Alternative Pertcpm Models

Because of the many advantages of PERT/time, numerous industries have found applications for this form of network. A partial list of these advantages includes capabilities for:

• Trade-off studies for resource control

• Providing contingency planning in the early stages of the project

• Visually tracking up-to-date performance

• Demonstrating integrated planning

• Providing visibility down through the lowest levels of the work breakdown structure

• Providing a regimented structure for control purposes to ensure compliance with the work breakdown structure and the statement of work

• Increasing functional members' ability to relate to the total program, thus providing participants with a sense of belonging

Even with these advantages, in many situations PERT/time has proved ineffective in controlling resources. In the beginning of this chapter we defined three parameters necessary for the control of resources: time, cost, and performance. With these factors in mind, companies began reconstructing PERT/time into PERT/cost and PERT/performance models.

PERT/cost is an extension of PERT/time and attempts to overcome the problems associated with the use of the most optimistic and most pessimistic time for estimating completion. PERT/cost can be regarded as a cost accounting network model based on the work breakdown structure and capable of being subdivided down to the lowest elements, or work packages. The advantages of PERT/cost are that it:

• Contains all the features of PERT/time

• Permits cost control at any WBS level

The primary reason for the development of PERT/cost was so that project managers could identify critical schedule slippages and cost overruns in time for corrective action to be taken.

Many attempts have been made to develop effective PERT/schedule models. In almost all cases, the charts are constructed from left to right.11 An example of such current attempts is the accomplishment/cost procedure (ACP). As described by Block:12

ACP reports cost based on schedule accomplishment, rather than on the passage of time. To determine how an uncompleted task is progressing with respect to cost, ACP compares (a) cost/progress relationship budgeting with (b) the cost/progress relationship expended for the task. It utilizes data accumulated from periodic reports and from the same data base generates the following:

• The relationship between cost and scheduled performance

• The accounting relationships between cost and fiscal accounting requirements

• The prediction of corporate cash flow needs

Unfortunately, the development of PERT/schedule techniques is still in its infancy. Although their applications have been identified, many companies feel locked in with their present method of control, whether it be PERT, CPM, or some other technique.

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Project Management Made Easy

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