Next to PERT, the CPM has enjoyed the widest use among all the systems that follow the networking principles. CPM was developed in 1956 at the E.I. DuPont Nemours and CO., U.S.A. in connection with the periodic overhauling and maintenance of a critical path. It resulted in reducing the shut down period from 130 hours to 90 hours and saving hours and saving the company 1 million dollar. CPM differentiates between the planning and scheduling of a project. While planning refers to determination of activities to be accomplished, scheduling refers to the introduction of time schedule for each activity of the project.
CPM also has two time estimates for each activity. One time cost for the normal situation and the other estimate for the crash situation. However, it does not incorporate any statistical analysis in determining such time estimates. The duration of different activities in CPM are deterministic. There is a precise known time that each activity in the project will take.
Advantages of CPM
- It helps in ascertaining the time schedule of activities having sequential relationships.
- It makes the control function of the management easier.
- It makes better and detailed planning possible.
- It identifies the most critical elements in the project. Thus, the management is kept alert and prepared to pay due attention to the critical activities of the project.
- It provides a standard method of communicating project plans, schedules, time and cost performance.
Limitations of CPM
- CPM fails to incorporate statistical analysis in determining the time estimates.
- It operates on the assumption that there is a precise known time that each activity in the project will take. It may not be true in reality.
- It cannot be used as a controlling device since any change introduced will change the entire structure of the network. Thus, CPM cannot be used as a dynamic controlling device.