PROJECT PERT

ESTIMATE
Example: ABC Associates

• Consider the following project:

Immed. Optimistic Most Likely Pessimistic

Activity Predec. Time (Hr.) Time (Hr.) Time (Hr.)
A -- 4 6 8
B -- 1 4.5 5
C A 3 3 3
D A 4 5 6
E A 0.5 1 1.5
F B,C 3 4 5
G B,C 1 1.5 5
H E,F 5 6 7
I E,F 2 5 8
J D,H 2.5 2.75 4.5
K G,I 3 5 7
Example: ABC Associates
• Activity Expected Times and Variances

ET = (a + 4m + b)/6 2 = ((b-a)/6)2
Activity Expected Time Variance
A 6 4/9
B 4 4/9
C 3 0
D 5 1/9
E 1 1/36
F 4 1/9
G 2 4/9
H 6 1/9
I 5 1
J 3 1/9
K 5 4/9
• Project Network

D J
5 3
H
A E 6
6 1
I

Start
C F 5 Finish
3 4
K
B G 5
4 2
 • Earliest and Latest Times

D 6 11 J 19 22
5 15 20 3 20 23
H 13 19
A 0 6 E 6 7 6 14 20
6 0 6 1 12 13
I 13 18
Start
C 6 9 F 9 13 5 13 18 Finish
3 6 9 4 9 13
K 18 23
B 0 4 G 9 11 5 18 23
4 5 9 2 16 18
• Earliest/Latest Times and Slack

Activity ES EF LS LF Slack
A 0 6 0 6 0*
B 0 4 5 9 5
C 6 9 6 9 0*
D 6 11 15 20 9
E 6 7 12 13 6
F 9 13 9 13 0*
G 9 11 16 18 7
H 13 19 14 20 1
I 13 18 13 18 0*
J 19 22 20 23 1
K 18 23 18 23 0*
• Determining the Critical Path

– A critical path is a path of activities, from the Start node

to the Finish node, with 0 slack times.

Critical Path: A–C– F– I– K

– The project completion time equals the maximum of the

activities’ earliest finish times.

Project Completion Time: 23 hours

 • Critical Path (A-C-F-I-K)

D 6 11 J 19 22
5 15 20 3 20 23
H 13 19
A 0 6 E 6 7 6 14 20
6 0 6 1 12 13
I 13 18
Start
C 6 9 F 9 13 5 13 18 Finish
3 6 9 4 9 13
K 18 23
B 0 4 G 9 11 5 18 23
4 5 9 2 16 18
Question

• What is the probability that project will be completed within 24

hours?

• What is the probability that project will be completed within 21

hours?

Solution Approach: Find z-score and determine the probability

z-value
• Measure of variability
• Both variance and standard deviation provide the same information

• z-score represents the number of standard deviations an observation (x) is

above or below the mean.
• The larger the z-value, the further away a value will be from the mean.
z = (a given value - mean) / standard deviation
Reading z-table
• Probability that the project will be completed within 24 hrs
2 = 2A + 2C + 2F + 2I + 2K
= 4/9 + 0 + 1/9 + 1 + 4/9
= 2
 = 1.414
z = (24 - 23)/ = (24-23)/1.414 = .71

From the Standard Normal Distribution table:

P(z < .71) = 0.5 + 0.2611 = .7611

• Probability the project will take MORE than 24 hours

1 - P(z < .71) = 1 - .7611 = .2389
• Probability that the project will be completed within 21 hrs
2 = 2A + 2C + 2F + 2I + 2K
= 4/9 + 0 + 1/9 + 1 + 4/9
= 2
 = 1.414
z = (21 - 23)/ = - 1.414

From the Standard Normal Distribution table:

P(z = -1.414) = 1 - 0.9214 = 0.0786

• Probability the project will take MORE than 21 hours

1 - P(z < -1.414) = 1 - 0.0786 = .9214
Assignment ‘A’
• Determine the expected time of completion and variance for each activity.
If the mean project completion time is 14 days with a std. dev. of 1.53,
what is the probability that the project will finish in 17 days and 12 days.
 Probabilistic
Time Estimates

Beta Distribution

Probability

a m b Time
Optimistic Mean Pessimistic
 Probabilistic Activity Times - Another Example

The Southern Textile Company has decided to

install a new computerized order processing system
that will link the company with customers and
suppliers online. In the past, orders for the cloth the
company produces were processed manually,
which contributed to delays in delivering orders and
resulted in lost sales. The company wants to know
how long it will take to install the new system.
We will briefly describe the activities and the
network for the installation of the new order
processing system.
 The Southern Textile Company - Activities
The network begins with three concurrent activities: The new
computer equipment is installed (activity 1); the computerized
order processing system is developed (activity 2); and people
are recruited to operate the system (activity 3). Once people
are hired, they are trained for the job (activity 6), and other
personnel in the company, such as marketing, accounting, and
production personnel, are introduced to the new system
(activity 7). Once the system is developed (activity 2), it is
tested manually to make sure that it is logical (activity 5).
Following activity 1, the new equipment is tested, and any
necessary modifications are made (activity 4), and the newly
trained personnel begin training on the computerized system
(activity 8). Also, node 9 begins the testing of the system on the
computer to check for errors (activity 9). The final activities
include a trial run and changeover to the system (activity 11)
and final debugging of the computer system (activity 10).
 Precedence relations and Activity Times– Textile Company

Task a m b Preceding Tasks

Task 1 6 8 10

Task 2 3 6 9

Task 3 1 3 5

Task 4 2 4 12 Task 1

Task 5 2 3 4 Task 2

Task 6 3 4 5 Task 3

Task 7 2 2 2 Task 3

Task 8 3 7 11 Task 1 Task 5 Task 6

Task 9 2 4 6 Task 1 Task 5 Task 6

Task 10 1 4 7 Task 4

Task 11 1 10 13 Task 7 Task 8 Task 9

Probabilistic Activity Times
The Southern Textile Company

Activity time estimates for figure

Probabilistic Activity Times
The Southern Textile Company

Network for order processing system installation

Probabilistic Activity Times
The Southern Textile Company

Earliest and latest activity times

Probabilistic Activity Times
Expected Project Time and Variance
■ Expected project time is the sum of the expected times of the
critical path activities.
■ Project variance is the sum of the critical path activities’ variances
■ The expected project time is assumed to be normally distributed
(based on central limit theorem).
■ In example, expected project time (tp) and variance (vp) interpreted
as the mean () and variance (2) of a normal distribution:

 = 25 weeks
2 = 62/9
= 6.9 weeks2
Probability Analysis of a Project Network

■ Using the normal distribution, probabilities are

determined by computing the number of standard
deviations (Z) a value is from the mean.

■ The Z value is used to find the corresponding

probability.
Probability Analysis of a Project Network
The Southern Textile Company

Normal distribution of network duration

Probability Analysis of a Project Network
The Southern Textile Company

Probability that the network will be completed in 30 weeks or less

Probability Analysis of a Project Network
The Southern Textile Company
What is the probability that the new order
processing system will be ready by 30 weeks?
 = 25weeks
 2 = 6.9
 = 6.9 = 2.63
x- Z value of 1.90 corresponds to
Z=
 probability of .4713 in Table A.1,
Appendix A. The probability of
30 - 25 completing project in 30 weeks or
Z= = 1.90 less:
2.63
(.5000 + .4713) = .9713.
Probability Analysis of a Project Network
The Southern Textile Company

Probability the network will be completed in 22 weeks or less

Probability Analysis of a Project Network
The Southern Textile Company

■ A customer will trade elsewhere if the new ordering system

is not working within 22 weeks. What is the probability that
she will be retained?
Z = (22 - 25)/2.63 = -1.14

■ Z value of 1.14 (ignore negative) corresponds to probability

of .3729 in Z Table.
■ Probability that customer will be retained is .1271 (.5000-
.3729)
Solved Problem 2

What is the probability of

completing the project in 23
weeks?
Solved Problem 2
Solved Problem 2

Using the Normal Distribution, we find that the

probability of completing the project in 23 weeks
or less is 0.9357.