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PERT

The document discusses the Program Evaluation and Review Technique (PERT) which is a network analysis technique used to estimate project duration when activity durations are uncertain. PERT was developed by the US Department of Defense and uses three time estimates for each activity to calculate the expected duration using a weighted average. The document provides an example project network diagram applying PERT calculations and estimating the probability of completing the project by certain dates.

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0% found this document useful (0 votes)
26 views

PERT

The document discusses the Program Evaluation and Review Technique (PERT) which is a network analysis technique used to estimate project duration when activity durations are uncertain. PERT was developed by the US Department of Defense and uses three time estimates for each activity to calculate the expected duration using a weighted average. The document provides an example project network diagram applying PERT calculations and estimating the probability of completing the project by certain dates.

Uploaded by

christian munemo
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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LECTURE 8

PROGRAM EVALUATION AND


REVIEW TECHNIQUE (PERT)
OUTLINE

• REVIEW MID TEST


• INTRODUCTION
• DEFINITION
• CONCEPT OF PERT
• PROJECT Y
• PERT CALCULATION
• ESTIMATING THE PROBABILITY OF
COMPLETION DATES
• EXERCISE
REVIEW MID TEST
INTRODUCTION

CPM and PERT are:

• Graphically display the precedence relationships &


sequence of activities

• Estimate the project’s duration

• Identify critical activities that cannot be delayed


without delaying the project

• Estimate the amount of slack associated with non-


critical activities
DEFINITION

(PERT) is an event-oriented NETWORK ANALYSIS


TECHNIQUE used to estimate project duration
WHEN individual ACTIVITY DURATION estimates
are highly UNCERTAIN.

PERT" developed by the United States


Department of Defense as a management tool
with an acronym "Program Evaluation and
Review Technique".
Background
In the 1950s, the U.S. Navy had a budget overrun and a schedule delay
of as much as 50% in the Polaris missile system project.
The main problem was the lack of any relevant historical data. The
project team—the U.S. Navy (the owner), Lockheed Aircraft
Corporation (the prime contractor), and Booz Allen Hamilton (the
management consultant team)—launched a joint research effort to
develop a tool to assist in the planning of the Polaris project.
The objective was to devise a method that predicts the completion
date of a project with a certain likelihood using the theory of
probability.
In 1958, this tool was developed under the name program evaluation
and review technique and later became known by its acronym, PERT.
The PERT system was adopted in its early days by the Department of
Defense (DoD) under the name program evaluation procedure (PEP).
CONCEPT OF PERT

• PERT uses a probabilistic time estimates

• PERT requires the user to SET THREE


DURATIONS that constitute the practical range
of the duration for each activity
Estimating assumptions on Set Duration

• An estimate is a qualified guess.

• Every estimate is based on assumptions.

• These estimate assumptions need to be specified so that the


basis of the estimate is known and validity of the
assumptions can be assessed.

• For example, a work effort estimate is usually based on a


level of skill and expertise. (If a lower level of skill and expertise is utilized then it is
likely that the task will require more effort. )
CONCEPT OF PERT

Formula
• To: Optimistic Duration
The optimistic duration is the amount of time the activity will take if
everything goes smoothly and efficiently
• Tm: Most Likely Duration
The Most Likely duration is the duration under normal scenario
• Tp: Pessimistic Duration
The pessimistic duration is the duration under the worst-case scenario

PERT weighted average =


optimistic time + 4X most likely time + pessimistic time
6
CONCEPT OF PERT

Example:

Assembling and Erecting the False work for an Elevated


Slab will most likely require 8 days. If all goes well,
without interruption, the duration may be cut to 10 days.
However, in the practically worst-case scenario, this
activity may take 24 days.

The preceding values are estimated by the


scheduler or project manager, who uses
his or her EXPERIENCE AND GOOD JUDGMENT
to do so
CONCEPT OF PERT

Example:
where optimistic time= 8 days,
most likely time = 10 days, and
pessimistic time = 24 days

PERT weighted average =


8 workdays + 4 X 10 workdays + 24 workdays = 12 days
6
Therefore, you’d use 12 days on the network diagram instead of 10
when using PERT for the above example
Project Y

Optimistic Most likely Pessimistic


Activity Description
time time time
A Develop product specifications 2 4 6
B Design manufacturing process 3 7 10
C Source & purchase materials 2 3 5
D Source & purchase tooling & equipment 4 7 9
E Receive & install tooling & equipment 12 16 20
F Receive materials 2 5 8
G Pilot production run 2 2 2
H Evaluate product design 2 3 4
I Evaluate process performance 2 3 5
J Write documentation report 2 4 6
K Transition to manufacturing 2 2 2
PERT CALCULATION

• A typical beta distribution is shown below, note that it has


definite end points
• The EXPECTED TIME (ET) for finishing each activity is a weighted
average

optimistic  4most likely   pessimistic


Exp. time 
6
Calculating Expected Task Times
optimistic  4most likely  pessimistic
Expected time 
6
Optimistic Most likely Pessimistic Expected
Activity
time time time time
A 2 4 6 4
B 3 7 10 6.83
C 2 3 5 3.17
D 4 7 9 6.83
E 12 16 20 16
F 2 5 8 5
G 2 2 2 2
H 2 3 4 3
I 2 3 5 3.17
J 2 4 6 4
K 2 2 2 2
Network Diagram with Expected
Activity Times
Estimated Path Durations through the
Network

Activities on paths Expected duration


ABDEGHJK 44.66
ABDEGIJK 44.83
ACFGHJK 23.17
ACFGIJK 23.34

• ABDEGIJK is the expected critical path & the


project has an expected duration of 44.83 weeks
Adding ES and EF to Network
Gantt Chart Showing Each Activity Finished at
the Earliest Possible Start Date
Adding LS and LF to Network
Gantt Chart Showing the Latest Possible Start Times if
the Project Is to Be Completed in 44.83 Weeks
Estimating the Probability of
Completion Dates
• Standard deviation and variance
– Standard deviation (SD) is the average deviation
from the estimated time
• SD=(TP-T0)/6 {read as (pessimistic-optimistic)/6}
• As a general rule, the higher the standard deviation the
greater the amount of uncertainty

– Variance (V) reflects the spread of a value over a


normal distribution
 Tp  To 
2

• V=SD2 (Standard deviation squared) or σ  


2

 6 
Project Activity Variance
Activity Optimistic Most Likely Pessimistic Variance
A 2 4 6 0.44
B 3 7 10 1.36
C 2 3 5 0.25
D 4 7 9 0.69
E 12 16 20 1.78
F 2 5 8 1.00
G 2 2 2 0.00
H 2 3 4 0.11
I 2 3 5 0.25
J 2 4 6 0.44
K 2 2 2 0.00
Variances of Each Path through the
Network
Path Activities on Path Variance
Number Path (weeks)
1 A,B,D,E,G,H,J,k 4.82

2 A,B,D,E,G,I,J,K 4.96

3 A,C,F,G,H,J,K 2.24

4 A,C,F,G,I,J,K 2.38
PROBABILITY OF COMPLETION
Assume Calculating the probability of finishing the project in 48 weeks

• Use the z values in Appendix B to determine probabilities


 48 weeks  44.66 weeks 
• e.g. probability for path 1 is z     1.52
 4.82 

Path Activities on Path z- Probability


Numbe Path Variance value of
r (weeks)
Completion
1 A,B,D,E,G,H,J, 4.82 44.66 1.5216 0.9357
k
2 A,B,D,E,G,I,J,K 4.96 44.83 1.4215 0.9222
3 A,C,F,G,H,J,K 2.24 23.17 16.5898 1.000

4 A,C,F,G,I,J,K 2.38 23.34 15.9847 1.000


Exercise

Compute the following nine values:


With a Probability of Finishing Project is Total Amount of Expected
Duration
1. The probability that the project will finish by the end of day 32
2. The probability that the project will finish by the end of day 34
Exercise
Expected Time: optimistic time + 4X most likely time + pessimistic time
6

• Standard deviation and variance


• SD=(TP-T0)/6 {read as (pessimistic-optimistic)/6}

– Variance (V) reflects the spread of a value over a normal


distribution
• V=SD2 (Standard deviation squared)
THANK YOU

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