A Critique of
Lanny A. Karns and Lloyd A. Swanson
“The effects of activity time variance on critical path planning”
Table of Contents
Network Analysis: CPM & PERT
Critical Path Method (CPM) and Program Evaluation and Review Technique (PERT) are the two most commonly used networking techniques for defining the duration of project tasks. While they have much in common, they’re based on different concepts and both were independently developed. PERT defines a probabilistic distribution of activity time defined using three time estimates which emphasizes minimum project duration while downgrading cost restraints. CPM uses one deterministic time estimate emphasizes cost over time restraints. CPM is the most popular of the two methods as it is deemed easier. Lanny Karnes and Lloyd Swanson in their article “The effects of activity time variance on critical path planning“ advocate combining the two methods asserting they cannot be totally independent due to an obvious relationship between time and cost ( Karnes, 2007).
It is well known that there are many techniques Project Managers can use to support better project planning. Critical Path Methodology (CPM) and Program Evaluation and Review Technique (PERT) are two such tools that ae used by many Project Managers. These two techniques, while derived independently of one another, cannot be totally independent due to an obvious relationship between time and cost. While CPM emphasizes cost over time restraints and PERT emphasizes time over costs restraints, perhaps there is a way to bring the two together. Karnes believes the best way to combine these two would be to put CPM’s crashing strategy together with PERT’s probability distribution of activity times come out with the best possible duration and cost for the project (Karnes, 2007).
The three estimates of PERT; optimistic, most likely, pessimistic, are combined to determine an expected duration and variance for each activity. These expected times are used to create the critical path and the variances are added to determine the project duration variance. From these numbers we can develop a probability distribution showing project completion times. The problem here is that if the activity variances lie outside the critical path then they’re not considered when determining the project variance. The fact that they’re not considered can lead to errors in determining total project duration. A similar issue can happen when using CPM’s crashing strategy where multiple paths through the network have similar or close lengths. If we drop the assumption of deterministic activity times and the duration is allowed to vary, a decrease in the length of the critical path may not result in a similar decrease in project duration because of variances inherent in parallel paths. Simply allowing activity times to vary; which inevitably they will do in real life, can result in serious problems with CPM’s crashing strategy leading to wasted time and money (Karnes, 2007).
Network Analysis: CPM & PERT
Using CPM and PERT for network analysis can provide invaluable information for planning, scheduling and executing projects. The main purpose of network planning is to avoid crisis management by using picture representations (graphs) showing the total project activities in a logical order. This aids in determining sequencing and duration of activities and the project. The following information can obtained from such a graphical picture (Kerzner, 2009):
- Interdependencies of activities
- Project completion time
- Impact of late starts
- Impact of early starts
- Trade-offs between resources and time
- Supposing exercises
- Cost of a crashing
- Performance Slippages
- Performance Evaluation
CPM was mainly worried with creating activity prerequisites and determining simple network solutions. It was primarily useful for keeping track of activities and identifying activity conflicts or sequencing flexibilities which could affect project completion. Later on, cost slope analysis was developed as a way to calculate the shortest project time within the constraints of costs and time constraints. This technique was used to determine effective savings in time when it is possible to “crash” or shorten the individual activity times. The time actually saved is divided into the cost increase from compressing the activity to define the net cost slope. The slopes are compared to the costs to determine if reducing project duration will result in cost savings.
PERT was designed to overcome inherent problems in assuming activity time estimates deterministically. By coming up with three activity time estimates it allows the user to develop a probability distribution for the length of each activity. Once this is accomplished the user can calculate sequencing and network solutions in a manner similar to CPM. PERT is a management planning tool that can be used as road map where the activities have been identified along with interdependencies. A PERT chart is usually designed from back to front with the end date in mind (PMBOK, 2013).
Using both CPM and PERT, a Project Manager (PM) is able to determine, with some degree of accuracy, the overall length of the project by determining the duration of each activity. From this analysis the PM can also determine the interdependencies of each activity and thus is able to sequence these activities in a logical order. From this information the PM can determine the Critical Path of the project seeing those activities that have no slack in comparison to those that do have slack (lags and leads). Through network analysis the PM can determine how to better utilize resources more effectively and to track how the project progresses thus keeping effective control on time and costs.
Combining the best of CPM and PERT can make it so that the PM can accurately estimate the amount of time and cost for each activity in the project. But, we have to keep in mind that these are still estimates. One can reasonably assume, through probabilistic analysis, how accurate these estimates are; it still needs to be taken with a grain of salt by keeping a watchful eye on the projects progress. PM’s have to keep in mind how difficult it is to get PERT’s three activity estimates from the subject matter experts or those who will perform the work. Probably part of the reason why many PM’s choose to use CPM over PERT is due to it being easier to determine duration from past history then to wrangle it out of software programmer.
Karns, L. A., & Swanson, L. A. (2007). The effects of activity time variance on critical path planning. PMI. Retrieved from http://www.pmi.org/learning/time-variance-critical-path-planning-1959
Kerzner, H. (2009). Project management: A systems approach to planning, scheduling, and controlling. Hoboken, NJ: John Wiley & Sons.
Project Management Institute. (2013). A guide to the project management body of knowledge (PMBOK guide), fifth edition. Newtown Square, PA: Author.