & Sons, Inc. 5-10

AOA network – Stage 2 Copyright 2011 John Wiley & Sons, Inc. 5-11

AOA Network - Complete Copyright 2011 John Wiley & Sons, Inc. 5-12

AOA Network – Showing The Use of a Dummy Task Copyright 2011 John Wiley & Sons, Inc. 5-13

Information Contents in an AON Node Copyright 2011 John Wiley & Sons, Inc ESEF ES - Earliest start time EF - Earliest finish time LS - Latest start time LF - Latest finish time LSLF ActivityActivity nameduration

Calculating Activity Slack Copyright 2011 John Wiley & Sons, Inc Latest Start Time (LS) – Earliest Start Time (ES) = Slack Latest Finish time (LF) – Earliest Finish time (EF) = Slack

Calculating Probabilistic Activity Times Copyright 2011 John Wiley & Sons, Inc The expected time (T E ) is based on three time estimates PESSIMISTIC (A) MOST LIKELY (M) OPTIMISTIC (B)

The Statistical Distribution of all Possible Times for an Activity Copyright 2011 John Wiley & Sons, Inc. 5-17

Activity Expected Time and Variance Copyright 2011 John Wiley & Sons, Inc. 5-18

95 Percent Level Copyright 2011 John Wiley & Sons, Inc Task will be a or lower 5 percent of the time Task will be b or greater 5 percent of the time

90 Percent Level Copyright 2011 John Wiley & Sons, Inc Task will be a or lower 10 percent of the time Task will be b or greater 10 percent of the time

The Probability of Completing the Project on Time Copyright 2011 John Wiley & Sons, Inc =NORMDIST( D,,,TRUE) Note: NORMDIST is a function within Excel when using the spreadsheet method

Selecting Risk and Finding D Copyright 2011 John Wiley & Sons, Inc NORMINV(probability,,,TRUE) Note: NORMMINV is a function within Excel when using the spreadsheet method

Traditional Statistics Versus Simulations Copyright 2011 John Wiley & Sons, Inc Similarity both procedures assume that task durations are statistically independent and the paths are independent Difference a simulation can circumvent the assumption of statistical independence by including the activity or path dependencies as part of the model

Gantt Chart of a Sample Project Copyright 2011 John Wiley & Sons, Inc. 5-24

Gantt Chart of Sample Project Showing Critical Path, Path Connections, Slack, ES, LS, EF, and LF Copyright 2011 John Wiley & Sons, Inc. 5-25

Extensions to PERT/CPM Copyright 2011 John Wiley & Sons, Inc Finish to Start (F to S) finish of Activity A to start of Activity B Start to Start (S to S) start of Activity A to start of Activity B Finish to Finish (F to F) finish of Activity A to finish of Activity B Start to Finish (S to F) start of Activity A to finish of Activity B

Precedence Diagramming Conventions Copyright 2011 John Wiley & Sons, Inc. 5-27

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