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Applying The PERT Techn

The document discusses using the PERT technique to evaluate uncertainty in project timelines. It describes using three estimates for each task duration and calculating expected durations and standard deviations. It also covers calculating the likelihood of meeting targets using z-values and probabilities, and using Monte Carlo simulation as an alternative approach.

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sherril siddhardh
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16 views

Applying The PERT Techn

The document discusses using the PERT technique to evaluate uncertainty in project timelines. It describes using three estimates for each task duration and calculating expected durations and standard deviations. It also covers calculating the likelihood of meeting targets using z-values and probabilities, and using Monte Carlo simulation as an alternative approach.

Uploaded by

sherril siddhardh
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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APPLYING THE

PERT TECHNIQUE
UNIT III
AGENDA
• Using PERT to evaluate the effects of uncertainty

• Using expected durations

• Activity standard deviations

• The likelihood of meeting targets

• Calculating the standard deviation of each project event

• Monte Carlo Simulation

• Critical Chain Concepts


USING PERT TO EVALUATE THE EFFECTS OF
UNCERTAINTY
 PERT was developed to take account of the uncertainty
surrounding estimates of task durations.
 It was developed in an environment of expensive, high-risk and
state-of-the-art projects
 The method is very similar to the CPM technique.
 instead of using a single estimate for the duration of each task,
PERT requires three estimates.
THREE ESTIMATES
 Most likely time: the time we would expect the task to take
under normal circumstances. We shall identify this by the
letter m.

 Optimistic time: the shortest time in which we could expect to


complete the activity. We shall use the letter a for this.

 Pessimistic time: the worst possible time, allowing for all


reasonable eventualities but excluding ‘acts of God and warfare’
We shall call this b.
CALCULATIONS
 PERT then combines these three estimates to form a single
expected duration, te, using the formula
 te = (a+ 4m + b ) / 6
USING EXPECTED DURATIONS
 The expected durations are used to carry out a forward pass
through a network, using the same method as the CPM
technique. Fig. Pert Network After Forward Pass

PERT EVENT LABELLING


ACTIVITY STANDARD DEVIATIONS

 A quantitative measure of the degree of uncertainty of an


activity duration estimate may be obtained by calculating the
standard deviation s of an activity time, using the formula

s = a-b/6
 It can be used as a ranking measure of the degree of
uncertainty or risk for each activity.
CONT..
 The PERT technique uses the following three-step method for
calculating the probability of meeting or missing a target date:
 calculate the standard deviation of each project event;
 calculate the z value for each event that has a target date;
 convert z values to a probabilities.
THE LIKELIHOOD OF MEETING TARGETS
 The main advantage of the PERT technique is that it provides a
method for estimating the probability of meeting or missing
target dates.
CONT..
 The standard deviation for event 3 depends solely on that of
activity B. The standard deviation for event 3 is therefore 0.33.
 For event 5 there are two possible paths, B + E or F.
 The total standard deviation for path B + E is √(0.332 + 0.502) =
0.6
 and that for path F is 1.17; the standard deviation for event 5 is
therefore the greater of the two, 1.17.
CALCULATING THE Z VALUES
 The z value is calculated for each node that has a target date.
z = (T – te) / s
 where t e is the expected date and T the target date.

 The z value for event 4 is (10 – 9.00)/0.53 = 1.8867.


CONVERTING Z VALUES TO PROBABILITIES

 The z value for the project completion (event 6) is 1.23. Using


Figure 7.8 we can see that this equates to a probability of
approximately 11%, that is, there is an 11% risk of not meeting
the target date of the end of week 15.
MONTE CARLO SIMULATION
 As an alternative to the PERT technique, we can use Monte
Carlo simulation approach.
 Monte Carlo simulation are a class of general analysis
techniques that are valuable to solve any problem that is
complex, nonlinear, or involves more than just a couple of
uncertain parameters.
THE MAIN STEPS INVOLVED
for a project consisting of n activities are as follows:
● Step 1: Express the project completion time in terms of the
duration of the n activities (xi, i=1, n and their dependences as a
precedence graph, d = f(x1, x2, ... , xn).
● Step 2: Generate a set of random inputs, xi1, xi2, .... , xin using
specified probability distributions.
● Step 3: Evaluate the project completion time expression and store
the result in di.
● Step 4: Repeat Steps 2 and 3 for the specified number of times.
● Step 5: Analyze the results di, i=1,n ; summarize and display using
a histogram
 Risk profile for an activity generated using Monte Carlo
simulation
ADVANTAGE OF MONTE CARLO SIMULATIONS OVER
A MANUAL APPROACH

 Monte Carlo simulation is expected to give a more realistic


result than manual analysis of a few cases, especially because
manual analysis implicitly gives equal weights to all scenarios.

 In the manual approach, a few combinations of each project


duration are chosen (such as best case, worst case, and most
likely case), and the results recorded for each selected scenario.
THANK YOU

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