Program Management Calculations: Spreadsheet Version


Calculations for PERT and CPM are not particularly difficult-they require no more than simple arithmetic. They can get lengthy and sometimes convoluted, especially since CPM requires frequent recalculation. So, while it can be done with pencil and paper, frequently it is done with the aid of computers-simple spreadsheets, or even dedicated application programs like Microsoft Project.

When calculating PERT and CPM without a dedicated application program, it is best to approach it in a stepwise process (Krueckeberg & Silvers, 1974, pp. 231-255).

PERT Analysis

  1. Define tasks to be performed
  2. Links tasks in sequence
  3. Estimate time to complete each task ("normal time")
  4. Determine earliest expected date for completion of tasks and activity
  5. For each task, determine the latest allowable time for moving to the next task
  6. Determine probability of meeting the expected time
  7. In PERT, shift the allocation of resources from slack activities to activities on the critical path, and revise time estimates and probability estimates. Usually, you would not settle just for shifting based on time saving, but would move at this point to CPM and consider time and money in determining the optimal path.

A typical PERT table might have the following structure:

Activity

Beginning

Ending

a

m

b

expected

sd

Foundatn

1

2

1

2

3

2

.33

Frame

2

3

1

4

6

4

.83

CPM Analysis

  1. Develop time and cost data ("normal" and "crashed") for all tasks
  2. Develop cost-per-week for crashing (crashed costs divided by time saved)
  3. Develop project network (PERT)
  4. Crash the activity on the critical path with the lowest cost-for-crashing
  5. Recalculate the project network (the critical path might change!)
  6. Repeat steps 4 & 5 until all the paths have been crashed.
  7. Ease up on all noncritical paths, just to the point that all paths are critical

A typical CPM table might have the following structure:

Activty

Beg.

End

Time-Crash

Time-Norml

Cost-Crash

Cost-Norml

Time Saved

Cost Increas

Cost / Week

Fdn

1

2

1

2

4000

3000

1

1000

1000

Frame

2

3

1

4

8000

4000

3

4000

1333

In addition to tabular data, both CPM and PERT will generally include a graphic presentation of the network of activities, usually with the length of each activity (in time) indicated and the critical path marked distinctively.


 

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1996 A.J.Filipovitch
Revised 11 March 2005