Critical Path Analysis

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Advantages
- Identifies critical activities, which need to be supervised closely to make sure deadlines are met.

- Labour resources can be transferred from activities with float time to critical activities to make sure deadlines are met.

- CPA allows managers to operate just-in-time production. Resources like raw materials, labour and equipment can be employed efficiently from the earliest start time instead of being stored, waiting to be needed. This saves on storage costs and opportunity of cost of storing stock, improving the companies liquidity.

- CPA finds the shortest time possible for completing a complex project and can give the business a competitive advantage. Important in time based management.

- Forces managers to think about the activities involved in the project, preventing important activities from being forgotten and ensuring important activities such as ad campaigns are launched at the best possible date for the project.

- CPA can be used to review progress on individual tasks and can be updated as the project progresses.
Disadvantages
- Reliant on estimates of how long each activity will take. If these are not accurate the whole analysis will be inaccurate.

- Unless critical activities are identified and supervised closely, there will be delays to the whole project, CPA can often put excessive pressure on managers to meet deadlines.

- Managers must make changes to CPA as they know delays are likely otherwise it will be inaccurate.

- Requires a significant amount of planning and time.

- Setting tight deadlines on critical activities which may not be SMART will demotivate staff or encourage them to cut corners. This puts quality at risk.

- CPA doesn't measure cost or quality of the project.
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