The Main Difference Between PERT and CPM Is That

question 103

Multiple Choice

The main difference between PERT and CPM is that

• A) PERT is more accurate than CPM.
• B) PERT assumes that activity durations are known.
• C) PERT ignores activity costs.
• D) CPM assumes that activity durations can vary.
• E) they differ in terminology and in the construction of the network.

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Definitions:

Fixed Manufacturing Cost

Costs that do not fluctuate with the volume of production, such as rent, salaries, and maintenance.

Incremental Analysis

Incremental Analysis is a decision-making tool used to compare the additional costs and benefits of one option over another, ignoring costs and benefits that are unchanged between options.

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent and salaries.

Variable Departmental Costs

Costs that vary directly with the level of output or activity within a specific department of a company.