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.

BREAKING DOWN '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.

RELATED TERMS
  1. Critical Path Analysis

    A project-management technique that lays out all the activities ...
  2. Project Management

    The planning and organization of an organization's resources ...
  3. Completion Bond

    A financial contract that insures a given project will be completed ...
  4. Scope

    A project management term for the combined objectives and requirements ...
  5. Fibonacci Time Zones

    An indicator used by technical traders to identify periods in ...
  6. Initial Cash Flow

    The amount of money paid out or received at the start of a project ...
Related Articles
  1. Managing Wealth

    Project Manager: Job Description & Average Salary

    Discover more about the specific tasks that project managers are responsible for and the average salary that can be expected in such a position.
  2. Managing Wealth

    Project Manager: Career Path & Qualifications

    Learn more about what project managers job, the qualifications necessary for the position and the most common careers for these professionals.
  3. Professionals

    What Exactly Do Project Managers Do?

    While supervision is one important part of the job, a lot more goes into project management than just watching everyone work.
  4. Markets

    10 Ways to Improve Cash Flow in Construction

    Improving cash flow in construction requires some sector-specific strategies.
  5. Financial Advisor

    What's a Hurdle Rate?

    Hurdle rate has two meanings. In the business world, a business typically makes a decision on a capital project based on the net present value approach. To determine the net present value, the ...
  6. Managing Wealth

    Common Interview Questions for Project Managers

    Discover the basic skills needed for a position as a project manager along with common interview questions used in applying for such a position.
  7. Investing

    Understanding Net Present Value

    Learn how this value is used to determine the worth of a project.
  8. Markets

    Capital Budgeting

    Capital budgeting is a planning process used by companies to evaluate which large projects to invest in, and how to finance them. It is sometimes called “investment appraisal.”
  9. Investing

    An Introduction To Capital Budgeting

    We look at three widely used valuation methods and figure out how companies justify spending.
  10. Investing

    Understanding Operating Activities

    Operating activities are the daily processes conducted by a company to generate income.
RELATED FAQS
  1. How do you determine the Critical Path in operations management?

    Find out how to develop and use the critical path in a standard critical path analysis, a popular operations management technique ... Read Answer >>
  2. How do companies calculate the estimated duration of a new project?

    Learn about some of the common methods used by companies to estimate the duration of a new project, including those with ... Read Answer >>
  3. Who developed Critical Path analysis in operations management?

    Read about the origins of critical path analysis, starting in the 1950s with DuPont chemicals and including later improvements ... Read Answer >>
  4. What is the formula for calculating net present value (NPV) in Excel?

    Understand how net present value is used to estimate the anticipated profitability of projects or investments and how to ... Read Answer >>
  5. How do you use the profitability index rule when scoping out a project?

    Understand the parameters of the profitability index rule and how this rule is used in corporate capital allocation to determine ... Read Answer >>
  6. Why is a bank guarantee important in a long-term project contract?

    Understand what a bank guarantee is and learn why it is so important to the risk and safety of a long-term project contract Read Answer >>
Hot Definitions
  1. AAA

    The highest possible rating assigned to the bonds of an issuer by credit rating agencies. An issuer that is rated AAA has ...
  2. GBP

    The abbreviation for the British pound sterling, the official currency of the United Kingdom, the British Overseas Territories ...
  3. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  4. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
  5. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  6. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
Trading Center