Project Management Institute

A simulation approach to the PERT/CPM time-cost trade-off problem

The traditional method of crashing Project Evaluation and Review Technique (PERT) networks ignores the stochastic model to a determinisitic Critical Path Method (CPM) model and simply using activity time means in calculations. The project is then arbitrarily crashed to some desired completion date, without consideration for what the penalty for late completion of the project is. Additionally, the method ignores the fact that reducing some activity times may reduce the mean project completion time more than others, due to such factors as bottlenecks. The authors use a computer simulation model to determine the order in which activities should be crashed as well as the optimal crashing strategy for a PERT network to minimize the expected value of the total (crash + overrun) cost, given a specified penalty function for late completion of the project. Three extreme network types are examined, each with two different penalty functions.
member content locked

Log in or join PMI to gain access

or Join



Related Content

  • PMI Pulse of the Profession 2020

    Pulse of the Profession 2020

    Are you future ready? Our Pulse of the Profession® research shows that organizations that prioritize maturing their delivery capabilities enjoy more successful outcomes.

  • New Data Reinforces Role of Project Leadership in Future of Work

    New Data Reinforces Role of Project Leadership in Future of Work

  • PM Network

    Enhanced Existence member content locked

    Augmented reality (AR) is getting increasingly real. Thanks to the ubiquity of social media and smartphones, more consumers have access to AR than ever before—though they may not realize it. At the…

  • PM Network

    Diversity Decode member content locked

    By Parsi, Novid Big tech is getting innovative to solve its lingering diversity problem. From implementing artificial intelligence (AI) hiring tools aimed at eliminating unconscious biases to hosting hackathons…

  • PM Network

    Waste Not, Want Not member content locked

    By Parsi, Novid If the high cost of private healthcare in the United States wasn’t bad enough, much of that expense is avoidable. According to a 2019 study in the Journal of the American Medical Association, about…


Publishing or acceptance of an advertisement is neither a guarantee nor endorsement of the advertiser's product or service. View advertising policy.