Assignment

Of

Operational management

(PERT and CPM)

School of Management Studies

Punjabi University Patiala

Submitted to: Submitted by:

Dr.SandeepVirdi Jeevanjot Singh (6026) Manraj Singh (6027)

AmitGulati (6028)

Index

Project Management

Techniques of Project management

PERT

Advantages and disadvantages of PERT

CPM

CPM with forward and backward pass method

Total Float

Conclusion

What is Project Management?

Project management is the science (and art) of organizing the components of a project, whether the project is development of a new product, the launch of a new service, a marketing campaign, or a wedding. A project isn’t something that’s part of normal business operations. It’s typically created once, it’s temporary, and it’s specific. As one expert notes, “It has a beginning and an end.” A project consumes resources (whether people, cash, materials, or time), and it has funding limits.Project Management BasicsNo matter what the type of project, project management typically follows the same pattern:

1. Definition2. Planning3. Execution4. Control5. Closure

Defining the ProjectIn this stage the project manager defines what the project is and what the users hope to achieve by undertaking the project. This phase also includes a list of project deliverables, the outcome of a specific set of activities. The project manager works with the business sponsor or manager who wants to have the project implemented and other stakeholders — those who have a vested interest in the outcome of the project.

Planning the ProjectDefine all project activities. In this stage, the project manager lists all activities or tasks, how the tasks are related, how long each task will take, and how each tasks is tied to a specific deadline. This phase also allows the project manager to define relationships between tasks, so that, for example, if one task is x number of days late, the project tasks related to it will also reflect a comparable delay. Likewise, the project manager can set milestones, dates by which important aspects of the project need to be met.

Define requirements for completing the project. In this stage, the project manager identifies how many people (often referred to as “resources”) and how much expense (“cost”) is involved in the project, as well as any other requirements that are necessary for completing the project. The project manager will also need to manage assumptions and risks related to the project. The project manager will also want to identify project constraints. Constraints typically relate to schedule, resources, budget, and scope. A change in one constraint will typically affect the other constraints. For example, a budget constraint may affect the number of people who can work on the project, thereby imposing a resource constraint. Likewise, if additional features are added as part of project scope, that could affect scheduling, resources, and budget.

Executing the ProjectBuild the project team. In this phase, the project manager knows how many resources and how much budget he or she has to work with for the project. The project manager then assigns those resources and allocates budget to various tasks in the project. Now the work of the project begins.

Controlling the ProjectThe project manager is in charge of updating the project plans to reflect actual time elapsed for each task. By keeping up with the details of progress, the project manager is able to understand how well the project is progressing overall. A product such as Microsoft Project facilitates the administrative aspects of project management.Closure of the ProjectIn this stage, the project manager and business owner pull together the project team and those who have an interest in the outcome of the project (stakeholders) to analyze the final outcome of the project.

Time, Money, ScopeFrequently, people refer to project management as having three components: time, money, and scope. Reducing or increasing any one of the three will probably have an impact on the other two. If a company reduces the amount of time it can spend on a project, that will affect the scope (what can be included in the project) as well as the cost (since additional people or resources may be required to meet the abbreviated schedule).

Project Portfolio ManagementRecent trends in project management include project portfolio management (PPM). PPM is a move by organizations to get control over numerous projects by evaluating how well each project aligns with strategic goals and quantifying its value. An organization will typically be working on multiple projects, each resulting in potentially differing amounts of return or value. The company or agency may decide to eliminate those projects with a lower return in order to dedicate greater resources to the remaining projects or in order to preserve the projects with the highest return or value.

Techniques used in Project management

PERT (Project evaluating and review technique)

PERT is a probabilistic method used in project management to estimate time required to complete the project.

DEFINITION OF TERMS IN A NETWORK

• Activity: any portions of project (tasks) which required by project, uses up resource and consumes time – may involve labor, paper work, contractual negotiations, machinery operations Activity on Arrow (AOA) showed as arrow, AON – Activity on Node

• Event :beginning or ending points of one or more activities, instantaneous point in time, also called ‘nodes’

• Network: Combination of all project activities and the events

Activity

Event

Dummy activity: An imaginary activity with no duration, used to show either an indirect relationship between 2 tasks or to clarify the identities of the tasks.

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PERT CPM

Dummy Activity

Rules for drawing network

1. Each activity is to be represented by one arrow and one node.

2. Time flows from left to right.

3. Arrows have to be kept straight ,they should not be bend or curved.

4. Crossing of arrows is not allowed

5. No dangling or looping is allowed

6. Events having no preceding event should be numbered or labeled as one.

7. Numbering is done from left to right and from top to bottom.

8. The last event bears the highest number.

9. No event number and activity number should be repeated.

Terms used in PERT

1. Optimistic time estimate is denoted by (to).

It is the least time taken by an activity if everything goes according to schedule.

2. Pessimistic time estimate is denoted by (Tp)

The maximum possible time taken by an activity if everything goes against scheduled.

3. Most likely time is denoted by (Tm)

It is normal time taken by an activity when it is executed under normal conditions.

From these three we estimate or calculate expected time.

Estimate time is denoted by Te.

te=to+4tm+tp

6

Standard Deviation(σ)= tp-to

Advantages and disadvantages of PERT

PERT offers a project manager many benefits in planning for projects. The following are the advantages of PERT:

1. It provides a graphical display of project activities that helps the users understand the relationships among the activities.

2. It is the ideal technique for tactical level planning and operational level control of projects.

3. It is effective in planning single project activities in any type of industry.

4. It allows project managers to do 'what if' analysis on project activities.   

Though PERT offers many advantages, it has many inherent disadvantages. The disadvantages that limit the use of PERT are:

1. It cannot effectively handle situations in which two or more projects share available resources.

2. It fails when there is a change in the precedence and sequential relationships of project activities.

3. It requires a lot of information as input to generate an effective plan. This may prove too expensive.

CPM (Critical path method)

A Critical Path Method is a project management tool used to formulate a time frame for a project in order to determine where potential delays are most likely to occur. The process includes a step-by-step process that provides the developer with a visual representation of potential bottlenecks throughout the course of the project.

The CPM was originally designed in the 1950's as a method of organizing and tracking the numerous activities regarding the Polaris missile defense program. However, a CPM is useful with many projects and makes the planning process easier.

By Completing a CPM the following will be found:

1. The total time to complete the project.2. The scheduled start and finish dates for each task pertaining to the project’s completion.3. The tasks that are “critical” to the project and must be completed exactly as scheduled.

The “slack” time available in non-critical tasks, as well as how long they can be delayed before they affect the project finish date.

Steps under CPMSpecify the Individual activitiesDetermine the sequence of activitiesEstimate the completion time for each activity Identify critical path (longest path in network)Update CPM diagram as the project progress

Key Steps in Critical Path Method

Let's have a look at how critical path method is used in practice. The process of using critical path method in project planning phase has six steps.

Step 1: Activity specification

You can use the Work Breakdown Structure (WBS) to identify the activities involved in the project. This is the main input for the critical path method.

In activity specification, only the higher-level activities are selected for critical path method.

When detailed activities are used, the critical path method may become too complex to manage and maintain.

Step 2: Activity sequence establishment

In this step, the correct activity sequence is established. For that, you need to ask three questions for each task of your list.

Which tasks should take place before this task happens. Which tasks should be completed at the same time as this task. Which tasks should happen immediately after this task.

Step 3: Network diagram

Once the activity sequence is correctly identified, the network diagram can be drawn (refer to the sample diagram above).

Although the early diagrams were drawn on paper, there is a number of computer software, such as Primavera, for this purpose nowadays.

Step 4: Estimates for each activity

This could be a direct input from the WBS based estimation sheet. Most of the companies use 3-point estimation method or COCOMO based (function points based) estimation methods for tasks estimation.

You can use such estimation information for this step of the process.

Step 5: Identification of the critical path

For this, you need to determine four parameters of each activity of the network.

Earliest start time (ES)

Earliest finish time (EF) Latest finish time (LF) Latest start time (LS)

Forward pass:

Earliest start time(EST) Earliest start time at which an activity can start given that its precedent activities must be completed

Rule:

Initial event is supposed to occur at time equal to zero E1=0

Any activity can start immediately when all preceding activities are completed

Earliest finish time (EFT):

EFT=LFT-te

Backward Pass

Latest Start Time (LS)

Latest time an activity can start without delaying critical path time

LST= EST+te

Latest finish time (LF)

latest time an activity can be completed without delaying critical path time

For ending event LFT is assumed to be equal to EST

For another activities LFT-te of activity in backward direction

Minimum value of LFT should be taken in case of tie.

The float time for an activity is the time between the earliest (ES) and the latest (LS) start time or between the earliest (EF) and latest (LF) finish times.

During the float time, an activity can be delayed without delaying the project finish date.

The critical path is the longest path of the network diagram. The activities in the critical path have an effect on the deadline of the project. If an activity of this path is delayed, the project will be delayed.

In case if the project management needs to accelerate the project, the times for critical path activities should be reduced.

Step 6: Critical path diagram to show project progresses

Critical path diagram is a live artefact. Therefore, this diagram should be updated with actual values once the task is completed.

This gives more realistic figure for the deadline and the project management can know whether they are on track regarding the deliverables.

Forward base step is taken to calculate EST

Rule for calculating EST by Forward base method

EST for initial activity should be taken as 0

Then time duration is added to preceding activity to calculate EST for other activity

That value of EST should be taken which is Largest

Backward method is used to calculate LFT

CPM shown on Double line

Total float:

Maximum possible time by which an activity can delay without affecting the total completion time of project

Free float :

Time by which an activity may be delayed without delaying the start of any succeeding activity

Free float =Total Float –Slack of head event

Independent float :

Portion of total float with in which an activity can be delayed without affecting float of preceding activity

Independent float =Free float –slack of tail event