CPM Model

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CPM Model In 1958 Du Pont Company used a
technique called Critical Path Method (CPM) to
schedule and control a very large project like
overhauling of a chemical plant, there by
reducing the shutdown period from 130hrs to 90
hrs saving the company 1 million dollar. Both of
these techniques are referred to as project
scheduling techniques.
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Differences between PERT CPM
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• Cost considerations in PERT / CPM
• The total cost of any project comprises of two
  costs.
• Direct cost - material cost, manpower loading
• Indirect cost - overheads such as managerial
  services, equipment rent, building rent etc.

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Direct cost
Crash
Normal
Job duration
Shorter the duration higher will be the Direct
expenses
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Indirect cost
Normal
Crash
Job duration
Shorter the duration lesser will be the Indirect
expenses
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Total cost
Cost
Direct cost
Indirect cost
Normal
Optimum
Crash
Job duration
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Find the lowest cost and optimum cost schedule
for the following project, given the over head
expenses as Rs.45/-day.
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1.Construction of the Network
4
7 - 3
10
3 -1
1
2
5 - 2
40
20
4 - 2
40
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Normal duration Crash duration
Key
Cost of crashing per day in Rs.
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2.Determination of Critical path
4
7 - 3
10
3 -1
1
2
5 - 2
40
20
4 - 2
40
3
Normal duration Crash duration
Key
Cost of crashing per day in Rs.
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Step 1.
3 -1
4 - 2
5 - 2
1
3
2
4
20
40
40
4
7 - 3
10
12 days
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Step 2.
3 -1
4 - 2
3 - 2
1
3
2
4
20
40
40
7 - 3
10
10 days
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Step 3.
3 -1
4 - 2
2 - 2
1
3
2
4
20
40
40
6 - 3
10
9 days
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Step 4.
1 -1
4 - 2
2 - 2
1
3
2
4
20
40
40
6 - 3
10
7 days
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Step 5.
3 -1
2 - 2
2 - 2
1
3
2
4
20
40
40
4 - 3
10
5 days
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Differences between PERT CPM
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