Critical Path Analysis

AAA

DEFINITION of 'Critical Path Analysis'

A project-management technique that lays out all the activities needed to complete a task, the time it will take to complete each activity and the relationships between the activities. Also called the "critical path method", critical path analysis can help predict whether a project can be completed on time and can be used to reorganize the project both before starting it, and as it progresses, to keep the project's completion on track and ensure that deliverables are ready on time.


Either manually or using computer software, the project manager first lists each activity, the order it must be completed in and how long it is expected to take, and then diagrams the process.

INVESTOPEDIA EXPLAINS 'Critical Path Analysis'

The critical path refers to the way the diagram shows those activities that must be completed, and complete in a specific order, so that the project can be completed successfully and on time. A series of lines and circles visually depict the critical path. Each circle represents an activity that needs to be completed and each line shows the relationship between two activities. The critical path will be the longest path through the diagram, and will show how long a project is expected to take if the scope does not change and everything goes according to plan.

RELATED TERMS
  1. Project Management

    The planning and organization of an organization's resources ...
  2. Gantt Chart

    A Gantt chart is a visual representation of a project schedule. ...
  3. Manufacturing Resource Planning ...

    An integrated information system used by businesses. Manufacturing ...
  4. Materials Requirement Planning ...

    One of the first software based integrated information systems ...
  5. Enterprise Resource Planning - ...

    A process by which a company (often a manufacturer) manages and ...
  6. Operational Efficiency

    A market condition that exists when participants can execute ...
Related Articles
  1. Professionals

    Manage Your Clients' Expectations

    You can't control how they react to the market, but you can help them understand the reality of the situation.
  2. Active Trading Fundamentals

    Evaluating A Company's Management

    Financial statements don't tell you everything about a company's health. Investigate the management behind the numbers!
  3. Professionals

    Management Strategies From A Top CEO

    Find out what this winning manager did to grow one of the biggest companies in the world.
  4. Retirement

    The Evolution Of Enterprise Risk Management

    This growing sector can tell you a lot about the companies you are investing in.
  5. Options & Futures

    Putting Management Under The Microscope

    We tell you where to find the telltale signs of corporate misdeeds.
  6. Investing

    Top 9 Questions Investors Should Ask Management

    Find out how to get the answers you want without getting the company line.
  7. Professionals

    What is a SWOT Analysis?

    SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. SWOT analysis is a management tool used to identify strategies for success. It may be used to guide individual thinking, group ...
  8. Investing Basics

    Why do companies decide to unbundle their lines of business?

    In recent years, companies have discovered that there are limits to the gains created by having all major business activities in one organization.
  9. Investing

    How do name-brand products compete with their generic competitors?

    On April 2, 1993, Phillip Morris announced that it was cutting the price of its cigarettes to compete with the growing number of generic brands selling for much less. The announcement had an ...
  10. Economics

    The Nash Equilibrium

    Nash Equilibrium is a key concept of game theory, which helps explain how people and groups approach complex decisions. Named after renowned mathematician John Nash, the idea of Nash Equilibrium ...

You May Also Like

Hot Definitions
  1. Commercial Paper

    An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories ...
  2. Federal Funds Rate

    The interest rate at which a depository institution lends funds maintained at the Federal Reserve to another depository institution ...
  3. Fixed Asset

    A long-term tangible piece of property that a firm owns and uses in the production of its income and is not expected to be ...
  4. Break-Even Analysis

    An analysis to determine the point at which revenue received equals the costs associated with receiving the revenue. Break-even ...
  5. Key Performance Indicators - KPI

    A set of quantifiable measures that a company or industry uses to gauge or compare performance in terms of meeting their ...
  6. Bank Guarantee

    A guarantee from a lending institution ensuring that the liabilities of a debtor will be met. In other words, if the debtor ...
Trading Center