OM 300 Chapter 3

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What are the steps for using CPM/PERT techniques?

1. Define the project and prepare the work breakdown structure 2. Develop relationships among activities (decide which activities must precede and which must follow) 3. Draw the network connecting all activities 4. Assign duration and/or cost estimate to each activity 5. Compute the longest path through activities with no slack time in the network (called the critical path) 6. Use the network to help plan, schedule, monitor and control the project

What are the advantages of CPM/PERT techniques?

1. Especially useful when scheduling and controlling large projects 2. Straightforward concept and not mathematically complex 3. Graphical networks help highlight relationships among project activities 4. Critical path and slack time analysis help pinpoint activities that need to be closely monitored 5. Project documentation and graphics point out who is responsible for various activities 6. Applicable to a wide variety of projects 7. Useful in monitoring schedules and costs

What are the three primary activities involved in managing a project?

1. Planning goal setting, defining the project, team organization 2. Scheduling relate people, money, and supplies to specific activities and activities to each other 3. Controlling monitor resources, costs, quality, and budgets; revise plans and shift resources to meet time and cost demands

What are the disadvantages of CPM/PERT techniques

1. Project activities clearly defined, independent and stable in their relationships 2. Precedence relationships must be specified and networked together 3. Time estimates tend to be subjective and are subject to fudging my managers 4. There is an inherent danger of too much emphasis being placed on the longest or critical path

What are the responsibilities of a project manager and what types of ethical issues could arise?

1. Responsibilities All necessary activities are finished in order and on time Project comes within budget Project meets quality goals Motivate, direct and inform project personnel 2. Ethical Issues Offers of gifts from contractors Pressure to alter status reports to mask delays False reports for charges of time and expenses Pressure to compromise quality to meet schedules

The crash cost per period

1. is the difference in costs divided by the difference in times (crash and normal) 2. is considered to be linear in the range between normal and crash 3. needs to be determined so that the smallest cost values on the critical path can be considered for time reduction first

What is the main difference between using a Gantt chart versus using the CPM/PERT techniques?

Each use a different estimate of activity durations

Global company profile: Bechtel

International workforce, construction professionals, cooks, medical personnel, security Strategic value of time-based competition Quality mandate for continual improvement

Slack time equals

LS - ES

What is the main difference between CPM and PERT techniques?

PERT employs three time estimates for each activity CPM makes the assumption that activity times are known with certainty and requires only one time factor for each activity

Calculate the probability of project completion

Project Variance = Sum(variances of activities on critical path)

Define and explain the steps associated with project crashing

Step 1: Compute the crash cost per time period. If crash costs are linear over time: (Crash cost - Normal cost) / (Normal time - Crash time) Step 2: Using current activity times, find the critical path and identify the critical activities Step 3: If only one critical path, select the activity on the critical path that (a) can still be crashed, and (b) has the smallest crash cost per period. Compute the crash cost per time period. If there is more than one critical path, the select one activity from each critical path such that (a) each selected activity can still be crashed, and (b) the total crash cost of all select activities is the smallest.

The critical path of a network is the

longest-time path through the network

PERT analysis computes the variance of the total project completion time as

the sum of variances of all activities on the critical path

What is a Gantt chart?

visual devices that show the duration of activities in a project


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