21-03-2012, 12:43 PM
Management with PERT/CPM
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One of the most challenging jobs that any manager can take on is the management of
a large-scale project that requires coordinating numerous activities throughout the
organization. A myriad of details must be considered in planning how to coordinate all
these activities, in developing a realistic schedule, and then in monitoring the progress of
the project.
Fortunately, two closely related operations research techniques, PERT (program evaluation
and review technique) and CPM (critical path method), are available to assist the
project manager in carrying out these responsibilities. These techniques make heavy use
of networks (as introduced in the preceding chapter) to help plan and display the coordination
of all the activities. They also normally use a software package to deal with all the
data needed to develop schedule information and then to monitor the progress of the project.
Project management software, such as MS Project in your OR Courseware, now is
widely available for these purposes.
PERT and CPM have been used for a variety of projects, including the following types.
1. Construction of a new plant
2. Research and development of a new product
3. NASA space exploration projects
4. Movie productions
5. Building a ship
6. Government-sponsored projects for developing a new weapons system
7. Relocation of a major facility
8. Maintenance of a nuclear reactor
9. Installation of a management information system
10. Conducting an advertising campaign
PERT and CPM were independently developed in the late 1950s. Ever since, they
have been among the most widely used OR techniques.
A PROTOTYPE EXAMPLE—THE RELIABLE CONSTRUCTION CO. PROJECT
The RELIABLE CONSTRUCTION COMPANY has just made the winning bid of
$5.4 million to construct a new plant for a major manufacturer. The manufacturer needs
the plant to go into operation within a year. Therefore, the contract incudes the following
provisions:
• A penalty of $300,000 if Reliable has not completed construction by the deadline 47 weeks
from now.
• To provide additional incentive for speedy construction, a bonus of $150,000 will be
paid to Reliable if the plant is completed within 40 weeks.
Reliable is assigning its best construction manager, David Perty, to this project to help
ensure that it stays on schedule. He looks forward to the challenge of bringing the project
in on schedule, and perhaps even finishing early. However, since he is doubtful that it
will be feasible to finish within 40 weeks without incurring excessive costs, he has decided
to focus his initial planning on meeting the deadline of 47 weeks.
Mr. Perty will need to arrange for a number of crews to perform the various construction
activities at different times. Table 22.1 shows his list of the various activities. The third column
provides important additional information for coordinating the scheduling of the crews.
USING A NETWORK TO VISUALLY DISPLAY A PROJECT
Chapter 9 describes how valuable networks can be to represent and help analyze many
kinds of problems. In much the same way, networks play a key role in dealing with projects.
They enable showing the relationships between the activities and succinctly displaying
the overall plan for the project. They then are used to help analyze the project and
answer the kinds of questions raised at the end of the preceding section.