Project Management- PERT and CPM

A project is defined as a sequence of tasks that must be completed to attain a certain outcome. According to the
Project Management Institute (PMI), the term Project refers to” any temporary endeavor with a definite beginning and
end”. Depending on its complexity, it can be managed by a single person or more.

Project management simulation is used to analyze real projects. The goal of the simulation is to show the user the
different possible outcomes of his decisions, along with the probability that each outcome will occur. The simulation
helps in reducing the project risk and in choosing the best project plan.

Project management can be defined as a structural way of planning, scheduling, executing, monitoring and controlling
various phases of a project. To achieve the end goal of a project on time, PERT and CPM are two project
management techniques that every management should implement. These techniques help in displaying the progress
and series of actions and events of a project.

Optimized Project Scheduling: Combining PERT and the Critical Path Method:

PERT (Program Evaluation and Review Technique) and CPM (Critical Path Method) are project management
techniques that differ in their focus and approach. PERT is ideal for projects with high uncertainty, accommodating
non-linear activity flows and incorporating probabilistic time estimates to manage risks.
CPM, on the other hand, is suitable for projects with structured activities, emphasizing the critical path to
optimize scheduling and resource allocation. While PERT addresses uncertainties and allows for contingency
planning, CPM aims to streamline project timelines and efficiency through deterministic estimates and activity
dependencies.

Application:
Are you a project manager just getting started in the industry or an experienced one with several large-scale projects
under your belt? Whatever the case, it's best to keep yourself abreast of the latest project management tools to keep
your project planning and execution skills sharp.
In this blog, we discuss two project management techniques, PERT and CPM, that will increase your project's
efficiency and planning. We dive into what these tools mean, how to use them and why you should use both together.

What is PERT?
PERT, or Project/program Evaluations Review Technique, in project management, is a work planning process through
which managers can identify how long it takes to complete a task. It is a statistical tool that visually charts out all
required tasks that must be completed within a specific project. Through PERT, you can also identify the minimum
time necessary to complete a task.

How to Calculate PERT?

The focus of PERT methodology is on time — if time is controlled, project costs will be minimized as well.
To use PERT you need to:
1. List all the activities
2. Identify project milestones
3. Determine activity sequence
4. Draw a chart/network where activities are arrows and milestones are circles
5. Estimate activity duration

PERT methodology uses three points to calculate a weighted time average for events in a project:
• Optimistic (O) - the “best-case” scenario or the shortest time required for a task. This has no risks.
• Most Likely (M) - account for some risks and delays in calculating time.
• Pessimistic (P) - This is the “worst-case” estimate and therefore projects the longest duration to complete the
work.

What is CPM?

Critical Path Mode (CPM) is a step-by-step project management technique that helps identify the longest sequence of
activities that must be completed for a project to be considered “done.”

Advantages of Using CPM:

Some reasons why you should consider using CPM technique include:
 • CPM minimises the number of bottlenecks in a project, improves planned progress and reduces the hours
spent on non-critical tasks.
• The diagram highlights interdependencies in the work scope, so managers can prioritise tasks with a concise
network diagram. This process also helps identify which activities cannot be completed side-by-side.
• The tool allows managers to compare time allotted to activities versus actual time taken.
• CPM also provides a clear communication process between all stakeholders.

How to Calculate CPM

To be able to take advantage of CPM, you need to know how to perform it. Use our step-by-step guide on calculating
CPM for your next project.
1. List all specific activities related to the whole project.
2. Identify the interdependencies amongst tasks. What tasks have an immediate predecessor? This will help to
generate an activity sequence — what tasks have to be completed first and which can run simultaneously.
3. Draw out a network diagram with arrows that visualises the progress amongst tasks.
4. Calculate the time required for each task. You can refer to previous project data, industry standards, or even
your own experience to estimate time.
5. Use the forward pass and backward pass methodologies to calculate the earliest start (ES) time, task durations
and the latest completion time (LC).
6. Highlight the critical path with a clear network diagram. The critical path is the longest time between when
the first task starts to the completion of the last task.
7. Calculate float. Float or slack refers to the amount of flexibility you have within a project. These tasks can get
delayed without impacting the final project delivery irrespective of the predecessor task.

Differences Between PERT and CPM:

While both PERT and CPM are techniques that can lead to effective scheduling and project management, they aren't
the same. We've highlighted the differences between the tool metrics in the following table.

PERT CPM

Type of Tool Visual Tol Statistical Tool

What it
Controls time management Controls costs and time
Controls

Best Use Ideal for research and product development Ideal for construction or manufacturing
Scenario projects used with tasks are non-repetitive processes used with tasks are repetitive

Uses a three-point methodology to estimate Uses one single methodology to estimate time
Methodology time. PERT is calculated based on and cost CPM is focused on activities and
weighted time for events highlights interdepencies
Rules for Designing the Activity-on-Node network diagram:
• A project network should have only one start node
• A project network should have only one end node
• A node has a duration
• Links normally have no duration
• “Precedents” are the immediate preceding activities
• Time moves from left to right in the project network
• A network should not contain loops
• A network should not contain dangles

Critical path method: How to use CPM for project management:

Summary
The critical path method is a technique that allows you to identify tasks that are necessary for project completion. The
critical path in project management is the longest sequence of activities that must be finished on time to complete the
entire project. Below, we break down the steps of how you can find the critical path for your next project.
Building out a project roadmap can help you visualize what needs to be done to reach your end goal. The critical path
method helps you do exactly that. It’s a project management technique that involves mapping out key tasks or critical
tasks necessary to complete a project.
Leveraging this technique allows you to manage task dependencies and set realistic timeframes. Read on to find out
how the critical path method works and how you can use it with your team to optimize project timelines.

What is the critical path method (CPM)?

Also called critical path analysis (CPA), the critical path method (CPM) is a technique where you identify tasks that
are necessary for project completion and determine scheduling flexibilities. A critical path in project management is
the longest sequence of activities that must be finished on time in order for the entire project to be complete. Any
delays in critical tasks will delay the whole project.
CPM revolves around discovering the most important tasks in the project timeline, identifying task dependencies, and
calculating task durations.
CPM was developed in the late 1950s as a methodology to resolve the issue of increased costs due to
inefficient scheduling. Since then, CPM has become popular for planning projects and prioritizing tasks. It helps you
break down complex projects into individual tasks and gain a better understanding of the overall project flexibility.

Why use critical path analysis?

CPA can provide valuable insight on how to plan projects, allocate resources, pace towards milestones, and schedule
tasks.
Here are some reasons why you should use the critical path method:
• Improves future planning: CPM can be used to compare expectations with actual progress. The data used from
current projects can inform future project plans.
• Facilitates more effective resource management: CPM helps project managers prioritize tasks, giving them a
better idea of how to avoid resource constraints.
• Helps avoid bottlenecks: Bottlenecks in projects can result in lost valuable time. Plotting out project
dependencies using a network diagram will give you a better idea of which activities can and can’t run in
parallel, allowing you to schedule work accordingly.

How to find a project's critical path

Finding the critical path involves identifying the longest path between the start and end of the project by comparing
the duration of critical and non-critical tasks. Below is a breakdown of the steps, with examples.
1. List activities
Use a work breakdown structure to list all the project activities or tasks required to produce the deliverables. The list
of activities in the work breakdown structure serves as the foundation for the rest of the CPM.

2. Identify dependencies
Based on your work breakdown structure, determine the tasks that are dependent on one another. This will also help
you identify any work that can be done in parallel with other tasks.
Here are the task dependencies based on the example above:
• Task B is dependent on A
• Task C is dependent on B
• Tasks C and D can run in parallel
• Task E is dependent on D
• Task F is dependent on C, D, and E
The list of dependent tasks is referred to as an activity sequence, which will be used to determine the critical path.

3. Create a network diagram

The next step is to turn the work breakdown structure into a network diagram, which is a flowchart displaying the
chronology of critical path activities. Create a box for each task and use arrows to depict task dependencies.
You’ll add other time-bound components to the network diagram until you have the general project schedule figured
out.

4. Estimate task duration

To calculate the critical path, the longest sequence of tasks, you first need to estimate the duration of each activity.
Alternatively, try using the forward pass and backward pass technique:
• Forward pass: This is used to calculate earliest start time (ES) and earliest finish time (EF) by using a
previously specified start date. ES is the highest EF value from immediate predecessors, whereas EF is ES +
 duration. The calculation starts with 0 at the ES of the first activity and proceeds through the schedule.
Determining ES and EF dates allows for early allocation of resources to the project.
• Backward pass: This is used to calculate the latest start (LS) and latest finish (LF) dates. LS is LF - duration,
whereas LF is the lowest LS value from immediate successors. The calculation starts with the last scheduled
critical path activity and proceeds backward through the entire schedule.
The early and late start and end dates can then be used to calculate float, or scheduling flexibility of each task.

5. Calculate the critical path

Calculating the critical path can be done manually, but you can save time by using a critical path algorithm instead.
Here are the steps to calculate the critical path manually:
Step 1: Write down the start and end time next to each sequence of activities to calculate the sequence's "duration."
• Find the start time of the first activity in the sequence
• Find the end time of the last activity in the sequence
• The duration is the end time of the last activity minus the start time of the first activity
Step 2: Determine the number of dependencies along each sequence.
Step 3: The sequence of activities with the longest duration (end of sequence date - beginning of sequence date) is the
critical path. If multiple sequences of activities have the same duration, the sequence with the greater number of
dependencies is the critical path.

6. Calculate the float

Float, or slack, refers to the amount of flexibility of a given task. It indicates how much the task can be delayed
without impacting subsequent tasks or the project end date. Finding the float is useful in gauging how much flexibility
the project has. Float is a resource that should be used to cover project risks or unexpected issues that come up.

Critical tasks have zero float, which means their dates are set. Tasks with positive float numbers belong in the non-
critical path, meaning they may be delayed without affecting the project completion date. If you’re short on time or
resources, non-critical tasks may be skipped. Calculating the float can be done with an algorithm or manually. Use the
calculations from the section below to determine the total float and free float.

Total float vs. free float

Here’s a breakdown of the two types of float:
• Total float: This is the amount of time that an activity can be delayed from the early start date without
delaying the project finish date or violating a schedule constraint. Total float = LS - ES or LF - EF
• Free float: This refers to how long an activity can be delayed without impacting the following activity. There
can only be free float when two or more activities share a common successor. On a network diagram, this is
where activities converge. Free float = ES (next task) - EF (current task)
There are a few good reasons why project managers benefit from having a good understanding of float:
• It keeps projects running on time: Monitoring a project’s total float allows you to determine whether a project
is on track. The bigger the float, the more likely you’ll be able to finish early or on time.
• It allows you to prioritize: By identifying activities with free float, you’ll have a better idea of which tasks
should be prioritized and which ones have more flexibility to be postponed.
It’s a useful resource: Float is extra time that can be used to cover project risks or unexpected issues that come up.
Knowing how much float you have allows you to choose the most effective way to use it.

To calculate the critical path we will follow the following steps:

1. Step 1: Obtain the project data. ...
2. Step 2: Elaborate the network diagram. ...
3. Step 3: Calculate the Early Start and Late Start Times. ...
4. Step 4: Calculate the Early Finish and

Why Use the Critical Path Method?

Critical path method (CPM) empowers project managers to set priorities, distribute resources, and schedule projects
with confidence. There are various reasons to use this method, including the ones listed below:
Improves Future Planning:
It enables project managers to efficiently prioritize tasks, giving them a clear understanding of how and where to
deploy resources, thereby enhancing productivity.
Helps Avoid Bottlenecks
Project bottlenecks can be a source of stress and time loss. By outlining project dependencies using a network
diagram, you can more accurately decide which tasks can and cannot be finished in parallel, saving time and reducing
stress.
With the help of critical path method (CPM), we’ll be able to create a model that enables you to determine the
following:
• Tasks required to complete the project
• Dependencies between tasks
• The duration required to complete an activity
Before we can get started with CPM or the Critical Path Method, we’ll have to understand two major concepts: events
and Activities. To help us understand them better, let’s look at the process's network diagram (which is also the
output).

This output represents some of the most important parts of the process: Events and Activities.
Event
Events are represented by a circle and will occur at the start and end of an activity. Event 1 is the tail event and Event
2 is the head event. In the case of our example, the events are 1, 2,3,4, 5, and 6. Taking into consideration, nodes 1 and
2, and the connection between them, 1 will be referred to as the tail event, and 2 will be referred to as the head event.
Similarly, for 2 and 3, 2 is the tail event, and 3 is the head event.
Activity
Activities represent action and consumption of resources like time, money, and energy required to complete the
project. In the case of our example, A, B, C, D, E, and F represent the activities taking place between their respective
events.
Dummy Activity
A dummy activity represents a relationship between two events. In the case of the example below, the dotted line
represents a relationship between nodes 4 and 3. The activity between these nodes will not have any value.
Other rules to consider
• The network should have a unique starting and ending node. In the case of our example, event 1 represents a
unique starting point, and 6 represent the unique completion node.
• No activity can be represented by more than a single arc (the line with an arrow connecting the events) in the
network.
• No two activities can have the same starting and ending node.

Example 2: Draw the network diagram for the following :

Example-3

A project has eleven activities as given below:

Activity 0-1 1-2 1-3 2-4 2-5 3-4 3-6 4-7 5-7 6-7 7-8
Duration 2 8 10 6 3 3 7 5 2 8 3
(days)
Determine:
a) Draw network diagram
b) Determine earliest start, earliest finish and latest start and latest finish for all activity.
c) Identify critical path.

Example-4

Draw the network diagram and find out critical path from the following information.

First, let’s analyze the activities and their immediate predecessors.

Activities A, B, and C don’t have any immediate predecessors. This means that each of them will have individual arcs
connecting to them. First, we’ll draw nodes 1 (which is the starting point) and 2. We’ll add the activity on the arc,
along with the duration.

We’ll have to also keep in mind that A acts as the immediate predecessor for both nodes E and F. Similarly, let’s draw
the arcs for nodes B and C.
Before we can draw the nodes for activity D, a quick look at the table will tell us that it is preceded by activity B and
that a combination of activities C and D act as immediate predecessors for activities H and J. This means that both
activities, C and D, have to connect at some point. That’s why we’ll draw an arc from events 3 and 4.

So now, we’ve completed activities A, B, C, and D of the critical path method. Next, let’s take a look at activity E.
Activity E is preceded by activity A and acts as the immediate predecessor for activity J. Since this is an independent
activity, we’ll be able to draw an arc like this.

If we have a look at activity F, it’s preceded by activity A, and a combination of F, G, and H act as immediate
predecessors for activities K and L. So, let’s wait before we take it up. Instead, let’s shift our attention to activity G.
It’s preceded by B. So, we’ll draw it like so.

Now, let’s take a look at activity H. It is preceded by both C and D and will act as the immediate predecessor for K
and L, along with F and G. So, we can connect node 4 to 6.
Now that we’ve done that, let’s go back to activity F. Now that we know where activities G and H connect to, we can
combine nodes 2 and 6, fulfilling the conditions required for activities K and L.

Following this, we have an activity I. The activity I is preceded by activities C and D. It also acts as an immediate
predecessor to activity M. Since it’s an independent activity, we can draw it like so.

Next, let’s take a look at activity J. Activity J is preceded by activity E. We can also see that a combination of J and K
will act as an immediate predecessor for activity N. We can then draw an arc like this.
Let’s go on to activity K. Here we can see that K is preceded by F, G, and H. It also acts as an immediate predecessor
to activity N. So, we’ll connect nodes 6 to 8.

Next, let’s continue with activity L. The table now shows that L, M, and N don’t act as immediate predecessors for
any other activity. Hence it can be assumed that it’ll connect to the final node.
L is preceded by activities by F, G, and H. The arc can be drawn like so.

We’ll now go to activity M. This activity is preceded by activity I. Similarly, we can connect an arc from node 8 to 9
for activity N.

Now, the network is complete!

Now, let us find the critical path.

For this, we’ll need to find two values, Earliest Start Time (Es) and Latest Completion Time (Lc).
The process of determining the Es for all events is called a forward pass.
The process of determining the Lc for all events is called a backward pass.
Let’s get into the forward pass. For this, first, we’ll need to create boxes at all nodes. These are then divided into
two. The lower half of the box represents the earliest start time of the node, while the upper half represents the latest
completion time.
Your network diagram should look something like this.
For this, we’ll be using the formula, Esj = max (Esi + Dij)
Which when simplified, the earliest start time for the second node (head node), is the maximum of the combination of
the earliest start time of the tail node and the duration between the two nodes.
So, for node 1, the earliest start time is always zero.
For node 2,
it would be, Es2 = 0 (earliest start time for node 1) + 3 (duration between 1 and 2) = 3

For node 3,
it would be, Es3 = 0(Es1) + 4(D1 to 3) = 4
For node 4, we can see that two arcs connect to it. This means that we’ll need to choose among the larger of the two
options available to us.
Es4 = 0(Es0) + 6 = 6 or
Es4 = 4(Es3) + 3 = 7
We’ll choose 7 since it’s larger.

Similarly, we have three options to choose from when it comes to node 6. Since three arcs connect to it.
Es6 = 3(Es2) + 1(D2-3) = 4
Es6 = 4(Es3) + 4(D3-6) = 8
Es6 = 7(Es4) + 5(D4-6) = 12
Hence we’ll select the last option since it’s the largest among the three.
Now, for node 5. Since it’s directly connected to node 2, we can directly apply the formula.
Es5 = 3(Es2) + 9(D2-5) = 12

Let’s take node 8.

Es8 = 12(Es5) + 3(D5-8) = 15 or
Es8 = 12 (Es6) + 6(D6-8) = 18
We’ll choose Es8 as 18 since it’s the larger of the two.
Now for node 7. We can directly apply the formula to these nodes.
Es7 = 7(Es4) + 4(D4-7) = 11

Finally, we’ve got node 9.

It has 3 nodes connecting towards it. We’ll have to choose the maximum of the three.
Es9 = 18(Es8) + 9(D8-9) = 27
Es9 = 12(Es6) + 3(D6-9) = 15
Es9 = 11(Es7) + 6(D7-9) = 17
We’ll choose the arc from node 8 since it’s got the highest value.
And like that, the forward pass is complete.

Now, for the second part of the critical path method. Let’s take up the backward pass. For that’ we will be
using the following formula.

Lci = min(Lcj - Dij)

This, when put simply, means the latest completion time of the tail node is equal to the latest completion time of the
head node minus the distance between the two.
Let’s start from the final node, number 9.
The Lc for this node will always be equal to its Es. So, Lc9 = 27.

Next, let’s have a look at the latest completion time for the 8th node. Since it’s directly connected only to the 9th node,
we can directly apply the formula mentioned earlier.
Lc8 = 27(Lc9) - 9(D9-8) = 18
Now, let’s have a look at the latest completion time for node 7. Since there’s a direct connection between nodes 9 and
7,
Lc7 = 27(Lc9) - 6(D9-7) = 21

Let’s move on to node 6. As we can see in the diagram, there are two points extending to nodes 8 and 9 from node 6.
So we have two options to choose from.
Lc6 = 18(Ls8) - 6(D6-8) = 12 or
Lc6 = 27(Ls9) - 3(D6-9) = 24
We’ll choose the Lc of node 6 as 12.
We’ll now go to node 5. Since it’s directly connected to the 8th node, we can directly apply the equation.
Lc5 = 18(Lc8) - 3(D5-8) = 15

Next up, let’s find the latest completion time for node 4.
Since there are two connections extending from the node, to nodes 6 and 7 respectively, we’ll need to select the
minimum between the two.
Lc4 = 21(Lc7) - 4(D4-7) = 17
Lc4 = 12(Lc6) - 5(D4-6) = 7
We’ll choose 7 as the latest completion time for node 4.
Now for node 3.
Since there are two nodes connecting from node 3 to nodes 4 and 6. So, we’ll need to choose between the 2.
Lc3 = 12(Lc6) - 4(D3-6) = 8 or
Lc3 = 7(Lc4) - 3(D3-4) = 4
We’ll choose 4 as the latest completion time for node 3.

Let’s now go to node 2. Again, since there are two connections made from 2 to node 5 and 6, we’ll need to choose the
minimum among the two.
Lc2 = 15(Lc5) - 9(D2-5) = 6
Lc2 = 12(Lc6) - 1(D2-6) = 11
We’ll choose the latest completion time of 2, as 6.
And finally, we have node 1.
Since there are connections to 2, 3, and 4 from 1, we’ll need to choose from the three.
Lc1 = 6(Lc2) - 3(D1-2) = 3
Lc1 = 4(Lc3) - 4(D1-3) = 0
Lc1 = 7(Lc4) - 6(D1-4) = 1
We’ll choose 0 as the latest completion time for the node.

And there we go! The backward pass is complete

To determine the critical path, there are three major criteria that need to be satisfied.
Esi = Lci
Esj = Lcj
Esj - Esi = Lcj - Lci = Dij
From the diagram, we can see that nodes that satisfy the requirements are: 1, 3, 4, 6, 8, and 9.
Hence the activities on the critical path are B - D - H - K - N.
Hence the critical path is B + D + H + K + N = 4 + 3 + 5 + 6 + 9 = 27.
And there we go! We’ve found the critical path!

PERT Network Analysis

Example 1:
A small project consisting of eight activities has the following characteristics:

• Draw the PERT network for the project.

• Prepare the activity schedule for the project.
• Determine the critical path.
• If a 30- week deadline is imposed, what is the probability that the project will be finished within the
time limit?
If the project manager wants to 99% sure that the project is completed on the schedule date, how many weeks
before that date should he start the project work?

Solution:
The network diagram for the given data is shown in fig. below. The earliest time and variance of each
activity is computed by using the formula.

(ii) Calculation activity duration and scheduling times.

(iii) The critical path of the project is 1-2-4-5 -6, critical activities being A, D, G and H.

The expected project length is the sum of duration of each critical activity. Expected project length = 5 + 15 + 4 + 5 =
29 weeks.

Variance project length is obtained by summing variance of each critical activity.

(Iv) The required probability can be determined by finding the area under the normal curve to the left of X = 30

Now, the probability of completing the project within the 30 week deadline is

(v) If the project start T weeks before the due date, the X will represent the ordinate under normal curve to the left of
which 99% of area lies.

The area between n and X- being 99-50 or 49% and Z – value corresponding to this is 2033 (From table)

Example 2:
A small project consisting of ten activities has the following characteristics:
Determine the critical path
Solution:
Network for the given project is drawn below:

Value of expected time for each activity is shown in following Table:

Time [Earliest & latest] are calculated as follows:

As we can see there are two critical paths along which E-values and L-values are similar, but the longest
network of critical activities is known as critical path.
Critical path is 1-2-3-6-7-8
Expected length of critical path is = 6 + 3 + 4 + 2 + 2 = 17 weeks
Example 3:
Product manager has planned a list of activities culminating in the inaugurate launch of the new products.

These are given in the table below:

What is the probability that product manager will be able to complete the language launch within 80 days-
time?
Solution:
Network diagram for given problem is shown in following fig:

Expected time value for each activity of given network is listed in table below along with three variance.

Value of earliest & latest time is calculated on the basis of expected time te as follows:
Value of earliest & latest time is calculated on the basis of expected time te as follows:
Hence critical path along with E-value and L- value are same i.e., 1- 2-4-5-6-7- 8-9 Expected project
duration is 172.83 days
Variance of project length = Sum of variance of each critical activity = 6.25 + 0.44 + 32.11
+100+1.36+.44+0= 140.6

For Z = -2.77 Probability of completing the project with 80 days-time i.e., 0.3%.

Example 4:
A Project is composed of seven activities whose time estimates are listed in the following table. Activities
are simplified by this beginning (1) ones ending (j) Node member.

Calculate expected project length.

Solution:
Calculation of expected time for each activity is shown in following table:
E- Values and L- values are calculated on the basis of expected time are as follows:

Network diagram for given project along with E-values and L-values is shown by following Fig:

Critical path for the above network 1-3-5-6 shown by double lines; along with E- values and L-values are
same.
Expect project length will be = 4 + 6+ 7 = 17 weeks.