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CMA Final · Strategic Cost Management · Network Analysis - PERT, CPM

The critical path of a PERT network of Gujarat Pumps Ltd has three activities with these (optimistic, most likely, pessimistic) times in days: A (2, 5, 8), B (3, 6, 15), C (4, 7, 10). What are the expected duration and the variance of the critical path?

The critical path has an expected duration of 19 days and a variance of 6. Expected times are 5, 7 and 7 days. Variances are 1, 4 and 1, from ((p−o)/6) squared. Summing along the path gives 19 days and a variance of 6.

  1. A19 days; variance 6Correct
  2. B19 days; variance 36
  3. C18 days; variance 6
  4. D18 days; variance 2.45

Explanation

Expected times: A = (2+20+8)/6 = 5, B = (3+24+15)/6 = 7, C = (4+28+10)/6 = 7, so the total is 19 days. Variances = ((p−o)/6)²: A = 1, B = 4, C = 1, total 6. The 18 days options add up the most likely times. The 36 option squares the sum of the standard deviations incorrectly, and 2.45 is the standard deviation, not the variance.

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