Page 220 - DMGT521_PROJECT_MANAGEMENT

Unit 13: PERT, CPM and Time Estimation

Introduction Notes

In the late 1950s, the Program Evaluation and Review Technique (PERT) and the Critical Path
Method (CPM) were independently developed. PERT was developed by the U.S. Navy, Booz-
Allen Hamilton (a business consulting firm), and Lockheed Aircraft (now Lockheed Martin
Corp.); and CPM was developed by Dupont De Nemours Inc. When they were developed, there
were significant differences in the methods.

Example: PERT used probabilistic (or uncertain) estimates of activity durations and
CPM used deterministic (or certain) estimates but included both time and cost estimates to
allow time/cost trade-offs to be used. Both methods employed networks to schedule and display
task sequences. (Throughout this unit, we will use the words “activity” and “task” as synonyms
to avoid constant repetition of one or the other.)
Both methods identified a critical path of tasks that could not be delayed without delaying the
project. Both methods identified activities with slack (or float) that could be somewhat delayed
without extending the time required to complete the project. While PERT and CPM used slightly
different ways of drawing the network of activities, anything one could do with PERT, one could
also do with CPM and vice versa. When writing about the history of project management,
differentiating PERT and CPM is important and interesting. When managing projects, the
distinction is merely fussy. Traditional PERT is used less often than CPM; but CPM can be used
with three-time estimates, and we can do things with PERT that were restricted to CPM in
“olden times.” We use both names because users in the real world are apt to use either.

13.1 Brief History of PERT/CPM

PERT/CPM or Network Analysis as the technique is sometimes called, developed along two
parallel streams, one industrial and the other military.
CPM was the discovery of M.R. Walker of E.I. DuPont de Nemours & Co. and J.E.Kelly of
Remington Rand, circa 1957. The computation was designed for the UNIVAC-I computer. The
first test was made in 1958, when CPM was applied to the construction of a new chemical plant.
In March 1959, the method was applied to maintenance shut-down at the Du Pont works in
Louisville, Kentucky. Unproductive time was reduced from 125 to 93 hours.
PERT was devised in 1958 for the POLARIS missile program by the Program Evaluation Branch
of the Special Projects office of the U.S. Navy, helped by the Lockheed Missile Systems division
and the Consultant firm of Booz-Allen & Hamilton. The calculations were so arranged so that
they could be carried out on the IBM Naval Ordinance Research Computer (NORC) at Dahlgren,
Virginia.

13.2 Language of PERT/CPM

Several terms used in discussing PERT/CPM analysis have been adopted from everyday language
but have quite different meanings than in common usage. These terms are defined here as used
in PERT/CPM.

13.3 Network Techniques of Project Management

To achieve the objectives of project management network techniques is widely used. It is
commonly known as PERT (Programmed Evaluation and Review Technique), CPM (Critical
Path Method).

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