[Solved] PERT and CPM MCQ [Free PDF] - Objective Question Answer for PERT and CPM Quiz - Download Now! (2024)

1. Normal
2. Binomial
3. Poisson
4. Beta

The correct answer is Beta.

Key PointsIn PERT charts, the activity time distribution is assumed to follow a Beta distribution.

Here's why the Beta distribution is used:

Uncertainty: Unlike Critical Path Method (CPM), PERT acknowledges the uncertainty associated with activity durations in projects. The Beta distribution allows for incorporating this uncertainty by capturing a range of possible durations for each activity.
Flexibility: The beta distribution is a flexible probability distribution with parameters that can be adjusted to reflect the specific characteristics of an activity, including its optimistic, pessimistic, and most likely durations. This allows for a more realistic representation of the possible timeframes for an activity compared to assuming a fixed duration.
Shape: The beta distribution can take on various shapes depending on the chosen parameters, allowing it to model different scenarios, such as activities with skewed distributions or durations concentrated around the most likely time.
Therefore, the Beta distribution provides a suitable framework for representing the inherent uncertainty and variability in activity durations within a PERT chart

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1. 5.5%
2. 6.5%
3. 10.0%
4. 15.5%

The correct answer is10.0%.

Key Points

• TheCAPM modelcalculatesexpected returns from an investmentand can be used to determine prices for individual securities.
• The Capital Asset Pricing Model (CAPM) was developed in the early 1960s by William Sharpe, Jack Treynor, John Lintner and Jan Mossin.
• The formula to calculate expected return usingCAPM model:

It is given that E(R) = 15.5%, Rf = 3.5%, beta = 1.2

So, 15.5 = 3.5 + 1.2 (Rm - Rf)

15.5 - 3.5 = 1.2 (Rm - Rf)

12 = 1.2 (Rm - Rf)

So Rm - Rf = 12 / 1.2

= 10

Hence, the correct answer is10.0%.

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1. Small project only
2. Large project only
3. Both small and large projects equally
4. Neither small nor large projects

The correct answer is Larger projects only.

Key PointsThe Critical path method consists of a sequence of events that has to be completed before the completion of the project. It shows the longest sequence of events or tasks that have to be completed in the project duration. So, it is suitable for larger and complex projects only.

Important Points

Critical Path Method (CPM):

The critical path method is used by the project managers indeveloping the project schedule.This is done using anetwork diagram which shows the sequence of events in a project. This is prepared during theplanning phase of the projectso that project managers can focus on project cost, resources, and time beforehand.

Importance of Critical Path Method (CPM):

• It helps to identify theproject dependencies, risks, and resource constraints. Through the network diagram, the project managers can identify such problems and resolve them before they occur.
• It helps in estimating the accurateproject timings.
• It helps the managers identify thecritical tasksthat need attention.
• It helps in monitoring theproject's progress and measuring the variance.

Hence, the correct answer is larger projects only.

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1. Budgeting
2. Scheduling
3. Evaluating
4. Finalizing

The correct answer is Scheduling.

Key PointsActivity Definition:

PERT begins with breaking down the project into specific activities or tasks. Each task is identified and defined clearly. Activities should be well-defined and have a specific start and end point.
Activity Sequencing:

Once activities are identified, the next step is to establish the relationships and dependencies between them. This involves determining the order in which activities must be performed and identifying any constraints or dependencies between tasks.
Time Estimation:

Time estimation involves estimating the time required to complete each activity. PERT uses three time estimates for each activity: optimistic time (the minimum time required), pessimistic time (the maximum time required), and most likely time (the best estimate based on realistic conditions).
Critical Path Analysis:

Critical path analysis is a key aspect of PERT. The critical path is the longest sequence of dependent activities that must be completed on time to ensure that the project is completed within the specified timeframe. Activities on the critical path have zero slack or float, meaning any delay in these activities will directly impact the project's overall timeline.
Float or Slack:

Float or slack is the amount of time that a task can be delayed without delaying the project's completion date. Non-critical activities have float, providing some flexibility in scheduling

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1. Cash Management
2. Inventory Management
3. Receivables Management
4. All of These

The correct answer isAll of These.

Key Points

Playing float is a concept that can be used in all three of the areas you mentioned: cash management, receivable management, and inventory management.

Cash management is the process of managing a company's cash flow. Playing float can be used to improve cash flow by delaying the payment of bills or by accelerating the collection of receivables.

Receivable management is the process of managing a company's accounts receivable. Playing float can be used to accelerate the collection of receivables by mailing checks early or by offering discounts for early payment.

Inventory management is the process of managing a company's inventory levels. Playing float can be used to reduce inventory levels by delaying the purchase of materials or by selling products before they are received.

Here are some specific examples of how playing float can be used in each of these areas:

Cash management: A company can delay the payment of bills by mailing checks late or by negotiating longer payment terms with its suppliers. This can free up cash that can be used for other purposes.

Receivable management: A company can accelerate the collection of receivables by offering discounts for early payment. This can encourage customers to pay their bills sooner, which can improve the company's cash flow.

Inventory management: A company can reduce inventory levels by delaying the purchase of materials or by selling products before they are received. For example, a company could wait until it has received an order for a product before purchasing the materials to produce it.

Playing float can be a useful tool for improving cash flow and reducing costs. However, it is important to use it responsibly. If a company abuses float, it could damage its relationships with its suppliers, customers, and creditors

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PERT and CPM Question 6

1. 3
2. 9
3. 81
4. 27

PERT and CPM Question 6 Detailed Solution

Concept:

In CPM:

The standard deviation of critical path:

σ_cp=\(\sqrt {Sum\;of\;variance\;along\;critical\;path} \)

σ_cp =\(\sqrt {σ _1^2 + σ _2^2 + \ldots + σ _8^2 + σ _9^2} \)

Where,σ₁,σ₂, ....,σ₈,σ₉are the standard deviation of each activity on the critical path

Calculation:

Given:

σ1,σ2, ....,σ8,σ9= 3

σcp=\(\sqrt {σ _1^2 + σ _2^2 + \ldots + σ _8^2 + σ _9^2} \)

σ_cp =\(\sqrt {3^2 + 3^2 + 3^2 + 3^2 + 3^2 + 3^2 + 3^2 + 3^2 + 3^2} \)

σ_cp =\(\sqrt {9 \times 9} \)= 9

∴ the standard deviation of the critical path is9.

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PERT and CPM Question 7

1. 1
2. 6
3. 12
4. 18

PERT and CPM Question 7 Detailed Solution

Concept:

Project Evaluation and Review Technique (PERT) is probabilistic in nature and is based upon three-time estimates to complete an activity.

Optimistic Time (to):It is the minimum time that will be taken to complete an activity if everything goes according to the plan.

Pessimistic Time (tp):It is the maximum time that will be taken to complete an activity when everything goes against the plan.

Most likely time (tm):It is the time required to complete a project when an activity is executed under normal conditions.

Average or most expected time is given by\({t_E} = \left( {\frac{{{t_p}\; + \;4{t_m}\; + {t_o}}}{6}} \right)\)

The variance gives the measure of uncertainty of activity completion. The variance of the activity is given by

Variance,\(V = {\left( {\frac{{{t_p} - {t_0}}}{6}} \right)^2}\)

Standard duration,\(\sigma = \sqrt {variance} \)

Calculation:

Given:

t_p = 10 days, t_o = 4 days

\({\rm{V}} = {\left( {\frac{{{{\rm{t}}_{\rm{p}}} - {{\rm{t}}_{\rm{o}}}}}{6}} \right)^2} = {\left( {\frac{{10 - 4}}{6}} \right)^2} = 1\)

The variance of the activity is 1.

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PERT and CPM Question 8

1. Normal
2. Binomial
3. Poisson
4. Beta

PERT and CPM Question 8 Detailed Solution

Explanation:

CPM does not directly model uncertainty.

PERT was developed to address the needs of projects which are being done for the first time – a challenge to estimate activity duration.

PERT (Program Evaluation and Review Technique) uses 3 cases:

• Most Optimistic
• Most Pessimistic
• Most likely durations

PERT determines the probability for each duration, whereas CPM considers the most likely duration.

In the standard PERT analysis, the distribution assumed for the activity times is a Beta distribution.

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PERT and CPM Question 9

1. CPM
2. Gantt chart
3. PERT
4. OC curve

PERT and CPM Question 9 Detailed Solution

Explanation:

PERT stands for Program Evaluation and Review Technique and was developed to address the needs of projects for which the time and cost estimates tend to be quite uncertain.

It has a probabilistic approach and hence suitable for the projects which are to be conducted for the first time or projects related toresearch and development.

PERT uses 3 cases:

• Optimistic time⇒estimates the shortest possible time required for the completion of the activity.
• Most likely time⇒estimates the time required for the completion of activity under normal circ*mstances.
• Pessimistic time⇒estimates the longest possible time required for the completion of the activity.

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PERT and CPM Question 10

1. small project only
2. large project only
3. both small and large projects equally
4. neither small nor large projects

PERT and CPM Question 10 Detailed Solution

Explanation:

Critical Path:

Acritical pathis a sequence of interdependent activities or tasks that must be finished before the project can be finished. It is thelongest path (i.e. path with the longest duration) from project start to finish.

Critical Path Method:

• Thecritical path method (CPM)is a project modeling technique that’s used by project managers to find importantdeadlinesand deliver a project on time.
• In a project, the critical path is thelongest distancebetween the start and the finish, including all the tasks and their duration.
• Once a critical path is determined, you’ll have aclear pictureof the project’s actual schedule.
• To find this, project managers use theCPM algorithmto find theleast amountof time necessary to complete each task with the least amount of slack.
• For small projects, managers are often able to memorize and to coordinate all of the various tasks necessary for their completion.
• For larger projects, however, with numerous activities occurring simultaneously, remembering and coordinating these activities can prove much more difficult. CPM and related tools allow managers to determine which particular tasks most affect the total time of the project and enable managers to better schedule each task so that deadlines are met at the least possible cost

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PERT and CPM Question 11

1. Free Float
2. Critical Path
3. Total Float
4. Independent Float

PERT and CPM Question 11 Detailed Solution

Explanation :

Acritical path is a sequence of interdependent activities or tasks that must be finished before the project can be finished. It is the longest path (i.e. path with the longest duration) from project start to finish.

The path which moves along the activities having total float zero.

A. Critical Path Method
1. The critical path method (CPM) is a project modelling technique that's used by project managers to find important deadlines and deliver a project on time.

2. In a project, the critical path is the longest distance between the start and the finish, including all the tasks and their duration.

3. Once a critical path is determined, you'll have a clear picture of the project's actual schedule.

4. To find this, project managers use the CPM algorithm to find the least amount of time necessary to complete each task with the least amount of slack.
5. Once done by hand, nowadays, the critical path is calculated automatically by the project scheduling software. That makes the whole method a lot easier.

B. Critical Path Analysis
1. As mentioned, the purpose of a critical path is to find the least amount of time you'll need to complete a task.

2. Critical path analysis furthers your ability to make better estimates for scheduling because you're mapping out every important task that must be done for a successful project.

C. Critical Path Example

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PERT and CPM Question 12

1. Free float
2. Total float
3. Independent float
4. Activity float

PERT and CPM Question 12 Detailed Solution

Explanation

Slack or Event Float

• Slack corresponds to theevent in PERT.
• Float corresponds to activity in CPM.

Slack

• It is defined as the amount of time by which an event can be delayed without delaying the project schedule.
• Slack of an event = Latest Start Time – Earliest Start Time OR Latest Finish Time – Earliest Finish Time

There are three types of floats.

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PERT and CPM Question 13

1. Only that particular activity
2. Succeeding activity
3. Overall completion
4. Preceding activity

PERT and CPM Question 13 Detailed Solution

Concept

Free float is the portion of total float by which an activity can be delayed without affecting succeeding activity.

\({F_F} = \left( {T_E^j - T_E^i} \right) - tij\)

Free float is also equal to total float minus head event slack.

\({F_F} = {F_T} - S_j\)

In free float, the preceding activity is not allowed to occur at its latest time and hence total float of the preceding activity is affected. However, the succeeding activity can start at its earliest start time, so its total float is unaffected.

Total Float: It is the maximum delay possible for an activity without considering any delay in itsprecedence or succeeding activity.

Independent float is the maximum delay possible for an activity which used floats of preceding activity, but we will not affect the float of succeeding activity.

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PERT and CPM Question 14

1. Network is constructed based on the events.
2. It does not take uncertainties involved in the estimation of times.
3. Network deals with uncertainties and hence three time estimations are considered.
4. As there is no certainty of time, activity duration cannot be reduced.

PERT and CPM Question 14 Detailed Solution

Explanation:

PERT stands for "ProgramEvaluation and Review Technique". This network model is used for project scheduling.

Difference between PERT and CPM (Critical Path Method)

PERT does take uncertainties involved in the estimation of times, therefore three-time estimates have been taken for the calculation project duration. They are optimistic (t_o), pessimistic (t_p), and most likely (t_m).

\(T_e=\frac{t_o\;+\;4t_m\;+\;t_p}{6}\)

Therefore, the option 2is the incorrect statement among the given options.

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PERT and CPM Question 15

PERT and CPM Question 15 Detailed Solution

Concept:

This is a case of activity on node network system (AON).

Slack = latest finish time – Earliest finish time

Calculation:

Slack = latest finish time – Earliest finish time

Slack on Activity L = 42 – 40 = 2

Important Points:-

1.AON network system enables efficient scheduling and controlling.

2. AON network system eliminates the use of dummies thus logical relationship is established by using arrows.

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