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COMPARATIVE CHARACTERISTICS OF PERT AND CPM ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
[object Object],NETWORK TECHNIQUES PERT: PROGRAM  EVALUATION AND REVIEW  TECHNIQUE CPM: CRITICAL PATH METHOD GERT: GRAPH  EVALUATION AND REVIEW TECHNIQUE PDM: PRECEDENCE DIAGRAMMING METHOD DCPM: DECISION CRITICAL PATH METHOD
A GANTT MILESTONE CHART JOB A JOB B JOB C  M  T  W  T  F  S  S  M  T  W  T  F  S REVIEW ,[object Object],[object Object],[object Object]
3 1 2 4 6 5 1 2 4 6 5 3 1 2 4 6 5 3 JOB  A JOB  B JOB  C STAGE I STAGE II 1 2 4 6 5 3 2 3 3 1 2 6 5 2 STAGE III TIME TIME JOB  A JOB  B JOB  C TIME
STEPS INVOLVED IN USING THE NETWORK TECHNIQUES ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
ACTIVITY   ACTIVITY   IMMEDIATE IDENTIFICATION   DESCRIPTION   PREDECESSOR{S} a   CUT THE TOP    - b  MAKE THE LEGS     - c  LAMINATION   a d   MAKE THE STAND   b   e   FINAL ASSEMBLY   c,d f    FINAL POLISHING ETC.   e MAKING A DINING TABLE
START a b f e d c FINISH 3 2 5 4 6 e f AN ARROW  DIAGRAM a b c d 1 AON  DIAGRAM
BUDGETING PROJECT – ABC COMPANY ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
4 5 2 3 1 a b c d e
BUDGETING PROJECT – (REVISED) ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Whenever there are two or more jobs which  have some but not all  their predecessors in common, the use of dummy activity/activities will be necessitated. ,[object Object]
3 7 6 5 1 a a' c b D 1 D 2 d e 3 6 5 a a’ b d e c 1 2 2 4 4 D 1
3 a b D 1 e c 2 1 4 2 5 a b d e c 3 1 5 6 D 2 d 3 a b e c 2 1 4 5 D 2 d D 1 D 1 D 2 4
[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
2 6 2 3 1 1 4 5 8 5 4 7 1 1 3 3½ 2 ½ 1½ 0 0 5 7 13½ 8 11 1 ½ 13½ 4 9.½ 9½ 4 7 8 CRITICAL PATH IS  6½ 8½ 6 6 LEGEND/KEY T E T L EV.NO 1  1
EARLIEST EVENT TIME AT AN EVENT IS THE EARLIEST TIME AT WHICH THE WORK ON THE ACITIVITY/ACTIVITIES ORIGINATING FROM THAT EVENT CAN BE  STARTED. ,[object Object]
TOTAL FLOAT IS THE MAXIMUM DURATION BY WHICH A NON-CRITICAL ACTIVITY CAN BE EXTENDED WITHOUT  DELAYING THE PROJECT.  ,[object Object]
[object Object],FREE FLOAT (LATE) IS THE LEEWAY AVAILABLE TO A NON-CRITICAL ACTIVITY IF EVERY  OPERATION IN THE PROJECT IS BEING SCHEDULED AT THE LATEST POSSIBLE POINT IN TIME.
4 6 2 3 1 5 7 8 t e  = 4 t e  = 2 t e  = 3 t e  = 1 t e  = 7 t e  = 10 t e  = 2 t e  = 9 t e  = 6 t e  = 5 v t  = 1 v t  = 1 v t  = 1 v t  = 1 v t  = 1 v t  = 1 v t  = 16 v t = 8 v t  = 2 v t  = 5
[object Object],INDIRECT COSTS 1. MANAGERIAL SERVICES 2. EQUIPMENT RENTALS 3. ALLOCATION OF FIXED COSTS 4. UTILITY COSTS 5. STORAGE COSTS CRASH NORMAL JOB DURATION PROJECT DURATION INDIRECT COSTS DIRECT COST OF JOB
THE PRESIDENT OF ABC MANUFACTURING COMPANY HAS AN OPPORTUNITY TO PARTICIPATE IN A PROJECT THAT HAS A SALES PRICE OF RS.90,000 BUT IT MUST BE COMPLETED WITHIN 8 WEEKS. THE LETTER OF INTENT WAS RECEIVED FRIDAY AFTERNOON. BOTH THE PRODUCTION MANAGER AND THE COST ACCOUNTANT CAME IN ON SATURDAY AND COMPLETED THE APPROPRIATE TIME AND COST FOR YOU BASED UPON PAST JOBS. SINCE THE PRESIDENT NEEDS AN ANSWER AT 8:30 A.M. ON MONDAY (START  OF THE 8 WEEKS), YOU HAVE BEEN REQUESTED TO DETERMINE THE PROFITABILITY OF THE PROJECT ON AN 8 WEEKS BASIS. AN ANSWER AT 8:30 A.M. ON MONDAY ALLOWS THE FIRM TO START THE PRODUCTION ORDER AT 10:00 A.M. IN ORDER TO STAY WITHIN THE 8 WEEKS DEMANDED BY THE CUSTOMER. THE TIME AND COST UNDER NORMAL CONDITIONS WITHOUT CRASHING THE PROJECT IS BASED UPON ON 11 WEEKS BASIS. WHAT ANSWER SHOULD THE PRESIDENT GIVE TO THE CUSTOMER ON MONDAY MORNING? A TABLE OF TIMES AND COSTS IS AS FOLLOWS:
  PRECEDING    NORMAL  CRASH EVENT   EVENT ________________   ________________ TIME   COST   TIME  COST   (WEEKS)   (RS.)   (WEEKS)  (RS.)   4   1 2 8,000   1   13,000   2  1 3 7,000   1   19,000   3   1 6  11,000   5   13,000   4   2 4 6,000   3   10,000   3   2   2 9,000   1   10,000   5   2 7 8,500   6   11,000   5   4 4  10,000   3   16,000   5   3 3 5,000   2   7,000
[object Object],[object Object],  FOR THE FOLLOWING PROJECT ACTIVITY  PREDECESSOR    NORMAL  CRASH IDENTIFI-  ACTIVITIES  ________________   ________________ CATION  TIME   COST   TIME  COST   (DAYS)   (RS.)   (DAYS)  (RS.)   a   - 2 30   1   50   b  - 4 50   3   70   c   - 4 40    2   100   d   a,b 4 35   4   35   e   b,c  8 75   6   150   f   c 2 60   1   90   g   d 6 40   4   90   h   g,e,f 12 160   7   260   i   h  6 100   4   200
[object Object],[object Object],[object Object],[object Object],[object Object]
3 5 A B E D 1 2 10 4 10/10 0/0 15/15 25/25 6 10 5 C 9 days B 6 1 2 3 A C E 10 5 10 4 D 11 DAYS 4 V V V
BASIC CONCEPTS OF NETWORK COST SYSTEMS ,[object Object],[object Object],[object Object],[object Object]
[object Object],  NEW PRODUCT LAUNCH In planning a project to introduce a new product in the market, a company lists the various activities, their normal times and costs and their crash times and costs as shown in the table below:  Activity Description  Immediate  Normal  Crash     predecessor(s)      Time  Cost  Time  Cost   (weeks)  (Rs.)  (weeks)  (Rs.)   A Product  - 5 1000  4  1200 design    B Market  - 2   600  2  600 research   C Product  A 4   800  3  1000  analysis   D Product A  4 1000  3  1500 model   E Sales A  3 1100  1  1600 brochure   F Cost C 1   700  1  700 accounting   G Product D 4   800  2  1260 testing   H Sales  B,E 5   900  3  1200 survey     I Price an H  2   850  2  850 demand report   J Project F,G,I  3   750  2  1000 report

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Comparative characteristics of pert and cpm

  • 1.
  • 2.
  • 3.
  • 4. 3 1 2 4 6 5 1 2 4 6 5 3 1 2 4 6 5 3 JOB A JOB B JOB C STAGE I STAGE II 1 2 4 6 5 3 2 3 3 1 2 6 5 2 STAGE III TIME TIME JOB A JOB B JOB C TIME
  • 5.
  • 6. ACTIVITY ACTIVITY IMMEDIATE IDENTIFICATION DESCRIPTION PREDECESSOR{S} a CUT THE TOP - b MAKE THE LEGS - c LAMINATION a d MAKE THE STAND b e FINAL ASSEMBLY c,d f FINAL POLISHING ETC. e MAKING A DINING TABLE
  • 7. START a b f e d c FINISH 3 2 5 4 6 e f AN ARROW DIAGRAM a b c d 1 AON DIAGRAM
  • 8.
  • 9. 4 5 2 3 1 a b c d e
  • 10.
  • 11.
  • 12. 3 7 6 5 1 a a' c b D 1 D 2 d e 3 6 5 a a’ b d e c 1 2 2 4 4 D 1
  • 13. 3 a b D 1 e c 2 1 4 2 5 a b d e c 3 1 5 6 D 2 d 3 a b e c 2 1 4 5 D 2 d D 1 D 1 D 2 4
  • 14.
  • 15. 2 6 2 3 1 1 4 5 8 5 4 7 1 1 3 3½ 2 ½ 1½ 0 0 5 7 13½ 8 11 1 ½ 13½ 4 9.½ 9½ 4 7 8 CRITICAL PATH IS 6½ 8½ 6 6 LEGEND/KEY T E T L EV.NO 1 1
  • 16.
  • 17.
  • 18.
  • 19. 4 6 2 3 1 5 7 8 t e = 4 t e = 2 t e = 3 t e = 1 t e = 7 t e = 10 t e = 2 t e = 9 t e = 6 t e = 5 v t = 1 v t = 1 v t = 1 v t = 1 v t = 1 v t = 1 v t = 16 v t = 8 v t = 2 v t = 5
  • 20.
  • 21. THE PRESIDENT OF ABC MANUFACTURING COMPANY HAS AN OPPORTUNITY TO PARTICIPATE IN A PROJECT THAT HAS A SALES PRICE OF RS.90,000 BUT IT MUST BE COMPLETED WITHIN 8 WEEKS. THE LETTER OF INTENT WAS RECEIVED FRIDAY AFTERNOON. BOTH THE PRODUCTION MANAGER AND THE COST ACCOUNTANT CAME IN ON SATURDAY AND COMPLETED THE APPROPRIATE TIME AND COST FOR YOU BASED UPON PAST JOBS. SINCE THE PRESIDENT NEEDS AN ANSWER AT 8:30 A.M. ON MONDAY (START OF THE 8 WEEKS), YOU HAVE BEEN REQUESTED TO DETERMINE THE PROFITABILITY OF THE PROJECT ON AN 8 WEEKS BASIS. AN ANSWER AT 8:30 A.M. ON MONDAY ALLOWS THE FIRM TO START THE PRODUCTION ORDER AT 10:00 A.M. IN ORDER TO STAY WITHIN THE 8 WEEKS DEMANDED BY THE CUSTOMER. THE TIME AND COST UNDER NORMAL CONDITIONS WITHOUT CRASHING THE PROJECT IS BASED UPON ON 11 WEEKS BASIS. WHAT ANSWER SHOULD THE PRESIDENT GIVE TO THE CUSTOMER ON MONDAY MORNING? A TABLE OF TIMES AND COSTS IS AS FOLLOWS:
  • 22. PRECEDING NORMAL CRASH EVENT EVENT ________________ ________________ TIME COST TIME COST (WEEKS) (RS.) (WEEKS) (RS.) 4 1 2 8,000 1 13,000 2 1 3 7,000 1 19,000 3 1 6 11,000 5 13,000 4 2 4 6,000 3 10,000 3 2 2 9,000 1 10,000 5 2 7 8,500 6 11,000 5 4 4 10,000 3 16,000 5 3 3 5,000 2 7,000
  • 23.
  • 24.
  • 25. 3 5 A B E D 1 2 10 4 10/10 0/0 15/15 25/25 6 10 5 C 9 days B 6 1 2 3 A C E 10 5 10 4 D 11 DAYS 4 V V V
  • 26.
  • 27.