The management of one-time projects to install new operations or change existing operations is a major discipline for operations managers. Though based on similar skills used in optimizing ongoing operations, project management focuses on the completion of a discrete project on time, on budget, and in scope, as planned and approved.
Project managers use the following formulas to estimate the shortest and most likely project completion time, along with expected variation, expected cost, and variation.
CPM (critical path method)
Let ES = earliest start time, EF = earliest finish time, LS = latest start time, and LF = latest finish time for an activity.
Slackactivity = LF – EF = LS – ES
PERT (program evaluation and review technique)
Let a = the optimistic, m = the most likely, and b = the pessimistic estimates for the duration of an activity.
For PERT, the expected duration of an activity and its variance are:
This formula also works for estimating individual activity costs.
