1. Decision making and Organization Management
CPM/PERT
Critical
Path
Method
Project
Evaluation
Review
Technique
Pongsa Pornchaiwiseskul, Faculty of Economics, Chulalongkorn University
Pongsa Pornchaiwiseskul, Faculty of Economics, Chulalongkorn University

2. Decision making and Organization Management
CPM/PERT
Tools for Project Management
Minimum Project Duration
Scheduling
Time-cost Trade-offs
Resoruce Leveling (not to be discussed)
Pongsa Pornchaiwiseskul, Faculty of Economics, Chulalongkorn University
Pongsa Pornchaiwiseskul, Faculty of Economics, Chulalongkorn University

3. Decision making and Organization Management
Critical Path Method
Network-based (to be seen why)
An LP Problem but much more simple that it can be solved by hand
Deterministic (all the parameters are known or assumed with certainty)
Pongsa Pornchaiwiseskul, Faculty of Economics, Chulalongkorn University
Pongsa Pornchaiwiseskul, Faculty of Economics, Chulalongkorn University

4. Project Evaluation Review Technique
Decision making and Organization Management
Project Evaluation Review Technique
Extension of CPM
Probability Concept is added to CPM
Good for a project which has never been done before. Some uncertainty involved
Pongsa Pornchaiwiseskul, Faculty of Economics, Chulalongkorn University
Pongsa Pornchaiwiseskul, Faculty of Economics, Chulalongkorn University

5. Decision making and Organization Management
PROJECTS
There are many activities. Each activity takes time.
Some activities (successors) cannot start until the other activities (predecessors) finish.
Can be represented by a directed network
Examples are construction, scientific project and thesis
Pongsa Pornchaiwiseskul, Faculty of Economics, Chulalongkorn University
Pongsa Pornchaiwiseskul, Faculty of Economics, Chulalongkorn University

6. Activity-on-Node (AoN)
Decision making and Organization Management
Activity-on-Node (AoN)
Act. A
Act. B
Act. C
Act. D
Pongsa Pornchaiwiseskul, Faculty of Economics, Chulalongkorn University
Pongsa Pornchaiwiseskul, Faculty of Economics, Chulalongkorn University

7. Activity-on-Arc (AoA)
Decision making and Organization Management
Activity-on-Arc (AoA)
activity A
activity B
activity C S F
activity D
Pongsa Pornchaiwiseskul, Faculty of Economics, Chulalongkorn University
Pongsa Pornchaiwiseskul, Faculty of Economics, Chulalongkorn University

8. Decision making and Organization Management
EXAMPLE OF CPM
Activity Time Predecessors
DIG
FOUND DIG
POURB FOUND
JOISTS FOUND
WALLS FOUND
RAFTERS WALLS, POURB
FLOOR JOISTS
ROUGH FLOOR
ROOF RAFTERS, JOISTS
FINISH ROUGH, ROOF
SCAPE POURB, WALLS
Pongsa Pornchaiwiseskul, Faculty of Economics, Chulalongkorn University
Pongsa Pornchaiwiseskul, Faculty of Economics, Chulalongkorn University

9. MINIMUM PROJECT DURATION
Decision making and Organization Management
MINIMUM PROJECT DURATION
Network Method
by hand
by computer programs,e.g., Microsoft Project (not to be discussed)
Solving its corresponding LP problem
by computer or by hand
Pongsa Pornchaiwiseskul, Faculty of Economics, Chulalongkorn University
Pongsa Pornchaiwiseskul, Faculty of Economics, Chulalongkorn University

10. Decision making and Organization Management
Network Method by Hand
Determine Longest route between start and end
Performed in two steps.
Forward Pass(from start to end)
Backward Pass (from end back to start)
Pongsa Pornchaiwiseskul, Faculty of Economics, Chulalongkorn University
Pongsa Pornchaiwiseskul, Faculty of Economics, Chulalongkorn University

11. Decision making and Organization Management
FORWARD PASS
(1) The project starts at time zero
(2) Every starting activity has an Earliest Start(ES) at zero
(3) Earliest Finish(EF) of an activity is ES + activity time
EFj = ESj + Dj
(4) For an activity j w/ predecessors,
ESj = max{ its predecessors’ EF}
Pongsa Pornchaiwiseskul, Faculty of Economics, Chulalongkorn University
Pongsa Pornchaiwiseskul, Faculty of Economics, Chulalongkorn University

12. Decision making and Organization Management
FORWARD PASS (cont’d)
(5) The minimum project duration (T)
T = max{EF of activities w/o successors}
Note that
1) The project can earliest finish at time T
2) It can finish later than time T but not before
Pongsa Pornchaiwiseskul, Faculty of Economics, Chulalongkorn University
Pongsa Pornchaiwiseskul, Faculty of Economics, Chulalongkorn University

13. Decision making and Organization Management
BACKWARD PASS
(1) The project finishes at time T
(2) All the activities w/o successors can Latest Finish(LF) at time T. Their LF = T
(3) Latest Start(LS) of an activity j is its LF minus activity duration (D),I.e.,
LSj = LFj - Dj
(4) LF of an activity w/ successors
= min {LS of its successors}
Pongsa Pornchaiwiseskul, Faculty of Economics, Chulalongkorn University
Pongsa Pornchaiwiseskul, Faculty of Economics, Chulalongkorn University

14. Decision making and Organization Management
AoN Representation
JOISTS(3)
FLOOR(4)
ROUGH(6)
DIG(3)
FOUND(4)
POURB(2)
RAFTERS(3)
ROOF(7)
FINISH(5)
WALLS(5)
SCAPE(2)
Pongsa Pornchaiwiseskul, Faculty of Economics, Chulalongkorn University
Pongsa Pornchaiwiseskul, Faculty of Economics, Chulalongkorn University

15. Decision making and Organization Management
AON Legend ES EF
ACTIVITY (D) LS LF
Pongsa Pornchaiwiseskul, Faculty of Economics, Chulalongkorn University
Pongsa Pornchaiwiseskul, Faculty of Economics, Chulalongkorn University

16. Decision making and Organization Management
AoN Representation 7 10 10 14 14 20
JOISTS(3)
FLOOR(4)
ROUGH(6) 9 12 12 16 16 22 3 3 7 7 9 12 15 15 22 22 27
DIG(3)
FOUND(4)
POURB(2)
RAFTERS(3)
ROOF(7)
FINISH(5) 3 3 7 10 12 12 15 15 22 22 27 7 12 12 14
WALLS(5)
SCAPE(2) 7 12 25 27
Pongsa Pornchaiwiseskul, Faculty of Economics, Chulalongkorn University
Pongsa Pornchaiwiseskul, Faculty of Economics, Chulalongkorn University

17. Decision making and Organization Management
AoA Representation
FLOOR 4
ROUGH 6 D F H
JOISTS 3
FINSIH 5
ROOF 7
DIG 3
FOUND 4 A B C G I
POURB 2
RAFTERS 3
WALLS 5
SCAPE 2 E
Pongsa Pornchaiwiseskul, Faculty of Economics, Chulalongkorn University
Pongsa Pornchaiwiseskul, Faculty of Economics, Chulalongkorn University

18. Decision making and Organization Management
RESULT
Activity Time Predecessors ES EF LS LF
DIG
FOUND DIG
POURB FOUND
JOISTS FOUND
WALLS FOUND
RAFTERS WALLS, POURB
FLOOR JOISTS
ROUGH FLOOR
ROOF RAFTERS, JOISTS
FINISH ROUGH, ROOF
SCAPE POURB, WALLS
Pongsa Pornchaiwiseskul, Faculty of Economics, Chulalongkorn University
Pongsa Pornchaiwiseskul, Faculty of Economics, Chulalongkorn University

19. Decision making and Organization Management
LP Representation
MAX
3DIG+4FOUND+2POURB+3JOISTS+5WALLS
+3RAFTERS+4FLOOR+6ROUGH+7ROOF+5FINISH
+2SCAPE
SUBJECT TO
2) DIG <=1
3) FOUND - DIG = 0
4) JOISTS + POURB + WALLS - FOUND =0
Pongsa Pornchaiwiseskul, Faculty of Economics, Chulalongkorn University
Pongsa Pornchaiwiseskul, Faculty of Economics, Chulalongkorn University

20. LP Representation(cont’d)
Decision making and Organization Management
LP Representation(cont’d)
5) FLOOR + DUMMY - JOISTS =0
6) RAFTERS + SCAPE - POURB - WALLS = 0
7) ROUGH - FLOOR = 0
8) ROOF - RAFTERS - DUMMY = 0
9) FINISH - ROUGH - ROOF = 0
END
Pongsa Pornchaiwiseskul, Faculty of Economics, Chulalongkorn University
Pongsa Pornchaiwiseskul, Faculty of Economics, Chulalongkorn University

21. Decision making and Organization Management
SCHEDULING WITH BAR CHART
Activity
DIG
FOUND
POURB
JOISTS
WALLS
RAFTERS
FLOOR
ROUGH
ROOF
FINISH
SCAPE 5 10 15 20 25
Pongsa Pornchaiwiseskul, Faculty of Economics, Chulalongkorn University
Pongsa Pornchaiwiseskul, Faculty of Economics, Chulalongkorn University

22. Decision making and Organization Management
CRITICAL ACTIVITIES
activities with zero slack.
slack = LS -ES
or = LF - EF
critical activities form a Critical Path
Pongsa Pornchaiwiseskul, Faculty of Economics, Chulalongkorn University
Pongsa Pornchaiwiseskul, Faculty of Economics, Chulalongkorn University

23. Decision making and Organization Management
TIME COST TRADE-OFFS
Choose to shorten the critical activity with lowest cost until the activity becomes non-critical.
Pongsa Pornchaiwiseskul, Faculty of Economics, Chulalongkorn University
Pongsa Pornchaiwiseskul, Faculty of Economics, Chulalongkorn University

24. Decision making and Organization Management
CRASHING THE PROJECT
Decrease the project duration by shortening the activities.
Activity Normal Duration Max. Crash $/day
DIG
JOIST
WALLS
FINISH
Pongsa Pornchaiwiseskul, Faculty of Economics, Chulalongkorn University
Pongsa Pornchaiwiseskul, Faculty of Economics, Chulalongkorn University

25. Decision making and Organization Management
UNCERTAINTY
Activity duration could be uncertain
A - optimistic time estimate
B - pessimistic time estimate
M - most likely time estimate (mode)
Pongsa Pornchaiwiseskul, Faculty of Economics, Chulalongkorn University
Pongsa Pornchaiwiseskul, Faculty of Economics, Chulalongkorn University

26. Decision making and Organization Management
DURATION ESTIMATES A M B
time
Mean D = (A+4M+B)/6
Standard Deviation SD = (B-A)/6
Pongsa Pornchaiwiseskul, Faculty of Economics, Chulalongkorn University
Pongsa Pornchaiwiseskul, Faculty of Economics, Chulalongkorn University

27. Decision making and Organization Management
PERT Method
Do CPM using its Mean D for the duration of each activity
CPM yields the Mean project duration
The variance of project duration T
Var(T) = sum of Var(D) for all the critical activities in a CP
Pongsa Pornchaiwiseskul, Faculty of Economics, Chulalongkorn University
Pongsa Pornchaiwiseskul, Faculty of Economics, Chulalongkorn University

28. Decision making and Organization Management
RESULT
Activity Time Predecessors ES EF LS LF
DIG
FOUND DIG
POURB FOUND
JOISTS FOUND
WALLS FOUND
RAFTERS WALLS, POURB
FLOOR JOISTS
ROUGH FLOOR
ROOF RAFTERS, JOISTS
FINISH ROUGH, ROOF
SCAPE POURB, WALLS
Pongsa Pornchaiwiseskul, Faculty of Economics, Chulalongkorn University
Pongsa Pornchaiwiseskul, Faculty of Economics, Chulalongkorn University