COMPARATIVE CHARACTERISTICS OF PERT AND CPM PERT 1. For management of new projects 2. Model under uncertainty 3. Time 4. Event oriented CPM 1. For management of repetitive projects. 2. Model under certainty 3. Time versus cost trade-off 4. Activity oriented.
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
COMPARATIVE CHARACTERISTICS OF PERT AND CPM
PERT
1. For management of new projects
2. Model under uncertainty
3. Time
4. Event oriented
CPM
1. For management of repetitive projects.
2. Model under certainty
3. Time versus cost trade-off
4. Activity oriented.
DEFINITION : These are the methods to minimize trouble spots such as production bottlenecks, delays, interruptions etc. by identifying the key/critical activities before they occur so that the over-all project can be coordinated more effectively.
NETWORK TECHNIQUES
PERT: PROGRAM EVALUATION AND REVIEW TECHNIQUE
CPM: CRITICAL PATH METHOD
GERT: GRAPH EVALUATION AND REVIEW TECHNIQUE
PDM: PRECEDENCE DIAGRAMMING METHOD
DCPM: DECISION CRITICAL PATH METHOD
A GANTT MILESTONE CHART
JOB A
JOB B
JOB C
M T W T F S S M T W T F S
REVIEW
LIMITATIONS
1. FAILURE TO SHOW INTER-RELATIONS
2. FAILURE TO PREDICT THE LIKELIHOOD OF MEETING THE DUE DATE.
1 2
3 4
65
1 2
4
65
3
1 2
4
65
3
JOB A
JOB B
JOB C
STAGE I
STAGE II
1 2
4
65
3
2
3 3
1
2 6 5
2
STAGE III
TIME
TIME
JOB A
JOB B
JOB C
TIME
STEPS INVOLVED IN USING THE NETWORK TECHNIQUES
1. Divide the given project into independent activities.
Whenever there are two or more jobs which have some but not all their predecessors in common, the use of dummy activity/activities will be necessitated.
Two or more jobs cannot start and end at the same events respectively.
3
76
5
1
aa'
c
bD1
D2
d e
3
65a
a’ b
d ec
1
2
2 4
4D1
3
a
b D1
ec
2
1
4
2 5
ab
d
ec
3
1
5
6D2
d
3
a
b
ec
2
1
4
5D2
dD1
D1
D2
4
T-3 (6, 4)
T-4 (18, 3)
T-5 (13, 1)
T-6 (16, 3)
T-7 (17, 3)
T-8 (14, 1)
T-9 (20, 1)
T-10 (21, 3)
T-11 (10, -)
T-12 (21, 6)
T-13 (15, 5)
T-14 (16, 3)
2
62
3
11
4
5
8
5
4
7
1
1
3
3½
2 ½
1½ 0 0
5 7
13½
8 11
1 ½ 13½
49.½ 9½
4 7 8
CRITICAL PATH IS
6½ 8½
6 6
LEGEND/KEY
TE
TL
EV.NO
1 1
EARLIEST EVENT TIME AT AN EVENT IS THE EARLIEST TIME AT WHICH THE WORK ON THE ACITIVITY/ACTIVITIES ORIGINATING FROM THAT EVENT CAN BE STARTED.
LATEST EVENT TIME AT AN EVENT IS THE LATEST TIME AT WHICH THE WORK ON THE ACTIVITY/ ACTIVITIES CONVERGING AT THAT EVENT MUST BE FULLY ACCOMPLISHED.
TOTAL FLOAT IS THE MAXIMUM DURATION BY WHICH A NON-CRITICAL ACTIVITY CAN BE EXTENDED WITHOUT DELAYING THE PROJECT.
FREE FLOAT (EARLY) IS THE LEEWAY AVAILABLE TO A NON-CRITICAL ACTIVITY IF EVERY OPERATION IN THE PROJECT IS BEING SCHEDULED AT THE EARLIEST POSSIBLE POINT IN TIME.
INDEPENDENT FLOAT MAY BE DEFINED AS MINIMUM ACTIVITY FLOAT OR FLOAT AVAILABLE UNDER WORST CONDITIONS.
FREE FLOAT (LATE) IS THE LEEWAY AVAILABLE TO A NON-CRITICAL ACTIVITY IF EVERY OPERATION IN THE PROJECT IS BEING SCHEDULED AT THE LATEST POSSIBLE POINT IN TIME.
THE PRESIDENT OF ABC MANUFACTURING COMPANY HAS AN OPPORTUNITY TO PARTICIPATE IN A PROJECT THAT HAS A SALES PRICE OF RS.90,000 BUT IT MUST BE COMPLETED WITHIN 8 WEEKS. THE LETTER OF INTENT WAS RECEIVED FRIDAY AFTERNOON. BOTH THE PRODUCTION MANAGER AND THE COST ACCOUNTANT CAME IN ON SATURDAY AND COMPLETED THE APPROPRIATE TIME AND COST FOR YOU BASED UPON PAST JOBS. SINCE THE PRESIDENT NEEDS AN ANSWER AT 8:30 A.M. ON MONDAY (START OF THE 8 WEEKS), YOU HAVE BEEN REQUESTED TO DETERMINE THE PROFITABILITY OF THE PROJECT ON AN 8 WEEKS BASIS. AN ANSWER AT 8:30 A.M. ON MONDAY ALLOWS THE FIRM TO START THE PRODUCTION ORDER AT 10:00 A.M. IN ORDER TO STAY WITHIN THE 8 WEEKS DEMANDED BY THE CUSTOMER. THE TIME AND COST UNDER NORMAL CONDITIONS WITHOUT CRASHING THE PROJECT IS BASED UPON ON 11 WEEKS BASIS. WHAT ANSWER SHOULD THE PRESIDENT GIVE TO THE CUSTOMER ON MONDAY MORNING? A TABLE OF TIMES AND COSTS IS AS FOLLOWS:
PRECEDING NORMAL CRASHEVENT EVENT ________________ ________________
ACTIVITY PREDECESSOR NORMAL CRASHIDENTIFI- ACTIVITIES ________________ ________________CATION TIME COST TIME COST
(DAYS) (RS.) (DAYS) (RS.)
a - 2 30 1 50 b - 4 50 3 70 c - 4 40 2 100 d a,b 4 35 4 35 e b,c 8 75 6 150 f c 2 60 1 90 g d 6 40 4 90 h g,e,f 12 160 7 260 i h 6 100 4 200
LIMITATIONS OF NETWORK TECHNIQUES.
1. BREAKING THE PROJECT INTO INDEPENDENT ACTIVITIES.
2. TECHNIQUES ARE BASED ON NON-CYCLIC NETWORKS I.E. CAN NOT ACCOUNT FOR FAILURES.
3. ACTIVITY TIME ESTIMATES ARE ASSUMED TO BE INDEPENDENT.
4. NO RESOURCE LIMITATION.
3
5A
BE
D
1
2
10
4
10/10
0/0
15/15
25/25
6
105 C
9 daysB
6
12 3
A C E
10 5 10
4
D
11 DAYS
4
V VV
BASIC CONCEPTS OF NETWORK COST SYSTEMS
THE BASIC CONCEPT OF PERT AND CPM COST SYSTEMS (PERT/COST) IS THAT THE COSTS ARE TO BE MEASURED AND CONTROLLED PRIMARILY ON A PROJECT BASIS RATHER THAN ACCORDING TO THE FUNCTIONAL ORGANISATION OF A FIRM.
INDIVIDUAL ACTIVITIES OR GROUPS OF ACTIVITIES FORM MICRO COST CENTRES FOR ACCOUNTING AND MANAGEMENT CONTROL PURPOSES, RATHER THAN ORGANISATIONAL UNITS, i.e. DIVISIONS, DEPARTMENTS, SECTIONS ETC.
PROJECT MANAGERS AND SUB-MANAGERS ARE ORDINARILY CHOSEN FOR SUPERVISING ACTIVITIES OR GROUPS OF ACTIVITIES. THE RATIONALE BEING THAT RESPONSIBILITY FOR EXPENDITURE SHOULD COINCIDE WITH RESPONSIBILITY FOR MANAGING WHICH GIVES RISE TO THE EXPENDITURE AND SINCE THEY ARE RESPONSIBLE FOR SEEING THAT ACTIVITIES ARE COMPLETED ON SCHEDULE, THEY SHOULD ALSO BE RESPONSIBLE FOR CONTROLLABLE COSTS ASSOCIATED WITH ACTIVITIES.
COST OVERRUNS ARE MORE EASILY DETECTED AND CORRECTIVE ACTION MORE READILY TAKEN.
If the indirect cost per week is Rs.400, determine the optimal
project duration.
NEW PRODUCT LAUNCH
In planning a project to introduce a new product in the market, a company lists the various activities, their normal times and costs and their crash times and costs as shown in the table below:
Activity Description Immediate Normal Crash predecessor(s)
Time Cost Time Cost (weeks) (Rs.) (weeks) (Rs.)
A Product - 5 1000 4 1200design
B Market - 2 600 2 600research
C Product A 4 800 3 1000 analysis D Product A 4 1000 3 1500