PROJECT MANAGEMENT by SIMARN GREWAL

1. INTRODUCTION TO
PERT/ CPM
By: Simranjeet kaur
M.COM (SEM 2)
6810
To: Mrs.Nivedita Sharma

2. PROJECT MANAGEMENT
Project
 A project is an interrelated set of activities
that has a definite starting and ending point
and that results in a unique product or
service.
Project Management
 Project management is a scientific way of
planning, implementing ,monitoring
&controlling the various aspects of a project
such as time,money,materials ,manpower,
other resources.

3. STAGES OF PROJECT MANAGEMENT
1.PROJECT PLANNING: Project planning refers to
the formulation of plans of an undertaking to build up
new production capacities or to diversify its business
activities or to extend its existing capacities. Project
planning is the first and foremost stage in the execution of a
project.
2.APPRAISAL OF PROJECTS : The term “project
appraisal "refers to the detailed evaluation of the project
to determine its technical ,economic and financial
viabilities. Project appraisal refers to detailed evaluation
of the project .

4. STAGES OF PROJECT MANAGEMENT
3. IMPLEMENTATION: It is the stage of actual
implementation .Various techniques such as project cost
sheet ,barcharts,network techniques like PERT and CPM
that help in completing the project on schedule with
desired cost frame.
4.REVIEW AND CONTROL : Review and control helps to
ensure that the plans are achieved as desired within the
stipulated time and cost.The successful execution of a
project requires regular and continuous review and control
off the project.

5. NETWORK ANALYSIS
 Network analysis is the general name given to certain specific
techniques which can be used for planning ,management and
control of project.The two most useful techniques of project
management:-
1. PROG
2. Critical path method (CPM)
 Basic key concept :-
• Network : A network is a graphical representation of the project and
comprises of series of activities.
• Activities: A task or a certain amount of work required in the project
,requires time to complete and represented by an arrow.
• Event : An event represent the start and end point of an activity .It is
represented by a circle ( NODE)
Activity
event event

6.  NODE :- A node is represented by a circle .It indicate
event ,appoint in time where one and more activities
start and / or finish .
 DUMMY ACTIVITY :- An activity which depicts
the relationship over the other but do not consume any
time or resources are called dummy activities.
 PATH :- Path refers to the unbroken chain of activities
between events.
 ACTIVITY-ON- NODE(AON):- Use nodes to
represent activities and arrows indicate precedence
relationship between them.
 ACTIVITY –ON –ARROW (AOA):- Arrows represent
activities and nodes are events for points in time.

7. Critical path method (CPM)
 Definition:-critical path is the sequence of
activities between a project’s start and finish that
task the longest time to complete .
 Steps in determining critical path:-
1. Specify the individual activities.
2. Determine the sequence of activities.
3. Draw the network diagram.
4. Estimate the activity completion time.
5. Identify the critical path .
6. Update the CPM diagram.

8. Critical path :The longest path ; determine
the project duration.
Critical activities:-all of the activities that
make up the critical path .
Forward pass;-
 Earliest start time (ES):-Earliest time an activity can start
where ES= maximum EF of immediate predecessors.
 Earliest finish time (EF) :- Earliest time an activity can
finish and earliest start time plus activity time EF=ES +t.
Backward pass:-
 Latest start time (LS) :- Latest time is an activity can start
without delaying critical path time .
 Latest finish time (LF) :- Latest time is an activity can be
completed without delaying critical path time.
LS= minimum LS of immediate predecessors

9.  Slack time :- slack time for an activity is the difference
between its earliest and latest start time or between the
earliest and the latest finish time. Critical path is the path
of activities having zero slack time .
 EXAMPLE

10. SOLUTION:

12. Programme Evaluation And Review
Technique (PERT)
 PERT is based on the assumptions that activity’s duration follows a
probability distribution instead of being a single value .
 Three time estimates are required to compute the parameters of an activity’s
duration distribution :
 Pessimistic time (tp)- the time of the activity would take if things did not go
well
 Mostly like time (tm)- the consensus best estimate of the activity’s
duration
 Optimistic time (to)-the time the activity would take of things did go
well
Te = a+4m+b
6

13. PERT ANALYSIS
 Draw a network .
 Analyze the paths through the network and final
the critical path .
 The length of the critical path is the mean of the
project duration probability distribution which is
assumed to be normal .
 The standard deviation of the project duration
probability distribution is computed by adding the
variances of the critical activities ( all of the
activities that make up the critical path) and taking
the square root of that sum.
 Probability computations can now be made using
the normal distribution table .

16. Difference between CPM and PERT
CPM PERT
1. It is an activity orientedtechnique.
2. It its only one time estimate .
3. It uses network diagram
4. It is deterministic
5. It takes cost parameters into
account
6. The concept of ‘crashing’ is
applied
7. It is normally used where the
emphasis is on trade off between
cost and completion date for large
projects.
8. E.g. plant maintanc,civil construction
1. It is an event orientedtechnique
2. It uses three times estimatesthat is
optimistictime, most likely time
and pessimistic time.
3. It uses network diagram
4. It is probabilistic
5. It does not take cost parametersinto
account
6. There is no ‘crashing’in PERT
7. It is normally used when high
precision isrequired in time
estimateswithout consideringthe
cost implications.

17. Crashing of project
 Crashing a project implies reducing the duration of the
project by employing more resources to it.
 procedure for crashing:-
1. Construct the network diagram and find critical
path.
2. Examine cost time slop of different activities on
the critical path which is calculated as cost slop
crash cost – normal cost
FORMULA= normal time –crash cost
3. Start crashing the activity in the critical path, by
crashing the activity having lower cost slope first.
4. Determine the total cost of the project .
5. Construct the new critical path after crashing of an
activity has been completed and revised costs
obtained.

18. CONCLUSION:
 To conclude that, if you as a project
manager are working with a project for
the first time it would probably ‘PERT’.
After using the method and getting more
consistent completion times for
activities , they at that point can
become the duration of those activities
using CPM
THANK YOU