Program Evaluation & Review Technique

( PERT):
Lack of knowledge & information about the work
Uncertainty about
The scope & nature of work
Work content
Working conditions
Productivity of resources
No accurate estimates of time & cost
Suitable for non-repetitive type of projects

Probabilistic & event oriented scheduling technique
Scheduling by PERT:
Only A-O-A network can be used

Determination of event times & slack

Identification of critical events & critical path

Determination of probability of project
completion (an event) by given date

PERT analysis:
Activity time estimates
Three time estimates
Optimistic time (t
o
)
Pessimistic time (t
p
)
Most likely time (t
m
)
Beta distribution

Expected/ mean
duration of an activity

Variance of an activity

6
. 4
p m o
e
t t t
t
+ +
=
2
2
6
|
|
.
|

\
|

=
o p
t t
o
PERT analysis
Project completion (event) time:

Governed by Longest (Critical) path
Normal probability distribution

Average Expected project duration
Te = EOT of the last event
Variance & standard deviation of project duration
Var
proj
= var along Longest (Critical) Path

proj proj
var = o
PERT analysis
Probability calculations:

Normal value
z = (Ts Te)/
proj

Area under cumulative normal distribution
curve gives the probability of completing the
project on or before the target time Ts
Activity Preceding
activity
to tm tp
A - 2 3 5
B - 3 5 7
C - 6 7 9
D A 5 7 9
E A 3 4 7
F B 1 2 3
G C 7 10 13
H D 3 5 8
K B,G 5 8 9
L B,G 2 4 6
M H 4 6 8
N E,F,K 1 3 4
P M,N 3 6 8
Q L 8 9 10
PERT Problem
Determine the critical path & the expected project
duration
Activities A,B,C,E,F,G & K form one work package.
What is the probability of completing this work
package within 23 weeks?
What is the probability of completing the project
within 30 weeks?
What is the probability of completing the project
within 35 weeks?
What is the project duration for 90 % certainty of on-
time project completion?
Activity Preceding
activity
to tm tp te
A - 2 3 5 3.17 0.25
B - 3 5 7 5 0.44
C - 6 7 9 7.16 O.25
D A 5 7 9 7 0.44
E A 3 4 7 4.33 0.44
F B 1 2 3 2 0.11
G C 7 10 13 10 1
H D 3 5 8 5.16 0.69
K B,G 5 8 9 7.67 0.44
L B,G 2 4 6 4 0.44
M H 4 6 8 6 0.44
N E,F,K 1 3 4 2.83 0.25
P M,N 3 6 8 5.83 0.69
Q L 8 9 10 9 0.11
90
Average expected project duration, Te = 33.49
CP: 10-40-60-80-100-110 (C-G-K-N-P)
Var
proj
= 2.63 ;
proj
= 1.62
Project costs:
Direct costs
Attributed to a particular activity
Indirect costs
Cannot be attributed to an activity
Project overheads
Penalties / incentives

Time-cost trade-off
Determining the minimum possible total cost for a particular
project duration.
Time- cost trade-off:
Determining the minimum possible total cost for a
particular project duration.

Compression:
Reducing project duration
Compressing critical activities
Increase in Direct cost
Reduction in Indirect cost

Crashing:
Ultimate stage of compression
Time - Cost trade-off:
Project duration
Indirect Cost
Total Cost
Minimum
Total Cost
Optimum PD
Direct Cost
Cost
Normal PD
Minimum PD
Steps in compression:
Determine activity compression potential &
cost slope
Draw network for normal durations
List all paths, with their durations
Identify CP
Compress activities along CP (s)
Continue till at least one CP is fully
compressed (crashed)
Points to remember:
Compress activity (activities) along CP (s)
only
Compress activity (activities) with minimum
cost slope (minimum combined cost slope)
Must compress an activity along each CP
At any stage, do not compress more than one
activity along any CP
Activity Preceding
activity
Succeeding
activity
NT CT NC CC
A - C,D 6 4 64 76
B - E,F 4 3 30 33
C A G 9 5 54 74
D A H 3 2 28 34
E B H 7 4 70 91
F B K,M 5 4 82 92
G C L 4 4 47 47
H D,E M 6 5 39 45
K F N 3 2 27 30
L G - 9 6 86 98
M F,H - 5 3 55 65
N K - 2 1 27 29
Indirect cost is Rs. 10000 per week
Numerical problem:
A(6)
START FINISH
E(7)
D(3)
C(9)
K(3)
H(6)
G(4)
N(2)
M(5)
L(9)
B(4)
F(5)
Paths
Duration along path @ each stage
0 1 2 3 4
A-C-G-L 28* 25* 22* 21* 19*
A-D-H-M 20 20 20 20 18
B-E-H-M 22 22 22* 21* 19*
B-F-M 14 14 14 13 11
B-F-K-N 14 14 14 13 13
A-O-N Network
(normal durations)
Paths
Duration along path @ each stage
0 1 2 3 4
A-C-G-L 28* 25* 22* 21* 19*
A-D-H-M 20 20 20 20 16
B-E-H-M 22 22 22* 21* 19*
B-F-M 14 14 14 13 11
B-F-K-N 14 14 14 13 13
H
Compression table:
Stage Act CS Dur
of
comp
PD Incre
ase
in DC
DC IC Penal
ty
TC
0 - - - 28 - 609 280 889
1 L 4 3 25 12 621 250 871
2 C 5 3 22 15 636 220 856
3 C 5
1

21

08

644

210



854
B 3
4 A 6
2

19

22

666

190

856
M 5
NPD
Min
PD
OPD
A(6)
START FINISH
E(7)
D(3)
C(5)
K(3)
H(6)
G(4)
N(2)
M(5)
L(6)
B(3)
F(5)
A(4)
START FINISH
E(7)
D(3)
C(5)
K(3)
H(6)
G(4)
N(2)
M(3)
L(6)
B(3)
F(5)
A-O-N Network
(Optimum PD)
A-O-N Network
(Minimum PD)