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Project Management

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Benefits and Advantages of Scheduling

Historical Evolution of Network Scheduling

Network Fundamentals and Terminology

Pert/CPM and their Difference

Graphical Evaluation and Review Techniques (GERT)

Dependencies or Interrelationship

Slack Time

28.1 Introduction:

In today’s highly competitive environment, management is continually seeking new and better

control techniques to cope with the complexities, masses of data, and tight deadlines that are

characteristic of many industries.

In addition, management is seeking better methods for presenting technical and cost data to


Since World War II, scheduling techniques have taken on paramount importance. The most

common of these techniques are shown below:

  • Gantt or bar charts
  • Milestone charts
  • Line of balance
  • Networks
    • Program Evaluation and Review Technique (PERT)
    • Arrow Diagram Method (ADM) [Sometimes called the Critical Path Method (CPM)]
    • Precedence Diagram Method (PDM)
    • Graphical Evaluation and Review Technique (GERT)

28.2 Benefits and Advantages of Scheduling:

The Program Evaluation and Review Technique (PERT) perhaps is the best known of all the

relatively new techniques. PERT has several distinguishing characteristics:

• It forms the basis for all planning and predicting and provides management with the ability

to plan.

• It enables management for best possible use of resources to achieve a given goal within

time and cost limitations.

It provides visibility and enables management to control ''one-of-a-kind" programs as

opposed to repetitive situations.

• It helps management to handle uncertainties involved by answering the following questions

that provides management with a means for evaluating alternatives:

a) How time delays in certain elements influence program completion?

b) Where slack exists between elements?

c) What elements are crucial to meet the completion date?

  • It provides a basis for obtaining the necessary facts for decision making.
  • It utilizes a time network analysis as the basic method to determine manpower, material, and capital requirements as well as providing a means for checking progress.
  • It provides the basic structure for reporting information.
  • It reveals interdependencies of activities.
  • It facilitates "what if" exercises.
  • It identifies the longest path or critical paths.
  • It allows us to perform scheduling risk analysis.

The above-mentioned benefits apply to all network scheduling techniques, not just PERT.

28.3 Historical Evolution of Networks:

Before going further with the details, let us have an insight into the historical evolution of

networks. PERT was originally developed in 1958 and 1959 to meet the needs of the "age of

massive engineering" where the techniques of Taylor and Gantt were inapplicable. The Special

Projects Office of the U.S. Navy, concerned with performance trends on large military

development programs, introduced PERT on its Polaris Weapon System in 1958, after the

technique had been developed with the aid of the management consulting firm of Booz, Allen,

and Hamilton. Since that time, PERT has spread rapidly throughout almost all industries. At

about the same time the Navy was developing PERT, the DuPont Company initiated a similar

technique known as the Critical Path Method (CPM), which also has spread widely, and is

particularly concentrated in the construction and process industries.

The basic requirements of PERT/time as established by the Navy, in the early 1960s, were as


• All of the individual tasks to complete a given program must be visualized in a manner

clear enough to be put down in a network, which comprises events and activities; that is,

follow the work breakdown structure.

• Events and activities must be sequenced on the network under a highly logical set of ground

rules that allow the determination of important critical and sub-critical paths. Networks can

have up to one hundred or more events, but not less than ten or twenty.

• Time estimates must be made for each activity of the network on a three-way basis.

Optimistic, most likely, and pessimistic elapsed-time figures are estimated by the person(s)

most familiar with the activity involved.

• Critical path and slack times are computed. The critical path is that sequence of activities

and events whose accomplishment will require the greatest expected time.

28.3.1 Advantages of PERT:

1. Firstly, a major advantage of PERT is the kind of planning required to a major

network. Network development and critical path analysis reveal

interdependencies and problem areas that are neither obvious nor well defined

by other planning methods. The technique therefore determines where the

greatest effort should be made for a project to stay on schedule.

2. By using PERT one can determine the probability of meeting specified

deadlines by development of alternative plans. If the decision maker is

statistically sophisticated, he can examine the standard deviations and the

probability of accomplishment data. If there exists a minimum of uncertainty,

one may use the single-time approach, of course, while retaining the advantage

of network analysis.

3. A third advantage is the ability to evaluate the effect of changes in the program.

For example, PERT can evaluate the effect of a contemplated shift of resources


from the less critical activities to the activities identified as probable

bottlenecks. Other resources and performance trade-offs may also be evaluated.

4. PERT can also evaluate the effect of a deviation in the actual time required for

an activity from what had been predicted.

5. Lastly, PERT allows a large amount of sophisticated data to be presented in a

well-organized diagram from which both contractor and customer can make

joint decisions.

Unfortunately, PERT is not without its disadvantages. The complexity of PERT adds to

the implementation problems. There exist more data requirements for a PERT -

organized MCCS reporting system than for most others. PERT, therefore, becomes an

item that is expensive to maintain and is utilized most often on large, complex


Many companies have taken a hard look at the usefulness of PERT on small projects in

recent years. The literature contains many diversified approaches toward applying

PERT to other than large and complex programs. The result has been the PERT/LOB

procedures, which, when applied properly, can do the following job:

  • Cut project costs and reduce time scale
  • Coordinate and expedite planning
  • Eliminate idle time
  • Provide better scheduling and control of subcontractor activities
  • Develop better troubleshooting procedures
  • Cut the time required for routine decisions, but allow more time for decision making

Note that even with these advantages, many companies should ask themselves whether

they actually need PERT. Incorporation of PERT may not be easy, even if canned

software packages are available. One of the biggest problems with incorporating PERT

occurred in the 1960s when the Department of Defense requested that its customers

adopt PERT/cost for relating cost and schedules. This resulted in the expenditure of

considerable cost and effort on behalf of the contractor to overcome the numerous costaccounting

problems. Many contractors eventually went to two sets of books; one set

was for program control (which was in compliance with standard company cost control

procedures), and a second set was created for customer reporting. Therefore, before

accepting a PERT system, management must perform a trade-off study to determine if

the results are worth the cost.

28.3.2 Criticism of PERT:

The criticism that most people discover when using PERT includes:

  • Time and labor intensive effort is required.
  • Upper-level management decision-making ability is reduced.
  • There exists a lack of functional ownership in estimates.
  • There exists a lack of historical data for time–cost estimates.
  • The assumption of unlimited resources may be inappropriate.
  • There may exist the need for too much detail.

28.4 Network Fundamentals and Terminology:

It is important to know that the major discrepancy with Gantt, milestone, or bubble charts is the

inability to show the interdependencies between events and activities. These interdependencies

must be identified so that a master plan can be developed that provides an up-to-date picture of

operations at all times and is easily understood by all.

The interdependencies are shown through the construction of networks. Network analysis can

provide valuable information for planning, integration of plans, time studies, scheduling, and

resource management. The primary purpose of network planning is to eliminate the need for

crisis management by providing a pictorial representation of the total program.

The following management information can be obtained from such a representation:

  • Interdependencies of activities
  • Project completion time
  • Impact of late starts
  • Impact of early starts
  • Trade-offs between resources and time
  • "What if" exercises
  • Cost of a crash program
  • Slippages in planning/performance
  • Evaluation of performance

As we know that networks are composed of events and activities. An event is defined as the

starting or ending point for a group of activities, and an activity is the work required to proceed

from one event or point in time to another. Figure 28.1 below shows the standard nomenclature

for PERT networks. The circles represent events, and arrows represent activities. The numbers

in the circles signify the specific events or accomplishments. The number over the arrow

specifies the time needed (hours, days, months), to go from event 6 to event 3. The events need

not be numbered in any specific order. However, event 6 must take place before event 3 can be

completed (or begin).


Standard PERT Nomenclature


PERT Sources (Burst Points) and Sinks

As depicted in Figure 28.2 (a) above, event 26 must take place prior to events 7, 18, and 31. In

Figure 28.2 (b), the opposite holds true, and events 7, 18, and 31 must take place prior to event

26. Thus, it is similar to "and gates" used in logic diagrams.

However, these charts can be used to develop the PERT network, as shown in Figure 28.3

below. The bar chart in Figure (A) below can be converted to the milestone chart in Figure (B)

below. By then defining the relationship between the events on different bars in the milestone

chart, we can construct the PERT chart in Figure (C) below.

Conversion from Bar Chart to PERT Chart

Basically PERT is a management planning and control tool. It can be considered as a road map

for a particular program or project in which all of the major elements (events) have been

completely identified together with their corresponding interrelations. PERT charts are often

constructed from back to front because, for many projects, the end date is fixed and the

contractor has front-end flexibility.

It is important to note here that one of the purposes of constructing the PERT chart is to

determine how much time is needed to complete the project. PERT, therefore, uses time as a

common denominator to analyze those elements that directly influence the success of the

project, namely, time, cost, and performance. The construction of the network requires two

inputs. First, a selection must be made as to whether the events represent the start or the

completion of an activity. Event completions are generally preferred.

Sequence of Events

The next step is to define the sequence of events, as shown in Table 28.1 above, which relates

each event to its immediate predecessor. Large projects can easily be converted into PERT

networks once the following questions are answered:

  • What job immediately precedes this job?
  • What job immediately follows this job?
  • What jobs can be run concurrently?

A typical PERT network is shown in the following figure 28.4.

Simplified PERT Network

The bold line represents the critical path, which is established by the longest time span through

the total system of events. The critical path is composed of events 1–2–3–5–6–7–8–9. The

critical path is vital for successful control of the project because it tells management two things:

1. Because there is no slack time in any of the events on this path, any slippage will cause

a corresponding slippage in the end date of the program unless this slippage can be

recovered during any of the downstream events (on the critical path).


2. Because the events on this path are the most critical for the success of the project,

management must take a hard look at these events in order to improve the total


Therefore, by using PERT we can now identify the earliest possible dates on which we can

expect an event to occur, or an activity to start or end. There is nothing overly mysterious about

this type of calculation, but without a network analysis the information might be hard to obtain.

PERT charts can be managed from either the events or the activities. For levels 1–3 of the Work

Breakdown Structure (WBS), the project manager's prime concerns are the milestones, and

therefore, the events are of prime importance. For levels 4–6 of the Work Breakdown Structure

(WBS), the project manager's concerns are the activities.

28.5 Differences Between PERT and CPM:

Note that the principles that we have discussed so far apply not only to PERT, but to CPM as

well. The nomenclature is the same for both, and both techniques are often referred to as arrow

diagramming methods, or activity-on-arrow networks. The differences between PERT and CPM

are as follows:

• PERT uses three time estimates (optimistic, most likely, and pessimistic). From these

estimates, an expected time can be derived. CPM uses one time estimate that represents the

normal time (that is, better estimate accuracy with CPM).

• PERT is probabilistic in nature, based on a beta distribution for each activity time and a

normal distribution for expected time duration. This allows us to calculate the "risk" in

completing a project. CPM is based on a single time estimate and is deterministic in nature.

• Both PERT and CPM permit the use of dummy activities in order to develop the logic.

• PERT is used for Research and Development projects where the risks in calculating time

durations have a high variability. CPM is used for construction projects that are resource

dependent and based on accurate time estimates.

• PERT is used on those projects, such as Research and Development, where percent

complete is almost impossible to determine except at completed milestones. CPM is used

for those projects, such as construction, where percent complete can be determined with

reasonable accuracy and customer billing can be accomplished based on percent complete.

28.6 Graphical Evaluation And Review Technique (GERT):

Graphical Evaluation and Review Techniques (GERT) are similar to PERT but have the distinct

advantages of allowing for looping, branching, and multiple project end results. With PERT one

cannot easily show that if a test fails, we may have to repeat the test several more times. With

PERT, we cannot show that, based upon the results of a test, we can select one of several

different branches to continue the project. These problems are easily overcome using GERT.

28.7 Dependencies or Interrelationships:

There are three basic types of interrelationships or dependencies:

1. Mandatory Dependencies (i.e., Hard Logic):

These are dependencies that cannot change, such as erecting the walls of a house before

putting up the roof.

2. Discretionary Dependencies (i.e., Soft Logic):

These are dependencies that may be at the discretion of the project manager or may

simply change from project to project. As an example, one does not need to complete

the entire bill of materials prior to beginning procurement.


3. External Dependencies:

These are dependencies that may be beyond the control of the project manager such as

having contractors sit on your critical path.

28.7.1 Dummy Activities:

It is sometimes impossible to draw network dependencies without including dummy

activities. Dummy activities are artificial activities, represented by a dotted line, and do

not consume resources or require time. They are added into the network simply to

complete the logic.

In the Figure 28.5 below, the dummy activity is required to show that D is preceded by

A and B.

28.8 Slack Time:

It is essential to know that since there exists only one path through the network that is the

longest, the other paths must be either equal in length to or shorter than that path. Therefore,

there must exist events and activities that can be completed before the time when they are

actually needed. The time differential between the scheduled completion date and the required

date to meet critical path is referred to as the slack time. In Figure 28.4, event 4 is not on the

crucial path. To go from event 2 to event 5 on the critical path requires seven weeks taking the

route 2–3–5. If route 2–4–5 is taken, only four weeks are required. Therefore, event 4, which

requires two weeks for completion, should begin anywhere from zero to three weeks after event

2 is complete. During these three weeks, management might find another use for the resources

of people, money, equipment, and facilities required to complete event 4.

Therefore, the critical path is vital for resource scheduling and allocation because the project

manager, with coordination from the functional manager, can reschedule those events not on the

critical path for accomplishment during other time periods when maximum utilization of

resources can be achieved, provided that the critical path time is not extended. This type of

rescheduling through the use of slack times provides for a better balance of resources

throughout the company, and may possibly reduce project costs by eliminating idle or waiting


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