Critical Path Analysis - CPA

Definition of 'Critical Path Analysis - CPA'


A process by which projects are outlined and sequenced to have the most favorable outcome. Critical path analysis involves the advanced and careful planning of complicated projects, taking into consideration the sequence of activities that must occur, and the estimated time necessary to each step's completion. The critical path can be thought of as the necessary flow that a project must follow to achieve timely success.

Investopedia explains 'Critical Path Analysis - CPA'


The intent of critical path analysis is to maximize success while minimizing the time needed to complete the project. It focuses on time management and the ongoing evaluation of a project's progress, and to help management with decision making. The process involves identifying the major activities that will be undertaken during the project, sequencing the major activities, constructing an activity flow design or chart, estimating the time for each activity, estimating the time to complete all of the activities and determining the critical path. This can be done, for example, by constructing a Gantt Chart.



comments powered by Disqus
Hot Definitions
  1. Federal Reserve Note

    The most accurate term used to describe the paper currency (dollar bills) circulated in the United States. These Federal Reserve Notes are printed by the U.S. Treasury at the instruction of the Federal Reserve member banks, who also act as the clearinghouse for local banks that need to increase or reduce their supply of cash on hand.
  2. Benchmark Bond

    A bond that provides a standard against which the performance of other bonds can be measured. Government bonds are almost always used as benchmark bonds. Also referred to as "benchmark issue" or "bellwether issue".
  3. Market Capitalization

    The total dollar market value of all of a company's outstanding shares. Market capitalization is calculated by multiplying a company's shares outstanding by the current market price of one share. The investment community uses this figure to determine a company's size, as opposed to sales or total asset figures.
  4. Oil Reserves

    An estimate of the amount of crude oil located in a particular economic region. Oil reserves must have the potential of being extracted under current technological constraints. For example, if oil pools are located at unattainable depths, they would not be considered part of the nation's reserves.
  5. Joint Venture - JV

    A business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task. This task can be a new project or any other business activity. In a joint venture (JV), each of the participants is responsible for profits, losses and costs associated with it.
  6. Aggregate Risk

    The exposure of a bank, financial institution, or any type of major investor to foreign exchange contracts - both spot and forward - from a single counterparty or client. Aggregate risk in forex may also be defined as the total exposure of an entity to changes or fluctuations in currency rates.
Trading Center