PROJECT MANAGEMENT NETWORK ANALYSIS(CPM & PERT)BYG.Venkatachalam, M.Com, MBA, M.Phil, (Ph.D)Associate Professor/MBA

What is a project?A project is an interrelated set of activities that has definite starting and ending points and that result in a unique product or serviceCuts across organizational lines they need varied skills of different professionUncertainties like new technology & external environment can change the character of the projectPersonnel, materials, facilities etc. are temporarily assembled to accomplish a goal within a specified time frame and then disbanded

NETWORK ANALYSISNetwork Analysis refers to a number of techniques for the planning and control of complex projects.

The two most frequently used forms of network planning are: Programme Evaluation and Review Technique (PERT) Critical Path Method (CPM)

WHAT IS A NETWORK?A network is a graphical diagram consisting of certain configuration of Arrows () and Nodes () for showing the logical sequence of various tasks to be performed to achieve the project objective.

Project management generally consists of three phases.Planning:

Planning involves setting the objectives of the project. Identifying various activities to be performed and determining the requirement of resources such as men, materials, machines, etc.

The cost and time for all the activities are estimated,

Scheduling:

Based on the time estimates, the start and finish times for each activity are worked out by applying forward and backward pass techniques, critical path is identified, along with the slack and float for the non-critical paths.Controlling:

Controlling refers to analyzing and evaluating the actual progress against the plan. Reallocation of resources, crashing and review of projects with periodical reports are carried out.

COMPONENTS of PERT/CPM NETWORKPERT / CPM networks contain two major componentsi. Activities, andii. EventsActivity: An activity represents an action and consumption of resources (time, money, energy) required to complete a portion of a project. Activity is represented by an arrow, (Figure 8.1).Event: An event (or node) will always occur at the beginning and end of an activity. The event has no resources and is represented by a circle. The tail event and head event respectively, (Figure 8.2).

PROGRAMME EVALUATION AND REVIEW TECHNIQUE (PERT)It is a mgt Aid for completing Polaris Ballistic Missile Project in USA in oct-1958.The initial step in PERT/CPM project scheduling process is the determination of all specific activities that comprise the project and their relationships.PERT become very popular technique used for project planning and control. It helps reduce both the time and cost of the project.

Steps involved in PERTThe activities involved in the project are drawn up in sequential relationship to show what activity follows what.The time required for completing each activity of the projectThe critical activities of the project are determinedThe variability of the project duration and probability of the project completion in a given time period are calculated

Advantages of PERTIt determines the expected time required for completing each activityIt helps complete the project with in given period of timeIt helps mgt uncertainties involved in the project and thus reduce the risk element of the projectIt enables mgt to make optimum allocation of limited resourcesIt presses for the right action, at the right point and the right time in the organisation.

CRITICAL PATH METHOD(CPM)CPM was first developed in USA by the E.I Dupont Nemours & co in 1956 for doing periodic overhauling and maintenance of a chemical plant.Resulted in reducing the shut-down period from 130hrs to 90 hrs and saving company Dollar 1Million.CPM differentiates between planning and scheduling of the project. While planning refers to determination of activities to be accomplished, scheduling refers to the introduction of time schedule for each activity of the project.

From the data given in the problem, the activity network is constructed as shown in Figure given below

Advantages of Critical Path Method(CPM)It helps in ascertaining the time schedule of activities having sequential relationshipIt makes control easier for the managementIt identifies the most critical elements in the project. Thus, the mgt is kept alert and prepared to pay due attention to the critical activities of the projectIt makes better and detailed planning possible

Difference between PERT and CPM

S.NoPERTCPM1Its origin is militaryIts origin is industry2It is event orientedIt is an activity oriented3It allows uncertaintyIt does not allows uncertainty4It is a probabilistic modelIt is a deterministic model5It is time basedIt is cost based6It does not differentiate between critical and non critical activityIt marks critical activity7It averages timeIt does not average time8It is suitable when high precision is required in time estimates Ex. Defense ProjectIt is suitable when reasonable precision is required in time estimates Ex. Civil construction project, Expansion

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