Production and Project Management

Course code: ChEg 5104

Credit Hours: 3

Aregawi G/Eyesus (Assistant Professor)

Email: [email protected] Cellphone: +251968925386

April 15, 2025

 Chapter 6 Project Management

6.1 Basics of project management - Objectives & Classifications

6.2 Project Management Stages

6.3 Scheduling models – Gantt chart

6.4 Priority decision rule Network Models (CPM & PERT)

Learning Objectives of Project Management

After completing this chapter 6, the students will be able to:

• Describe the Objectives of Project and Project management

• Discuss the Project Management Stages

• Construct Gantt chart using Project management Software

• Construct and Compute Network Models (CPM & PERT)

6.1 Basics of Project Management- Objectives & Classifications

Definition of Project:
 “Project is a temporary endeavor undertaken to produce a unique
product, service, or result” (Project Management Institute, 2008).
 Operations, on the other hand, is work done in organizations to sustain
the business. Projects are different from operations in that they end
when their objectives have been reached or the project has been
terminated.

 “ Project is a non-routine, non-repetitive complex economic

activity that requires investments or commitments of scarce
resources to provide facilities, goods, services, etc. whose
benefits would exceed the committed investments or resources.”

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Elements of a project
• Non-routine/ non-repetitive
• One time operational activity
• Requires investment (allocation of scarce resources)
• It has a sense of uniqueness
• Requires a unique organization (as opposed to
functional/institutional organization)

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Examples of Project
• A college campus upgrades its technology infrastructure to provide
wireless Internet access
• A medical technology firm develops a device that connects to smart
phone.
• A school implements new government standards for tracking
student achievement
• Lean Manufacturing Transformation in Consumer Electronics
• The automobile industry develops standards for electric cars
• A government group develops a program to track child
immunizations
•1 Implementation of Robotic Automation in Automotive Assembly
 The Triple Constraint of Project Management Objectives

Successful project management

means meeting all three
goals/Objectives (scope, time,
and cost) – and satisfying the
project’s sponsor!

However, quality is the

quadruple constraint

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Project Management-Project Stakeholders
 Stakeholders are the people involved in or affected by
project activities
 Stakeholders include:

• The project sponsor • Customers

• Users
• The project manager • Suppliers
• The project team • And yes - opponents to the
project!
• Support staff

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Skill Requirements for Effective Project Management

Conflict Resolution
Domain Knowledge
Creativity and Flexibility
Ability to Adjust to Change
Good Planning
Negotiation

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 6.2 Project Management Stages
The World Bank model Project life cycle or stages
Identification

Preparation
Evaluation

Implementation Appraisal/
financing
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 I. Identification
 The first phase of the cycle is concerned with identifying
project ideas that appear to represent a high priority use
of the country’s resources to achieve an important
development objective.

II. Preparation
 Once a project idea has passed the identification “test“
it must be advanced to the point at which a firm decision
can be made whether to or not to proceed with it.
 This requires a progressive refinement of the design of
the project in all its dimensions technical, economical,
financial, social, institutional and so on.
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 Sources of Project Ideas
Macro-level Sources of Project Ideas
1) National, regional, sectoral plan
e.g. reduce disparity of regional dev’t.
 the need is the source of project idea
Decision by macro-planners to reduce regional dev’t imbalances.
2) Constrains in the dev’t effort
e.g. lack of infrastructure, health centers, roads, ports, power, financial
institutions.
3) Self-sufficiency objective in critical resources
e.g. in supply of food, finding of oil/petroleum.
4) Events such as drought, flood Natural calamities/disasters.

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Micro-level Sources of Project Ideas

1) Identification of unsatisfied demand

 Can be of macro-level magnitude
e.g. Cement
2) Existence of unused/underutilized natural or human resources.
3) Response to gov’t incentives
• e.g. Charge in mortgage interest rate triggers construction
of houses  demand for construction materials.
• 4) Local group initiative for economic independence.
e.g. Source of drinking water, feeder road,
power supply.

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III. Appraisal

 Before approving a loan external agencies normally require a formal process

of appraisal to assess the overall soundness of the project and its readiness for
implementation for an internally generated and financed investment.
 An explicit appraisal is necessary or at least a desirable, part of the decision
making process before funds are committed.
 Validate technical and financial assumptions.
 Assess risks (e.g., political instability, climate vulnerabilities).
 Finalize project scope, budget, and timelines.

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 IV. Implementation
 The implementation stage covers the actual development or
Construction of the project, up on the point at which it becomes fully
operational.
 It includes monitoring of all aspects of the work or activity as it
proceeds and supervision by “over sight” agencies within the country
or by external lenders.
V. Evaluation
 The post evaluation of a completed projects to determine whether
the objectives have been achieved as planned or not; and to draw
lessons from experience with the project that can be applied to
similar project in the future.
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Project Success Factors
i. Financially sound, feasible and affordable project
ii. The country risks must be manageable
iii. Strong government support
iv. The project must rank high on the host government’s list
v. The legal framework must be stable
vi. Efficient administrative framework
vii. Fair and transparent bidding procedure
viii.Structured transactions
ix. Experienced and reliable sponsors
x. Financial strength of sponsors
xi. Experienced and resourceful construction contractors
xii. Adequate financial structure
xiii.Co-ordinated contractual framework
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Why do projects fail?

 Lack of clarity on what’s really needed

 Inadequate planning (the devil is in the details)
 Ineffective process to deal with changes or problems
 Lack of willingness or discipline to monitor progress
 Unresolved conflicts
 Lack of committed, dedicated resources
 Lack of understanding of project management

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Project Planning and Control
To plan a project, the total scope of work must be:
 Identified
 Subdivided into manageable segments
 Assigned to individuals responsible to do the work
 Documented

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Work Breakdown Structure (WBS)
 It is a methodology for converting a large-scale project into
detailed schedules for its thousands of activities for
planning, scheduling, and control purpose
 The objective of developing a WBS is to study the
elemental components of a project in detail
 WBS is the breakdown of the total project task into components
to establish:
How work will be done?
How people will be organized?
How resources will be allocated?
How progress will be monitored?

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Using a WBS, a large project may be broken down into smaller subprojects
which may, in turn, be further subdivided into another, lower level of more
detailed sub component activities, and so on.
Eventually, all the tasks for every activity are identified, commonalities are
discovered, and unnecessary duplication can be eliminated.
Thus by applying the WBS approach, the overall project planning and control
can be improved.
 Individual components in a WBS are referred to as WBS elements and the hierarchy of
each is designated by a level identifier.
 Elements at the same level of subdivision are said to be the same WBS level.
 Descending levels provide increasingly detailed definition of project tasks. The
complexity of project and the degree of control desired determine the number of levels
in the WBS.
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Each WBS component is successively broken down into smaller details
at lower levels.
 Level 1: This level contains only the final project purpose.
This item should be identifiable directly as an organizational
budget item.
 Level 2: This contains the major subcomponents of the
project. This subdivision is usually identified by their
contiguous location or by their related purposes.
 Level 3: Contains definable components of the level 2
subdivisions.

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 Example
 Draw the bar chart for "finalization of design and work
orders" for a building project.
Activity Description Time of
Completion
A Site selection and survey 4 weeks
B Design 6 weeks
C Preparation of drawings 3 weeks
D Preparation of specification
and tender document 2 weeks
E Tendering 4 weeks
F Selection of contractor 1 week
G Award of work order 1 week
 Project Breakdown Structure

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 Project Breakdown Structure

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 Level 1
Construction
Project

Level 2
Site Exterior Interior Structural
Foundation
Preparation Finishing Finishing Framework

Level 3
Foundation
Landscaping Site Clearing,, Excavation
Construction,

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Project Organization
 Like any organization, projects can be managed and controlled by using
different type of organizational structure.
 Before selecting an organizational structure, the project team should assess
the nature of the job to be performed and its requirements.
The structure may be defined in terms of functional specializations,
departmental proximity, standard management boundaries, operational
relationships, or product requirements
Large and complex projects should be based on well-designed structures that
permit effective information and decision processes.

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 6.3 Scheduling models – Gantt chart

Bar/Milestone/Gantt Charts

 The history of project planning techniques can be accurately

traced back to World War I when an American, Henry
Gantt, designed the bar chart as a visual aid for planning
and controlling his projects.
 The beginning and the end of each bar represent the time
of start and the time of finish of that activity

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 Once the project has started the Gantt chart can further be
used as a tool for project control.
 This is achieved by drawing a second line under the planned
schedule to indicate activity progress.
 The relative position of the progress line to planned line
indicates percentage complete and remaining duration, while the
relative position between the progress line and Time now
indicates actual progress against planned progress.

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Example of Gantt Chart
Month
0 2 4 6 8 10
| | | | |
Activity
Design house
and obtain
financing
Lay foundation
Order and
receive
materials

Build house

Select paint

Select carpet

Finish work
1 3 5 7 9
Months
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Example: Draw the bar chart for "finalization of design and
work orders" for a building project.

Completi
Description Start on time
Activity Date (Weeks)
A Site selection and survey 31-Mar 4
B Design 31-Mar 6
C Preparation of drawings 4-Apr 3
Preparation of specification
D
and tender document (D) 6-Apr 2
E Tendering 8-Apr 4
F Selection of contractor 12-Apr 1
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G Award of work order 13-Apr 1
Bar chart for a building Project

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 31-Mar 2-Apr 4-Apr 6-Apr 8-Apr 10-Apr 12-Apr 14-Apr

Site selection and survey (A) 4

Design (B) 6

Preparation of drawings © 3

Preparation of specification and tender document (D) 2

Tendering € 4

Selection of contractor (F) 1

Award of work order (G) 1

 The benefits of Gantt chart can be clearly seen not only are
the calculations simple but it combines all the above
information on one page.
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6.4 Priority decision rule Network Models (CPM & PERT)

 The most common network scheduling methods are Critical Path

Method (CPM) and Program Evaluation and Review Technique (PERT).
 Two approaches may be used for the assessment of duration for
activity completion.
 Both methods (CPM and PERT) are extensively used as dynamic control
tools in the management of a large project.
 They give the project manager a comprehensive picture of the project
status at any time.

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Network Diagram
 For a project plan to be effective it must equally address
the parameters of activity time and network logic.
 As project becomes larger and more complex, the Gantt
chart was found to be lacking as a planning and control tool,
because it could not indicate the logical relationships
between activities.
In the 1950’s feedback from industry and commerce
indicated that project cost and time overruns were all too
common.
With these shortcomings in mind, network planning
techniques were developed.
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 In network modeling of projects, the arrow diagram is of primary
importance. Some of the advantages of network diagram or arrow
diagram are:
 It clearly shows the inter-relationship between events.
 The project is seen as integrated whole, thus making it easier
for control.
 It can be used even for highly complicated projects consisting
of a large number of activities.
 It directly indicates the time required in between two
activities.
 Event : it is defined to be an instant in time. In a project, an event, may mark the
initiation of an activity, the completion of an activity, or the time after which an
activity may be initiated.
 Design completed, pipe line laid, electricity installed, etc are examples of events. It

is represented by a circle ‘ o’ in a network which is also known as a node or

connector.
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An event can be further classified into the following categories:
Merge event: When more than one activity come and join an
event, such event is known as merge event.
Burst event: When more than one activity leave an event, such
event is known as a burst event.
Merge and burst event: An activity may be a merge and burst
event at the same time as with respect to some activities it
can be a merge event and with respect to some other
activities it may be a burst event.

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Different types of event formation

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 An arrow is commonly used to represent an activity with its head
indicating the direction of progress in the project.
 Activity: Any individual operation, which utilizes resources and
has a beginning and an end.
 A project may be divided into activities that are time consuming
tasks or subprojects like: assembly of parts, mixing of concrete,
preparing budget, etc.
 Predecessor activity: Activities that must be completed
immediately prior to the start of another activity
 Successor activity: Activities that cannot be started until one or
more of other activities are completed, but immediately succeed
them
 Dummy activity: An activity which does not consume any kind of
resource but merely depicts the technological dependence
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 It may be noted that the dummy activity is inserted in the network to
clarify the activity pattern in the following two ways:
o To make the activities with common starting and finishing points
distinguishable, and
o To identify and maintain the proper precedence relationship
between activities that are not connected with arrows
 For example, consider a situation where A and B are concurrent
activities, C is dependent on A, and D is dependent on A and B both.
 Such a situation can be handled by using a dummy activity

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Rules for Drawing Network Diagram

 In order to draw a network diagram, the following general

rules have to be considered:
 Each activity is represented by one and only one arrow in
the network:
• This implies that no single activity can be represented
twice in the network.
• This is to be distinguished from the case where one
activity is broken into segments.

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 No two activities can be identified by the same events:
For example, activities a and b have the same end events.
The procedure is to introduce a dummy activity either
between a and one of end events or between b and one of
the events.
• Modified representations after introducing a dummy
activity d is shown in figure

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• As a result of using the dummy, activities a and b can now be
identified by unique end events.
• It must be noted that a dummy activity does not consume any
time or resource.
 Check the precedence relationship: In order to ensure the
correct precedence relationship in the arrow diagram, the
following questions must be checked whenever any activity is
added to the network.
• What activity must be completed immediately before this
activity can start?
• What activities must follow this activity?
• What activities must occur simultaneously with this activity?
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 Apart from this, a few important suggestions for drawing good networks are:
• Try to avoid arrows which cross each other.
• Use straight arrows.
• Do not attempt to represent duration of activity by arrow length.
• Use arrows from left to right (or right to left). Avoid mixing two directions,
vertical and standing arrows may be used if necessary.
• Use dummies freely in rough draft but final network should not have any
redundant dummies.
• The network has only one entry point (start event) and one point of emergence
(end event).

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Example-1. Draw a network for the simple project of erection of steel works for a shed. The various
elements of project are as under:

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 Example-2
Draw a network for the
project with the information
given in the table

Activity Description Pre Time

(Weeks)
A Excavate - 2

B Lay the foundation A 4

C Put up the rough wall B 10
D Put up the roof C 6
E Install the exterior plumbing C 4
F Install the interior plumbing E 5
G Put up the exterior siding D 7
H Do the exterior painting E,G 9
I Do the electrical work C 7
J Put up the wall board F,I 8
K Install the flooring J 4
L Do the interior painting J 5
M Install the exterior fixtures H 2
N Install the interior fixtures K,L 6

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 5
G

D
H
E
D1 M
A B C
8
4 6 10 13
1 2
3

I F
N

11
J L
7
D2
9

12

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 Critical Path Method (CPM)
 The Critical Path Method (CPM) was developed in 1957 by
Remington Rand Univac as a management tool to improve the
planning and control of a construction project.
 CPM was initially set-up to address the time cost trade-off
dilemma often presented to project managers, where there is a
complex relationship between project time to complete and cost
to complete.
 CPM enables the planner to model the effect various project time cycles
have on direct costs.
 Shortening the project duration will reduce indirect costs, but may
increase the direct costs.
 This technique is often called Project crashing or acceleration,

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Time Estimate and Critical Path in Network
Analysis:
 Once the network of a project is constructed, the time
analysis of the network becomes essential for planning
various activities of the project.
 An activity-time is a forecast of the time an activity is
expected to take from its starting point to its completion
under normal conditions.

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The main objective of the time analysis is to prepare a planning
schedule of the project, which should include the following factors:
 Total completion time for the project.
 Earliest time when each activity can start.
 Latest time when each activity can be started without delay of the
total project.
 Float for each activity, i.e., the amount of time by which the
completion of an activity can be delayed without delaying the total
project completion.
 Identification of critical activities and critical path.

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 The following notations are used for the basic
scheduling computation techniques:
(i, j ) = Activity (i, j) with tail event i and head event j.

TE or Ei = Earliest occurrence time of event i.

TL or L j = Latest allowable occurrence time of event j.

D ij = Estimated completion time of activity (i , j)

( E S ) ij = Earliest starting time of activity (i , j)

( E f ) ij = Earliest finish time of activity (i , j)

( LS ) ij = Latest starting time of activity (i , j)

( L f ) ij = Latest finish time of activity (i , j)

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CPM example
For the data given :
a)Construct the network diagram activity Name Duration
1-2 A 4
b)Determine
1-3 B 1
 the critical activities,
2-4 C 1
 Critical Path and
3-4 D 1
 the project completion time 3-5 E 6
c)Compute 4-9 F 5
 total float and 5-6 G 4
 free float of the non-critical activities 5-7 H 8
6-8 I 1
7-8 J 2
8-10 K 5
1 9-10 L 7
Thus the basic scheduling computation can be put under the following two
categories.
i) Forward Pass Computations: Before starting computations, the
occurrence time of initial network event is fixed. Then, the forward
pass computation yields the earliest start and earliest finish time for
each activity (i, j), and indirectly the earliest expected occurrence
time for each event. This is mainly done by using the following steps:

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 Step 1. The computations begin from the ‘start’ node and move
towards the ‘end’ node.
Step 2.
a) Earliest starting time of activity (i, j) is the earliest event time of
the tail end event i.e.,

( E S ) ij  E i
b) Earliest finish time of activity (i, j) is the earliest starting time
plus the activity time. i.e.,

( E f ) ij  ( E S ) ij  Dij
or

( E f ) ij  Ei  Dij

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 c) Earliest event time for event j is the maximum of the earliest
finish times of all activities ending into that event. That is,
Ej  max.i[(Ef )i jfor all immediate predecessor of (i, j) ]or Ej  max.i[Ei  Di j]
The computed ‘E’ values are put over the respective circles
representing each event.

ii) Backward Pass Computations

 The latest event time, (L) indicates the time by which all activities
entering into that event must be computed without delaying the
computation of the project.
 These can be computed by reversing the method of calculation used
for earliest event times. This is done in the following steps:

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 Step 1. For ending event assume EL
Remember that all E’s have been computed by forward pass computations.
Step 2. Latest finish time of activity (i, j) is equal to the latest event time of event j. i.e.,

( L f ) ij  L
Step 3. Latest starting time of activity (i , j) = the latest
completion time of activity (i , j) – the activity time, or
( LS ) ij  ( L f ) ij  Dij
or

( LS )ij  L j  Dij
Step 4. Latest event time for event I is the minimum of the latest
start time of all activities originating from the event, i.e.,
Li  min. j [(LS )i jfor all immediate successors of (i, j)]  min. j[(Lf )i j - Di j]  min. j[ L j  Dij ]

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 Determination of Float and Slack Times
 Total float: The amount of time by which the completion of an
activity could be delayed beyond the earliest expected completion
time without affecting the overall project duration time.
 Mathematically, the total float of an activity (i , j) is the difference
between the latest start time and the earliest start time of that
activity. Hence the total float for an activity (i , j), denoted by
(T f ) ij  ( Latest start  Earliest start)
(T f ) ij  ( LS ) ij  ( E S ) ij
 Event slacks: For any given event, the event slack is defined
as the difference between the latest event and earliest
event times. Mathematically, for a given activity (i, j),
Head event slack  L j  E j
Tail event slack  Li  Ei
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Determination of the Critical Path
i. Critical event: Since the slack of an event is the
difference between the latest and earliest event
times. i.e.,

Slack(i)  Li  Ei
the events with zero slack times are called critical
events. In other words, the event i is said to be critical
if
Ei  Li

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ii) Critical activity: Since the difference between the latest start
time and earliest start time of an activity is usually called as
total float, the activities with zero total float are known as
critical activities.
In other words an activity is said to be critical if a delay in its
start will cause a further delay in the completion date of the
entire project.
Obviously, a non-critical activity is such that the time between its
earliest start and its latest completion dates (as allowed by
the project) is longer than its actual duration. In this case,
non-critical activity is said to have a slack or float time.

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iii) Critical path: The sequence of critical activities in a network is
called the critical path.
The critical path is the longest path in the network from the
starting event to ending event and defines the minimum time
required to complete the project.
The length of the path is the sum of the individual times of the
activities lying on the path.
 If the activities on a critical path are delayed by a day, the
project would also be delayed by a day unless the times of the
future critical activities are reduced by a day by different
means.
 The critical path is denoted by double or darker lines to make
distinction from the other non-critical paths.
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 Thus the critical path has two features:
 If the project has to be shortened, then some of the
activities on that path must also be shortened. The application
of additional resources on other activities will not give the
desired result unless that critical path is shortened first.
 The variation in actual performance from the expected
activity duration time will be completely reflected in one-to-
one fashion in the anticipated completion of the whole project.

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 Lf
Es
10 15
9
5 10
4
C=1 4 F=5 9
A=4 2 L=7
0 22
1 D=1 16 10
0
11 K=5 22
B=1 E=6
3 5 G=4 6 I=1 8
1 7 17
1 H=8 J=2
7 7 17
15
15

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Program Evaluation and Review Techniques (PERT)
The US Navy set up a development team with
the Lockheed Aircraft Corporation, and a
management consultant Booz Allen &
Hamilton, to design PERT as an integrated
planning and control system to manage their
Polaris Submarine project.
The PERT technique was developed to apply a
statistical treatment to the possible range of
activity time durations
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A three time probabilistic model was developed, this includes:
Optimistic time t0 limit of completion time if every thing goes all-right.

Pessimistic time t p limit of completion time if every thing goes all-wrong

(in case climatic conditions, explosions, accidents,
etc., come into effect to retard the activity).
Most likely time t l the duration that would occur most often if the activity
was repeated many times under the same conditions.

The three times were imposed on a normal distribution to

calculate the activity’s expected time te as,

( t o  4t l  t p )
te 
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Example
• A product development project has a list of tasks to be performed and whose time
estimates are given as follows:
Activit Activity To Tm Tp
y (i,j) Name a) Draw the project Network
1-2 A 4 6 8 b) Find the critical path and
1-3 B 2 3 10 critical activities
1-4 C 6 8 16 c) Determine the project
completion time
2-4 D 1 2 3
3-4 E 6 7 8 d) Compute total float and free
float of the non-critical
3-5 F 6 7 14 activities
4-6 G 3 5 7
4-7 H 4 11 12
5-7 I 2 4 6
1 6-7 J 2 9 10
 9
6 11
6 2 11 16
2
0 9 16
1 5 6
0 4
4 8
7 10
24
4 3 8 7 24
4
4
5
20
12

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 Earliest Latest
Activity (i,j) Start Finish start Finish Total Float Free float
Activity
Name Duration (Es)ij=Ei Ef=Ei+Dij Ls=Lf-Dij Lf=(Lf)ij Tf=Ls-Es FF=Ej-Ei-Dij Ej
1-2 A 6 0 6 3 9 3 0 6
1-3 B 4 0 4 0 4 0 0 4
1-4 C 9 0 9 2 11 2 2 11
2-4 D 2 6 8 9 11 3 3 11
3-4 E 7 4 11 4 11 0 0 11
3-5 F 8 4 12 12 20 8 0 12
4-6 G 5 11 16 11 16 0 0 16
4-7 H 10 11 21 14 24 3 3 24
5-7 I 4 12 16 20 24 8 8 24
6-7 J 8 16 24 16 24 0 0 24

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 Project Scheduling and Control Techniques
CPM/PERT
• Activity-on-Arc (AOA) Network
■ Time duration of activities shown on branches.
■ Activities can occur at the same time (concurrently).
■ A dummy activity shows a precedence relationship but reflects no passage of time.
■ Two or more activities cannot share the same start and end nodes.
 CPM/PERT
• Activity-on-Node (AON) Network
▪A node represents an activity, with its label and time shown on the
node
▪The branches show the precedence relationships
▪Convention used in Microsoft Project software Path Events
A 1→2→4→7
B 1→2→5→6→7
C 1→3→4→7
D 1→3→5→6→7
 CPM
• The critical path is the longest path through the network; the minimum time
the network can be completed. From Figure below
Path A: 1  2  4  7 3 + 2 + 3 + 1 = 9 months

Path B: 1  2  5  6  7 3 + 2 + 1 + 1 + 1= 8 months

Path C: 1  3  4  7 3 + 1 + 3 + 1 = 8 months

Path D: 1  3  5  6  7 3 + 1 + 1 + 1 + 1 = 7 months
 CPM - Detailed Analysis of Critical Path (1  2  4  7)

Activity start time

CPM - Activity Scheduling : Earliest Times
■ES is the earliest time an activity can start: ES = Maximum (EF)
■EF is the earliest start time plus the activity time: EF = ES + t
The Project Network Activity Scheduling : Latest Times

■ LS is the latest time an activity can start without delaying critical path time: LS = LF - t
■ LF is the latest finish time. LF = Minimum (LS)
The Project Network - Activity Slack Time (1 of 2)
◼ Slack is the amount of time an activity can be delayed without delaying the project: S =
LS – ES = LF - EF
◼ Slack Time exists for those activities not on the critical path for which the earliest
and latest start times are not equal.

Activity LS ES LF EF Slack, S
*1 0 0 3 3 0*
*2 3 3 5 5 0*
3 4 3 5 4 1
*4 5 5 8 8 0*
5 6 5 7 6 1
6 7 6 8 7 1
*7 8 8 9 9 0* *Critical path
The Project Network - Activity Slack Time (2 of2)
PERT - Probabilistic Activity Times

■ Activity time estimates usually cannot be made with certainty.

■ PERT used for probabilistic activity times.
■ In PERT, three time estimates are used: most likely time (m), the optimistic
time (a), and the pessimistic time (b).
■ These provide an estimate of the mean and variance of a beta
distribution:
variance: v




2
b- 



  a 
6

mean (expected time): t  a  4m 

b 6
 Using Beta Probability Distribution to Calculate Expected Time Durations
• A typical beta distribution is shown below, note that it has definite end points
• The expected time for finishing each activity is a weighted average

optimistic  4most likely

Exp. time 
pessimistic
Probabilistic Activity Times - Example (1 of 3)
Probabilistic Activity Times - Example (2 of3)
Probabilistic Activity Times - Example (3 of3)

The End of Chapter 6