EDP (LECTURE 7)

                                                        MARWARI COLLEGE,RANCHI

                                              (UNDER RANCHI UNIVERSITY RANCHI)

NAME : RAJU MANJHI,PRAKASH KUMAR 

SUB: EDP

SEM : IT /CA/BCM VI
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PERT /CPM

PERT - Program evaluation and review technique

Its a method of minimizing production delays, interruption and conflicts of co-coordinating and synchronizing various parts of overall jobs and of expecting the completion of projects. It’s a method of scheduling and budgeting resources so as to accomplish a pre determined job on schedule. It’s a communication facility in that it can repeat development and keep the managers or doers in form.

PERT is concerned with two concepts

1)                   Events - An event is a specific accomplishment that occurs at a recognizable point of time

2)                   Activities - An activity is the work required to complete a specific event.

In PERT the activities not the events require time, money and resources. In the sense Cantt was quiet right in referring events as milestones. A event in PERT is accomplishment occurring at instantaneous point of time but require no time or resources itself. Activities are recognizable part of our project that requires time, money and resources for completion.

STEPS IN PERT

1)          The first step in the development of PERT network is the establishment of objective to be accomplished linked by supportive objective. When these are identified they must be linked together so as to enable the planners to see the project in its time perspective and also see the relationships between and among all the steps.

2)          The second step is to schedule work. Break down in quiet detail.

3)          In third step both technical and managerial persons should begin to work together.

4)          The fourth is that each person who participates in the application of PERT to the control of the project should have some basic familiarity with general nature of the work and with the ultimate objectives desired.

Some authors have indicated the following steps involved in the PERT analysis.

1)          Development of project network

2)          Time estimation

3)          Determination of critical path, events stacks and activity floats

4)          Development of project schedule

5)          Calculation of variability of project duration and the probability of completion in a given time

PERT deals with the problem of uncertain activity time by the application of statistical analysis to the determination of estimated time for each activity of the project. This technique as a manager’s tool defines and co-ordinates what must be done to successfully accomplish the objectives of a project on time. It aids the decision maker but does not make decisions for him.

In PERT time is the basic measure. It is usually expressed in calendar week. The project should be completed within the stipulated optimistic time in order to arrive at the most reliable estimates of time. There are usually three time estimates applied under PERT technique, which are as follows -

1)    Optimistic time - Shortest time possible. If everything goes perfectly with no complication the chance of this optimum actually occurring might be 1 in a 100

2)    Pessimistic time - It is the longest time considerable. It includes time for unusual delay and thus the chance of its happening might be 1 in a 100

3)    Most likely time - It would be the best estimate of what normally would occur.

The difference in these 3 times gives a measure of the relative uncertainty involved in the activity.

ADVANTAGES OF PERT

1)    This technique gives the management the ability to plan the best possible use of resources to achieve a given goal within the overall time and cost limitation.

2)    it helps management  to handle uncertainties involved in programs where no standard time data are available

3)    it forces for the right action at the right point and at the right time in the organization.

LIMITATIONS OF PERT

1)    The basic difficulty comes in the way of time estimates for the completion of activities for activities are of non-repetitive type

2)    This technique does not consider the resources required at various stages of project.

3)    The last in the use of this technique for active control of a project requires frequent updating and revising the PERT calculations and this proves quite a costly affair.

CPM Critical Path Method:.

Next to PERT the CPM of planning and controlling of projects has enforced the widest use among all the system that follows the networking principles. The CPM was developed in the year in 1956 at a company in USA in connection with the periodic overhauling and maintenance of a chemical plant. It resulted in reducing the shut down period from 130 hrs to 90 hrs and saved the company 1 million dollars. CPM uses 2 time-cost estimates for each activity. One time-cost estimate is for the normal situation and the other is for the crash situation. But, does not incorporate any statistical analysis in determining in such time estimates. CPM operates on the assumption that there is a precise known time that each activity in the project will take.

ADVANTAGES OF CPM

This technique is employed to schedule and control projects. Its applicable to both small and large projects. Advantages of this technique are as follows:

i)       It helps in ascertaining the time schedule

ii)     With its aid control by management is made easy

iii)   It makes better and detailed planning possible

iv)   It provides a standard method for communicating project plans of schedule and cost performance

v)     It identifies the most critical elements and thus more attention can be paid to these activities.

LIMITATION OF CPM

i)       CPM fails to incorporate statistical analysis in determining the time estimates

ii)     It operates on the assumption that there is a precise known time that each activity in the project will take. But, this may not be true in actual time.

iii)   Its difficult to use CPM as a controlling device for the simple reason that one must repeat the entire evaluation of the project each time when changes are introduced into the networking. It may be remembered that CPM was initially developed as static planning model and not as a dynamic controlling device.