UNIT III

PROJECT MANAGEMENT BY METHODS OF

CRITICAL PATH
RESEARCH OF
OPERATIONS II
 MODULE 3

PROJECT MANAGEMENT BY CRITICAL PATH METHODS

Introduction:
Generally, projects consist of a certain number of interrelated tasks that can
or not to be carried out simultaneously. The order of precedence that exists between the
distintas tareas. Cada tarea requiere de un tiempo dado para concluirse y las tareas pueden
require scarce resources.
Different CPM techniques are developed: (Critical Path Method): Critical Path Method,
used to manage projects where the time required to complete individual tasks
are known with relative certainty. This method also introduces a relationship between the cost
of the activities and their duration. PERT: (Program Evaluation and Review Technique): Technique
of Evaluation and Review of Programs, a method used to manage projects in which the
the times required to complete individual tasks are uncertain.

Project Management
PERT / CPM

Project management belongs to network models and specifically to the

network programming techniques. Any network model is considered as a
special case of the linear programming model. Network programming models
They include PERT/CPM techniques.

The PERT/CPM techniques have the following characteristics:

Great applicability to real problems.

Visual interpretation.
Possibility of using some software to solve them (Microsoft Project,
WinQSB, Storm, etc.

In general, PERT/CPM techniques are used in project management to

plan, program, control and evaluate projects, especially complex ones.

A project is any work that requires a set of activities (tasks)

related operations to achieve a specific and temporary objective
subject to the specific specifications of the project development and quality, as well as to
time and cost constraints. In any project, the organization of activities
due to its sequence of execution, it is essential to minimize the duration and cost of
same.
 CPM - Critical PathMethod
Method del Camin o Critical

It was developed in 1957 in the United States of America, by a research center.

of Operations for Dupont and Remington Rand, seeking control and the
optimization of operating costs through proper planning of activities
project components.
 Concept s:
Activity: task, work that must be done with a specific purpose; that utilizes resources
and time

Event: moment that indicates the beginning or end of an activity

Critical Activities: are those that determine (in combination, with respect to their precedences)
the total duration of the project. Any delay/advance in its start/completion will affect
directly to the total completion of the project

Tolerance: indicates the maximum time for which an activity can be delayed in its start and/or
completion and will not affect the total completion of the project.

Early Start: time closer to the start of the project, to kick off the development of the
analyzed activity

Late Start: time farther from the project's start to begin the development of the
analyzed activity

Early Completion: the time closest to the start of the project, to complete the development
from the analyzed activity

Late Completion: the furthest time from the start of the project to complete the development of the
analyzed activity

Normal Duration: total time for the complete execution of the activities,
project components, without delays, and calculated with normal times

Normal cost: cost incurred in the completion of the project in its normal time

APPLICATION CASE STUDY

Before being able to introduce a new product to the market, all must be performed
activities shown in the table (all times are in weeks).
Note: Accelerated Cost/Time is the same as Urgent Cost/Time

You are asked to determine:

the duration and the normal cost of the activity,

the critical activities and interpret the slack time,
Progress of the activities development at 8 weeks
In addition, determine which activities should be accelerated and
how much to complete the project in a maximum time of 14
weeks incurring a minimum cost.

Since the resolution has a strong graphic component, let's familiarize ourselves with the
symbols that will be used:

Activity Precedence Relationship A precedes C

 Graphic of la RED
Activity Predecessor

A -

B -

C A

D B

E B

F C, D, E

G C, D

H F, G

I F

Time
Actividad Predecesora
expected

A - 3

B - 5

C A 4

D B 3

E B 1

F C, D, E 4

G C, D 2

H F, G 2

I F 3
RULE:

a) Activities that do not have precedence (case of A and B) start at zero (left
superior), at this time the duration of it accumulates (upper right)
b) The precedence activities (case C, and others) begin with the time of
completion of the previous activity (case C that starts in 3, completion time
from A).
c) When more than two times arrive at an activity due to having more than one activity
previous; the time with which it starts is the largest among all (case G that he
6 from E and 7 from C arrive, starts at 7).
d) Upon reaching the last activity/activities, the reverse process begins. They are located in this/those.
activity/activities the longest duration, among the possible endings (in this case, between 14 and 15)
we opt for 15) at the bottom right, and we start to subtract the value of the
analyzed activity (placed in the bottom left)
e) When two or more times arrive, from left to right, one opts for the
lesser (in the case of activity C that receives 8 from activity F and 10 from activity G, it
opt for the least:
8)
 Start Completion
Early Early

Start Completion
Late Late

Slack = Late Start - Early Start o

Late Completion - Early Completion

Critical Activity (Float = 0)

 Critical Activities: B+D+F+I= 15 weeks

Activity Normal Cost

a) The normal duration = 15 weeks
A 6,000
b) The normal total cost (sum of the normal cost of each
B 5,000 activity) = -See table-

C 16,000 c) Critical Activities = B + D + F + I

D 18,000 d) Progress of activities at 7 weeks

E 20,000 Completed Activities: A and B Activities

in process: C, D and E
F 16,000
Actividades aún no iniciadas: F, G, H e I
G 2.000
e) Activity to expedite and additional cost for delivery in
H 6.000 week 14 (analysis of critical activities)

I 9,000

TOTAL 98,000
 Analysis of critical activities
Activity B = Accelerated Cost - Normal Cost = 7.000–5.000 = 500$
Normal Time - Accelerated Time 5-1 week

Activity D = 26,000 - 18,000 = 8,000$

3–2 week

Activity F = 18.000–16.000 = 1,000$ Selected by

4–2 week lower additional cost

Activity I = 12,000 - 9,000 = 3,000$

3-2 week

Total cost for delivery in week 14 = 98,000 + 500 = 98,500$

USE OF POM FOR WINDOWS

Module: PERT/CPM
Analytical Report

The table shows that shortening the project to 14 days would generate an additional cost.
$500.
 Project Evaluation& Review Techniq ue PERT
Técniof Review ión y EvalProject Situation

PERT is a probabilistic technique used in projects where there is uncertainty in the

duration of activities, where there are no time studies or historical data and it is
evident the variation that can occur in the duration of activities.

The PERT method was developed by the United States Navy in 1957.
to control the execution times of the various activities that make up
space projects, due to the need to complete each of them within the
available time intervals. It was originally used for time control of the
Project Polaris is currently used throughout the space program.

Due to these possible variations in the timings of the activities, the PERT works with a
expected time of the activity. It is based on the Beta probability distribution.
which calculates the expected time (TE) of the activity and its standard deviation () with the
following formulas:

Expected Time: Te = o + 4m + p
6

Standard Deviation: =p –o
6

Where: o = optimistic, ideal or urgent time (more favorable conditions)

m = most probable time
p = pessimistic time (least favorable conditions)

PRACTICE CASE OF APPLICATION

ON

A company has received an order from an important client for the manufacture of a
nuevo producto. La duración y el costo total de este proyecto de fabricación es desconocido
by the general director, who has to decide in a week whether to accept the new order or not

The general management asked the area managers for a plan to analyze the feasibility of
to accept or not the proposal, so he decides to keep the delivery date a secret that
is requiring the client, this way, I believe to have a more accurate response.

After three days of analysis, the department managers presented to the director.
Provide the following time and cost data for the project activities as follows
show in table 1:
 Time Time Time Cost Cost
Activity More optimistic Normal Pessimist Urgency
Activity Posterior (weeks) Probable (semanas) (miles $) (miles $)
(weeks)
A. Study of D 3.0 3.5 4.5 8 10
components of the
product
B. Localization of the E, H 4.0 5.0 6.0 15 20
suppliers
C. Product Design F 3.5 4.5 6.0 25 32.5
D. Evaluation of the G 2.0 2.2 3.5 4 6
suppliers
E. Localization and G 3.0 3.5 4.5 6 7.5
evaluation of maquiladoras
F. Laboratory Tests I 8.0 9.0 12.5 45 60
of the prototype
G. Selección de trabajos - 7.5 8.5 11.5 35 50
subcontracted
H. Specifications I 6.0 7.5 12.0 30 40
end of the prototype
I. Manufacturing and delivery
- 7.5 9.0 12.5 35 42.5
from the order

You are asked to determine:

1) What is the network for the normal project?
2) What is the duration, cost, and critical activities for
the normal project.
3) What is the probability of completing the project by:
26 weeks.
b. 22 weeks.

RESOLUTION
ON

Step 1: calculation of the Expected Time (Te) for each activity:

Example: Activity A Te: Te = 3.0 + (4) 3.54m + 4.5 = 3.583

6
Time Time Time Time
Activity Optimistic more Expected Pessimist
(weeks) Likely (weeks) (You)
(weeks)
A. Study of components of 3.0 3.5 4.5 3,583
product
B. Localization of suppliers 4.0 5.0 6.0 5,000
C. Product design 3.5 4.5 6.0 4,583
D. Supplier Evaluation 2.0 2.2 3.5 2,383
E. Localization and evaluation 3.0 3.5 4.5 3,583
maquiladoras
F. Laboratory tests of 8.0 9.0 12.5 9,416
prototype

G. Job selection 7.5 8.5 11.5 8,833

subcontracted
H. Final specifications of the 6.0 7.5 12.0 8,000
prototype
I. Manufacturing and delivery of the order 7.5 9.0 12.5 9,333

Step 2: Build the Project Network (Graph)

Precedence Activity

A.
B.
C.
D. A
E. B
F. C
G. D,E
H. B
I. F;H

Step 3: Perform the Analysis with Expected Time

ANSWERS

1) What is the network for the normal project? (see previous chart)
2) Cual es la duración, el costo y las actividades críticas para el proyecto normal.
2.a Normal Duration: 23.33
 2.b Normal cost: $ 203
2.c Critical Activities: C + F + I
3) What is the probability of completing the project in:
a. 26 weeks. (use POM)
b. 22 weeks. (use POM)

Analytical Result
PROBABILITY OF COMPLETING THE PROJECT IN 22 WEEKS:

Result: 0.1325 or 13.25% is the probability of concluding in 22 weeks; based on the concept of
normal distribution.
 PROBABILITY OF COMPLETING THE PROJECT IN 26 WEEKS:

Result: 0.9871 or 98.71% is the probability of completing in 26 weeks; based on the concept of
normal distribution.

PRACTICAL CASES

CASE 01: The American University is considering building a sports complex for
la práctica del Atletismo. El complejo proveerá un gimnasio para preparación física, un
space for offices, classrooms for the Sports degree and all services
necessary within it. The activities that must be developed before its
construction is shown below:

Activity Descripción PRECEDENCE DURATION

(weeks)
A Site study for construction 6
B Development of the initial design 8
C Obtain approval from the instances A,B 12
superiors
D Seleccionar al arquitecto C 4
E Establish the Budget C 6
F Complete the design D,E 15
G Obtain Financing E 12
H Hire the builder F,G 8

You are asked to determine: a) Deadline for the completion of this stage

b) Identify which are the critical activities

CASE 02: The following network represents a project composed of activities whose
characteristics are presented in the following table:

C
2 5 I
A
G
D 7
1 4
B H J
E
3 6
F

Normal Accelerated

Duration
Activity Duration Cost
n Cost
day [$]
day

A 4 200 4 200

B 7 500 6 650

C 3 400 2 450

D 5 400 3 600

E 4 200 4 200

F 6 300 4 700

G 8 600 5 900

H 9 700 8 900

I 3 300 3 300

J 6 500 6 500

a. Determine the critical path, the duration, and the total cost of the project, considering the
normal duration of activities.
b. Determine the cost and the activities to encourage with resources to complete the
project in: 20 days, within 26 days and after 28 days from the start date.
c. Progress of activities at: 10, 15, and 17 days after the project started
What would be the minimum duration and cost in which you would commit to finish the
Project? What would the critical path be?

CASE 03: Before being able to introduce a new product to the market, all must be carried out
the activities shown in the table (all times are in weeks).

Activity Description Predecessors a b m

A Product design - 2 10 6
B Market study - 4 6 5
C Issue material orders A 2 4 3
D Receive materials C 1 3 2
E Build prototype A, D 1 5 3
F Development and promotion B 3 5 4
Commissioning plant for
G E 2 6 4
mass production
Distribute products a
H G, F 0 4 2
warehouses.

Draw the project network and determine the critical path. Interpret your results. What is the
What is the probability that the product will be on the market for its normal duration?

CASE 04: The following schedule of activities is given:

Activity Predecessor a m b
A - 2 6 10
B - 4 5 6
C A 2 3 4
D C 1 2 3
E A, D 1 3 5
F B 3 4 5
G E 2 4 6
H F, G 0 2 4

Determine the minimum duration of the project, the critical path, and interpret the slack time.
carry out a program to determine the minimum duration of the project. Finally, assume
that today is July 15 and the project begins, determine the probability that the project
be ready by December 18.
CASE 05: The following schedule of activities is as follows:

Activity Time Time Cost

Predecessor Variance Cost
d expected accelerated accelerated

A - 3 2 0.3 6000 8000

B - 5 1 0.5 5000 7000

C A 4 2 2 16000 25000

D B 3 2 1 18000 26000

E B 1 1 0.2 20000 20000

F C, D, E 4 2 0.4 16000 18000

G C, D F, 2 1 0.1 2000 4000

H G 2 1 1 6000 10000

I F 3 2 0.6 9000 12000

Determine the minimum duration of the project, the critical path, and interpret the slack time.
create a program to determine the minimum duration of the project. Also consider the
new accelerated times and the respective costs.

CASE 06: The following schedule of activities is given:

Activity Predecessor Hope Variance Budget

A - 3 0.3 6000

B A 2 0.5 4000

C - 8 2.0 16000

D B, C 6 1.0 18000

E C 4 0.2 20000

F D, E 5 0.4 15000

G D, E 1 0.1 2000

H F 5 1.0 5000

I G 6 0.6 12000
Determine the minimum duration of the project, the critical path, and interpret the slack time.
Create a linear programming model that allows to determine the minimum duration of
project.

CASE 07: The following schedule of activities is provided:

Code of Days Immediate tasks

Name of the activity
activity required precedents

A Disconnect and move 0.2 -

B Connect to the power and perform a test 0.2 A

C Remove the electrical units 0.2 B

D Clean the machine 0.3 C

E Remove and disassemble the mechanical units 0.2 C

F Clean the machine parts 0.4 D

G Sort a list of the pieces 0.5 F

H mechanics Sort the pieces of the 0.5 G

I machine 1.0 H

J Recibir las piezas de la 25.0 I

K machine to paint the cursors 1.5 G

Crossed Machining the parts

L 1.0 K
Inspect and organize a list of the parts
M electric 1.0 L

N Paint the engine 0.8 P, Q, R

O Assemble the engine 2.5 H

P Machine the bank 2.0 V

Q Machining the 2.0 L

R cursors Machine the 2.0 M

S table Paint the 1.0 N

T machine Clean the 1.0 G

 U Clean the benches 0.5 E

V Machine the jaws 2.0 K

W Install the axle 1.0 J, O, T

X Assemble the pieces 1.0 J, S

YZ Clean the jaws 0.5 U

AA Assemble the head 1.0 J, O, T

AB Install the engine and the electrical parts 0.3 Y

AC Assemble the engines 0.4 J, O, T

AD Connect to the power and test 0.5 AA, AB, Z, W, X

Touch up, move, reinstall 0.3 AC

Assume you are on day 29 and the current situation being recorded is:

U I T N S J O Y
Activity
Finished 100 100 100 100 30 80 70 10

Determine when the project will be completed and what the critical activities are that
they remain.
What is the probability of finishing before 10 days? And before 29 days?
Formulate a linear programming model that determines how much of the project remains and
the critical path.

CASE 08: A certain company presents the following schedule of activities in the implementation
of a project. The details of the activities and their respective activities are provided.
predecessors, the pessimistic, optimistic, and most likely times in weeks and the cost
normal for each activity associated with each normal time. In addition, the percentage is provided.
In what ways can the normal time for each activity and the respective cost be reduced?
 Cost % in what is Cost
Predecessor Activity a m b
normal decrease accelerated

A - 8 12 16 800 20 960

B - 6 8 10 600 50 900

C A 7 10 13 200 30 340

D B 15 20 25 600 10 660

E B 1 4 7 500 0 500

F E 2 5 8 300 60 480

G C, D 6 10 14 1.000 10 1.100

H C, D 10 12 14 1.000 30 1,300

I G 5 6 7 500 15 650

J H 2 4 6 650 20 780

K I 4 9 14 200 50 300

L I 2 4 6 800 35 1.080

M J, K 2 3 4 600 10 660

Based on the previous data, the following is requested:

a) Draw the network associated with the project.

b) Considering the normal duration time of each activity, determine the critical path and
the minimum duration of the project. In case there is more than one critical path, determine
Which one would you recommend and why?
c) Formulate a linear programming model that allows minimizing the duration time
of the project, considering the normal time for each activity.
d) Consider that each activity can be carried out at any time within its
normal duration and its accelerated duration. Formulate a programming model that
allow to determine the activities that need to be accelerated to complete the project
in a maximum of 45 weeks incurring a minimum cost.
e) Suppose you are in week 52 and activities F, I, and J are 50% complete.
of its time to finish (which means that the previous activities have already been
(finished). What is the probability of completing the project before 4 weeks?

References:
Bernardo Latorre (2015) Network Analysis Module. Operations Research.
American University in partnership with Ilumno.
Sara Rodas (2017). Additional materials developed in the POM Program for
WINDOWS. American University.