Crash Times

In the preceding sections, no distinction was made between PERT and CPM. The basic difference between PERT and CPM lies in the ability to calculate percent complete. PERT is used in R&D or just development activities, where a percent-complete determination is almost impossible. Therefore, PERT is event oriented rather than activity oriented. In PERT, funding is normally provided for each milestone (i.e., event) achieved because incremental funding along the activity line has to be based on percent complete. CPM, on the other hand, is activity oriented because, in activities such as construction, percent complete along the activity line can be determined. CPM can be used as an arrow diagram network without PERT. The difference between the two methods lies in the environments in which they evolved and how they are applied. According to Archibald and Villoria9:

The environmental factors which had an important role in determining the elements of the

CPM techniques were:

(a) Well-defined projects

(b) One dominant organization

(c) Relatively small uncertainties

(d) One geographical location for a project

The CPM (activity-type network) has been widely used in the process industries, in construction, and in single-project industrial activities. Common problems include no place to store early arrivals of raw materials and project delays for late arrivals.

Using strictly the CPM approach, project managers can consider the cost of speeding up, or crashing, certain phases of a project. In order to accomplish this, it is necessary to calculate a crashing cost per unit time as well as the normal expected time for each activity. CPM charts, which are closely related to PERT charts, allow visual representation of the effects of crashing. There are these requirements:

• For a CPM chart, the emphasis is on activities, not events. Therefore, the PERT chart should be redrawn with each circle representing an activity rather than an event.

• In CPM, both time and cost of each activity are considered.10

• Only those activities on the critical path are considered, starting with the activities for which the crashing cost per unit time is the lowest.

Figure 12-16 shows a CPM network with the corresponding crash time for all activities on and off the critical path. The activities are represented by circles and include an activity identification number and the estimated time. The costs expressed in the figure are usually direct costs only.

9. R. D. Archibald and R. L. Villoria, Network-Based Management Systems (PERT/CPM) (New York: John Wiley, 1967), p. 14.

10. Although PERT considers mainly time, modifications through PERT/cost analysis can be made to consider the cost factors.

Project Management Made Easy

Project Management Made Easy

What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.

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