PERT

Project Evaluation & Review Techniques

CPM was developed by US industry in 1958 (Du Pont Corporation and
Remington-Rand) and the emphasis was on the trade-off between the cost of
the project and its overall completion time (e.g. for certain activities it may
be possible to decrease their completion times by spending more money -
how does this affect the overall completion time of the project?)

PERT was developed by the US Navy in 1958 for the planning and control
of the Polaris missile program and the emphasis was on completing the
program in the shortest possible time. In addition PERT had the ability to
cope with uncertain activity completion times (e.g. for a particular activity
the most likely completion time is 4 weeks but it could be anywhere
between 3 weeks and 8 weeks).
Both on a logical sequence of tasks – organized visually Charts, tabular or
simple lists
 PERT -
Project Evaluation & Review Techniques
• Definition: In PERT activities are shown as a network of precedence
relationships using activity-on-arrow network construction
– Multiple time estimates
– Probabilistic activity times

USED IN : Project management - for non-repetitive jobs (research and

development work), where the time and cost estimates tend to be quite
uncertain. This technique uses probabilistic time estimates.
 NETWORK TECHNIQUES

PERT CPM
-Program Evaluation and -Critical Path Method
Review Technique -Developed by El Dupont for
- developed by the US Chemical Plant Shutdown
Navy with Booz
Project- about same time as
Hamilton Lockheed
PERT
on the Polaris
Missile/Submarine
program 1958

Both use same calculations, almost similar

Main difference is probabilistic and deterministic in time estimation
Gantt Chart also used in scheduling
Chapter 8 Scheduling, PERT, Critical Path Analysis 3
 PERT
For Dealing With Uncertainty
• So far, times can be estimated with relative certainty, confidence

• For many situations this is not possible, e.g Research, development,

new products and projects etc.

• Use 3 time estimates

m= most likely time estimate, mode.
a = optimistic time estimate,
b = pessimistic time estimate, and

Expected Value (TE) = (a + 4m + b) /6

Variance (V) = ( ( b – a) / 6 ) 2
Std Deviation (δ) = SQRT (V)

4
 PERT Calculations
• Step 1: Define tasks
• Step 2: Place Tasks in a logical order, find the critical path
The longest time path through the task network. The series of
tasks (or even a single task) that dictates the calculated finish date
• Step 3: Generate estimates
- Optimistic, pessimistic, likely and PERT- expected
The duration time for each of a Project’s activities in a PERT
environment are estimated on the basis of most likely, pessimistic,
and optimistic completion times. These times can be arrived at in
various ways. A number of these ways contain substantial
subjective components because it is often the case that little
historical information is available to guide those estimates.

- Standard Deviation and variance

• Step 4: Determine earliest and latest dates
• Step 5: Determine probability of meeting expected date
• Steps 1 and 2 are logic and legwork, not calculation – these
require a clear goal

5
 PERT Calculations – Step 3
• Assuming steps 1 and 2 have been completed begin calculations –
use a table to organize your calculations
• Simple calculations to estimate project durations
• Based on input of 3 estimated durations per task
– Most Optimistic (TO) – best case scenario
– Most Likely (TL) - “normal” scenario
– Most Pessimistic (TP) - Worst case scenario
• Formula derives a probability-based expected duration time of an
individual activity (TE)
– (TO x 1 + TL x 4 + TP x 1) / 6 = TE
– Read this formula as the sum of (optimistic x 1 + likely x 4 + pessimistic x 1)
divided by 6 = expected task duration
• Complete this calculation for all tasks

6
 PERT Calculations – Step 3
• 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
• V=SD2 (Standard deviation squared)

7
 PERT Calculations – Step 3
• When doing manual PERT Calculations it is helpful
to construct a table to stay organized
• Consider the sample project– planting trees and
flowers, set up using a list
– Rough estimates and no risk analysis
• No Range, simply rough estimates - unreliable?
– PERT Analysis will better refine estimates
• Start by setting up a table to organize data

8
 PROBLEN NO 1
Precedences And Project Activity Times
Immediate Optimistic Most Likely Pessimistic EXP Var S.Dev
Activity Predecessor Time Time Time TE V 

a - 10 22 22 20 4 2
b - 20 20 20 20 0 0
c - 4 10 16 10 4 2
d a 2 14 32 15 25 5
e b,c 8 8 20 10 4 2
f b,c 8 14 20 14 4 2
g b,c 4 4 4 4 0 0
h c 2 12 16 11 5.4 2.32
I g,h 6 16 38 18 28.4 5.33
j d,e 2 8 14 8 4 2

Chapter 8 Scheduling, PERT, Critical Path Analysis 9

 The complete network

d 6
2
(15,25)
j
a (8,4)
(20,4) e
(10,4)
1 f 7
3
b (14,4)
(20,0)
g
c
(4,0)
(10,4) i
(18,28.4)
h 5
4
(11,5.4)

Chapter 8 Scheduling, PERT, Critical Path Analysis 10

 Figure 8-13 The complete Network

EF=20 35
d 6
2
a (15,25) j
(20,4) (8,4)
b e 43
20 (10,4)
(20,0) CRIT. TIME = 43
1 f 7
3
(14,4)
g
c (4,0)
(10,4) i
(18,28.4)
h 5
4
(11,5.4)
10 24

Chapter 8 Scheduling, PERT, Critical Path Analysis 11

 Critical Path Analysis (PERT)
Activity LS ES Slacks Critical ?
a 0 0 0 Yes

b 1 0 1

c 4 0 4

d 20 20 0 Yes

e 25 20 5

f 29 20 9

g 21 20 1

h 14 10 4

i 25 24 1

j 35 35 0 Yes

Chapter 8 Scheduling, PERT, Critical Path Analysis 12

 Assume, PM promised to complete the project in the fifty days.
What are the chances of meeting that deadline?
Calculate Z, where

Z = (D-S) / V
Example,
D = 50; S(Scheduled date) = 20+15+8 =43; V = (4+25+4) =33
Z = (50 – 43) / 5.745
= 1.22 standard deviations.

The probability value of Z = 1.22, is 0.888

1.22

Chapter 8 Scheduling, PERT, Critical Path Analysis 13

 What deadline are you 95% sure of meeting

Z value associated with 0.95 is 1.645

D = S + 5.745 (1.645)
= 43 + 9.45
= 52.45 days

Thus, there is a 95 percent chance of finishing the project by 52.45

days.

Chapter 8 Scheduling, PERT, Critical Path Analysis 14

 PROBLEM NO 2
Step 1-Define the Project: Cables By Us is bringing a new product on line to be
manufactured in their current facility in existing space. The owners have
identified 11 activities and their precedence relationships. Develop an AON for
the project.

Immediate Duration
Activity Description
Predecessor (weeks)
A Develop product specifications None 4
B Design manufacturing process A 6
C Source & purchase materials A 3
D Source & purchase tooling & equipment B 6
E Receive & install tooling & equipment D 14
F Receive materials C 5
G Pilot production run E&F 2
H Evaluate product design G 2
I Evaluate process performance G 3
J Write documentation report H&I 4
K Transition to manufacturing J 2
© Wiley 2010
Step 2- Diagram the Network for
Cables By Us
Step 3 (a)- Add Deterministic Time Estimates and
Connected Paths
 Step 3 (a) (Con’t): Calculate the
Project Completion Times
Paths Path duration
ABDEGHJK 40
ABDEGIJK 41
ACFGHJK 22
ACFGIJK 23
• The longest path (ABDEGIJK) limits the project’s
duration (project cannot finish in less time than
its longest path)
• ABDEGIJK is the project’s critical path
 Some Network Definitions

• All activities on the critical path have zero slack

• Slack defines how long non-critical activities can be delayed
without delaying the project
• Slack = the activity’s late finish minus its early finish (or its late
start minus its early start)
• Earliest Start (ES) = the earliest finish of the immediately
preceding activity
• Earliest Finish (EF) = is the ES plus the activity time
• Latest Start (LS) and Latest Finish (LF) = the latest an activity can
start (LS) or finish (LF) without delaying the project completion
ES, EF Network
LS, LF Network
 Calculating Slack
Late Early Slack
Activity
Finish Finish (weeks)
A 4 4 0
B 10 10 0
C 25 7 18
D 16 16 0
E 30 30 0
F 30 12 18
G 32 32 0
H 35 34 1
I 35 35 0
J 39 39 0
K 41 41 0
 Revisiting Cables By Us Using
Probabilistic Time Estimates
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
 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   pessimisti c

Exp. time 
6
 Calculating Expected Task Times
optimistic  4most likely   pessimisti c
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

• Using probabilistic time estimates offers the advantage of predicting the

probability of project completion dates
• We have already calculated the expected time for each activity by making
three time estimates
• Now we need to calculate the variance for each activity
• The variance of the beta probability distribution is:
2
po
σ 2
 
 6 

– where p = pessimistic activity time estimate

o = optimistic activity time estimate
 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 (weeks)
Number Path
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

Path A,B,D,E,G,H,J,k = 4.82 (addition of all variance on activity path)

 Calculating the Probability of Completing the
Project in Less Than a Specified Time

• When you know:

– The expected completion time
– Its variance
• You can calculate the probability of completing the project in “X”
weeks with the following formula:

specified time pathexpectedtime  DT  EFP 

z 
pathstandard time  σP 
 

Where DT = the specified completion date

EFPath = the expected completion time of the path
σPath  varianceof path
 Example: Calculating the probability of
finishing the project in 48 weeks
• Use the z values in Appendix B to determine probabilities
• What is the probability of completing project (along critical path) within
48 weeks?
 
• e.g. probability for path 1 is z   48 weeks  44.66weeks   1.52
 4.82 
 48 weeks  44.83weeks 
z     1.42

 4.96 

Path Activities on Path z-value Probability of

Number Path Variance Completion
(weeks)
1 A,B,D,E,G,H,J,k 4.82 1.5216 0.9357
2 A,B,D,E,G,I,J,K 4.96 1.4215 0.9222
3 A,C,F,G,H,J,K 2.24 16.5898 1.000
4 A,C,F,G,I,J,K 2.38 15.9847 1.000
 Probability of completion by DT

Area = .4222

Probability = .4222+ .5000 =.9222 or

92.22%
Project not finished
Area left by the given date
of y-axis = Tail Area = .0778
.50
0
Z92 = 1.42 z
 Apply z formula to critical path

Use Standard Normal Table (Appendix B) to answer

probabilistic questions, such as

Question 2: By how many weeks are we 95% sure of completing project (along
critical path)?

 DT  44.83 weeks 
1.65   
 4.96 
 Probability Question 2

Area = .45

DT = 48.5 weeks

Area left
Tail Area = .05
of y-axis =
.50
0
Z95 = 1.645 z

© Wiley 2010
 Example No 4

Activity Imm Pred optimistic most likely pessimistic ET sigma

0 0 0 0
A 0 1 3 5
B 0 1 2 3
C A 1 2 3
D A 2 3 4
E B 3 4 11
F C,D 3 4 5
G D,E 1 4 6
H F,G 2 4 5

Note: activity “0” is a formality.

Source: Chase, Jacobs & Aquilano, Operations Management 11/e
© Wiley 2010
 Additional Example

Activity Imm Pred optimistic most likely pessimistic ET sigma

0 0 0 0 0 0
A 0 1 3 5 3.00 0.44
B 0 1 2 3 2.00 0.11
C A 1 2 3 2.00 0.11
D A 2 3 4 3.00 0.11
E B 3 4 11 5.00 1.78
F C,D 3 4 5 4.00 0.11
G D,E 1 4 6 3.83 0.69
H F,G 2 4 5 3.83 0.25

Note: activity “0” is a formality.

Source: Chase, Jacobs & Aquilano, Operations Management 11/e
© Wiley 2010
 Additional Example, continued
C

A 2 F

3 4
D
0 H
3
3.83
paths
B G
0ACFH

3.83 0ADFH
2
E 0ADGH
5 0BEGH
© Wiley 2010
 Additional Example, continued
C

A 2 F

3 4
D
0 H
3
3.83

B G

2 3.83
E Critical Path: 0-B-E-G-H
5 Length = 14.67
© Wiley 2010
Additional Example, continued.
Add variances along path
to get path variance
C

1.83 F
A

.83 .83
D
0 H
.83 0.25
0.11
0
1.78 G
B 0.69

0 0 total=2.83
E
0
© Wiley 2010
 Probabilistic Analysis
Additional Example, continued.

Project completion Z-score

times assumed
z
16  14.67 
 .79
normally distributed
with mean 14.67 and 2.83
variance 2.83
From table look-up,
P(DT16) = .7549

14.67
16
Find the probability of completing the project within 16 days.
© Wiley 2010
 Probabilistic Analysis

Additional Example, continued.

Project completion Z95 = 1.645, thus

times assumed
1.645 
 X  14.67 
normally distributed
with mean 14.67 and 2.83
variance 2.83
Solving for X=17.44 days

14.67 17.44

Find the 95-th percentile of project completion.

© Wiley 2010
 Example 5

Activity Optimistic time Most likely time Pessimistic time Expected time Variance
A 8 10 12
B 4 10 16
C 4 5 6
D 6 8 10
E 4 7 12
F 6 7 9
G 4 8 12
H 3 3 3

© Wiley 2010
Activity Optimistic time Most likely time Pessimistic time Expected time Variance
A 8 10 12 10.00 0.444
B 4 10 16 10.00 4.000
C 4 5 6 5.00 0.111
D 6 8 10 8.00 0.444
E 4 7 12 7.33 1.778
F 6 7 9 7.17 0.250
G 4 8 12 8.00 1.778
H 3 3 3 3.00 0.000

© Wiley 2010
 B(10) D(8) F(7.17)

A(10) H(3)

C(5) E(7.33) G(8)

© Wiley 2010
 B(10) D(8) F(7.17)

A(10) H(3)

Length = 38.17

© Wiley 2010
 Length = 33.33

A(10) H(3)

C(5) E(7.33) G(8)

© Wiley 2010
 B(10) D(8)

A(10) H(3)

Length = 39

G(8)

© Wiley 2010
 F(7.17)
Length = 32.5

A(10) H(3)

C(5) E(7.33)

© Wiley 2010
 B(10) D(8)

A(10) H(3)

Length = 39

Path variance = 6.67

G(8)

© Wiley 2010
 Apply z formula to critical path

Use Standard Normal Table (Appendix B) to answer

probabilistic questions, such as
Question 1: What is the probability of completing project (along critical path) within
36 weeks?

 36 weeks  39 weeks 
z   -1.16
 6.66 

© Wiley 2010
 Probability of completion by DT

Area left of
Area = .3770
y-axis = .50
Probability =
.5000 - 3770

Project finished =.1230 or 12.3%

by the given date
Tail Area = .1230

0 z
Z = -1.16
© Wiley 2010
 Apply z formula to critical path

Use Standard Normal Table (Appendix B) to answer

probabilistic questions, such as
Question 2: What is the probability of completing project (along critical path) within
40 weeks?

 40 weeks  39 weeks 
z   0.39 Probability = .6517 = 65.17%
 6.67 

Question 3: By how many weeks are we 99% sure of completing project (along
critical path)?

 D  39 weeks 
2.33   T  DT = 45.02 weeks
 6.67 

© Wiley 2010
 Example 6

Activity Optimistic time Most likely time Pessimistic time Expected time Variance
A 3 6 9 6.00 1.00
B 3 5 7 5.00 0.44
C 4 7 12 7.33 1.78
D 4 8 10 7.67 1.00
E 5 10 16 10.17 3.36
F 3 4 5 4.00 0.11
G 3 6 8 5.83 0.69
H 5 6 10 6.50 0.69
I 5 8 11 8.00 1.00
J 3 3 3 3.00 0.00

© Wiley 2010
 Example 6:

B(5) D(7.67) F(4) H(6.5)

A(6) J(3)

C(7.33) G(5.83) I(8)

E(10.17)

© Wiley 2010
 Example 6:

B(5) D(7.67) F(4) H(6.5)

A(6) J(3)

C(7.33) G(5.83) I(8)

E(10.17)

length =32.17
© Wiley 2010
 Example 6:

B(5) D(7.67) F(4) H(6.5)

A(6) J(3)

C(7.33) G(5.83) I(8)

E(10.17)

length = 35.50
© Wiley 2010
 Example 6:

B(5) D(7.67) F(4) H(6.5)

A(6) J(3)

C(7.33) G(5.83) I(8)

E(10.17)

length =37
© Wiley 2010
 Example 6:

B(5) D(7.67) F(4) H(6.5)

A(6) J(3)

C(7.33) G(5.83) I(8)

E(10.17)

length = 40.33 CRITICAL PATH

© Wiley 2010
 Example 6:

B(5) D(7.67) F(4) H(6.5)

A(6) J(3)

C(7.33) G(5.83) I(8)

E(10.17)

Path variance =1+1.78+3.36+0.69+1+0 = 7.83

© Wiley 2010
 Apply z formula to critical path

Use Standard Normal Table (Appendix B) to answer

probabilistic questions, such as
Question 1: What is the probability of completing project (along critical path) within
38 weeks?

 38 weeks  40.33 weeks 

z   -0.83
 7.83 

© Wiley 2010
 Probability of completion by DT=38

Area left of
Area = .2967
y-axis = .50
Probability =
.5000 - 2967

Project finished =.2033 or 20.33%

by the given date
Tail Area = .2033

0 z
Z = -0.83
© Wiley 2010
 Apply z formula to critical path

Use Standard Normal Table (Appendix B) to answer

probabilistic questions, such as
Question 2: What is the probability of completing project (along critical path) within
42 weeks?

 42 weeks  40.33 weeks 

z   0.595
 7.83 

Probability = .2257+.5000 = .7257 = 72.57%

© Wiley 2010
 Apply z formula to critical path

Use Standard Normal Table (Appendix B) to answer

probabilistic questions, such as

Question 3: By how many weeks are we 99% sure of completing project (along
critical path)?

 DT  40.33 weeks 
2.33   
 7.83 
DT = 46.85 weeks

© Wiley 2010
 9
7 PERT Example
B. Project Completion Times and Probabilities:
General Foundry of Milwaukee

• The duration time for each of a Project’s activities in a PERT environment

are estimated on the basis of most likely, pessimistic, and optimistic
completion times. These times can be arrived at in various ways. A number
of these ways contain substantial subjective components because it is often
the case that little historical information is available to guide those estimates.

• The expected (value) duration time of an individual activity and its variation
follow what is called a beta distribution and are calculated as follows:
E(ti) = (a + 4m + b) / 6 and var(ti) = (b - a)2 / 36

where “a” is the activity’s optimistic completion time, “m” is the activity’s
most likely completion time, and “b” is the activity’s most pessimistic
completion time.
 10
7 PERT Example
B. Project Completion Times and Probabilities:
General Foundry of Milwaukee (continued)

• Consider the following table of activities; immediate predecessor(s) (I.P.);

optimistic, most likely, and pessimistic completion times for General Foundry; and
the E(ti) and var(ti) for each activity.

ACT I.P. Optimistic (a) Most Likely (m) Pessimistic(b) E(ti) var(ti)
A __ 1 week 2 weeks 3 weeks 2 wks. 4/36
B __ 2 3 4 3 4/36
C A 1 2 3 2 4/36
D B 2 4 6 4 16/36
E C 1 4 7 4 36/36
F C 1 2 9 3 64/36
G D,E 3 4 11 5 64/36
H F,G 1 2 3 2 4/36
 11
7 PERT Example
B. Project Completion Times and Probabilities:
General Foundry of Milwaukee (continued)
•From the reduced version of General Foundy’s PERT table., the E(ti) for each activity can
be entered into the project’s network diagram.
ACT I.P. (a) (m) (b) E(ti) var(ti) F
A __ 1 2 3 2 4/36
B __ 2 3 4 3 4/36
3
A C
C A 1 2 3 2 4/36 2 2 E H
D B 2 4 6 4 16/36 2
E C 1 4 7 4 36/36 B 4
F C 1 2 9 3 64/36
D
3 4 G
G D,E 3 4 11 5 64/36
H F,G 1 2 3 2 4/36 5
Inspection of the network discloses three paths thru the project:
A-C-F-H; A-C-E-G-H; and B-D-G-H. Summing the E(ti) on each path yield time thru each
path of 9, 15, and 14 weeks, respectively. With an E(t) = 15 for A-C-E-G-H, this path is
defined as the critical path (CP) being the path that govens the completion time of the
project . Despite the beta distribution of each activity, the assumption is made that the
number of activities on the CP is sufficient for it to be normally distributed with a variance
equal to the sum of the variances of its activities only, var(t) = 112/36 = 3.11.
 7 PERT Example 11b

B2. Project Completion Times and Probabilities:

General Foundry of Milwaukee (continued)
• From the reduced version of General Foundy’s PERT table., the E(ti) for each
activity can be entered into the project’s network diagram.
ACT I.P. (a) (m) (b) E(ti) var(ti)
A __ 1 2 3 2 4/36 C2
B __ 2 3 4 3 4/36 4 F3
A2
2 H2
C A 1 2 3 2 4/36 E4
D B 2 4 6 4 16/36
6 7
E C 1 4 7 4 36/36 1 G5
3 5
F C 1 2 9 3 64/36 B 3
D4
G D,E 3 4 11 5 64/36
H F,G 1 2 3 2 4/36 critical path

• Inspection of the network discloses three paths thru the project: A-C-F-H;
A-C-E-G-H; and B-D-G-H. Summing the E(ti) on each path yield time thru each
path of 9, 15, and 14 weeks, respectively. With an E(t) = 15 for A-C-E-G-H, this
path is defined as the critical path (CP) being the path that governs the
completion time of the project . Despite the beta distribution of each activity,
the assumption is made that the number of activities on the CP is sufficient for
it to be normally distributed with a variance equal to the sum of the variances of
its activities only, var(t) = 112/36 = 3.11.
 12
7 PERT Example
B. Project Completion Times and Probabilites:
General Foundry (concluded)

• Given General Foundry’s E(t) = 15 weeks and var(t) = 3.11, what is the
probability of the project requiring in excess of 16 weeks to complete?

P( X > 16) = 1 - P ( X < 16) = 1 - P ( Z < (16 - 15) / 1.76 = .57) = 1 - 0.716

where the value 1.76 is the square root of 3.11, the standard deviation of the
expected completion time of General Foundry’s project. The assumption
being made is that summing up a sufficient number of activities following a
beta distribution yield a result which approximates or a approaches a variable
which is normally distributed--~N(,2)
 Example no 8
Variability in Activity Times

 Three time estimates are required

 Optimistic time (a) – if everything goes
according to plan
 Pessimistic time (b) – assuming very
unfavorable conditions
 Most likely time (m) – most realistic estimate
 Variability in Activity Times
Estimate follows beta distribution
Expected time:
t = (a + 4m + b)/6
Variance of times:
v = [(b – a)/6]2
 Variability in Activity Times
Estimate follows beta distribution
Expected time: Figure 3.12

t = (a + 4m + b)/6
Variance of
Probability
in 100 of
of times:
1
Probability of 1
v = [(b − a)/6]2 inoccurring
Probability

< a occurring 100 of > b

Activity
Time

Optimistic Time Most Likely Time Pessimistic Time

(a) (m) (b)
 Computing Variance
Most Expected
Optimistic Likely Pessimistic Time Variance
Activity a m b t = (a + 4m + b)/6 [(b – a)/6]2

A 1 2 3 2 .11
B 2 3 4 3 .11
C 1 2 3 2 .11
D 2 4 6 4 .44
E 1 4 7 4 1.00
F 1 2 9 3 1.78
G 3 4 11 5 1.78
H 1 2 3 2 .11

Table 3.4
Probability of Project Completion
Project variance is computed by
summing the variances of critical
activities
p2 = Project variance
= (variances of activities
on critical path)
Probability of Project Completion
Project variance is computed by
summing the variances of critical
Project variance
activities
2p = .11 + .11 + 1.00 + 1.78 + .11 = 3.11

Project standard deviation

p = Project variance
= 3.11 = 1.76 weeks
Probability of Project Completion

PERT makes two more assumptions:

 Total project completion times follow a

normal probability distribution
 Activity times are statistically independent
Probability of Project Completion

Standard deviation = 1.76 weeks

15 Weeks
(Expected Completion Time)
Figure 3.13
Probability of Project Completion
What is the probability this project can be
completed on or before the 16 week
deadline?
due expected date
Z= date – of completion /p

= (16 wks – 15 wks)/1.76

= 0.57 Where Z is the number of standard deviations

the due date or target date lies from the
mean or expected date
Probability of Project Completion
From Appendix I
What is the probability
.00 .01this project
.07 can.08
be
completed.1 on.50000
or before
.50399
the 16.52790
week .53188
deadline?.2 .53983 .54380 .56749 .57142

due expected date

.5 Z .69146 −
= date .69497 .71566 /
of completion .71904
p
.6 .72575 .72907 .74857 .75175
= (16 wks − 15 wks)/1.76

= 0.57 Where Z is the number of standard deviations

the due date or target date lies from the
mean or expected date
Probability of Project Completion

0.57 Standard deviations

Probability
(T ≤ 16 weeks)
is 71.57%

15 16 Time
Weeks Weeks
Figure 3.14
Determining Project Completion
Time
Probability of 0.99

Probability of 0.01

2.33 Standard Z
From Appendix I deviations
0 2.33
Figure 3.15
 Comparison Between CPM and PERT
CPM PERT
1 Uses network, calculate float or slack,
identify critical path and activities, Same as CPM
guides to monitor and controlling
project
2 Uses one value of activity time Requires 3 estimates of activity time
Calculates mean and variance of time

3 Used where times can be estimated Used where times cannot be estimated
with confidence, familiar activities with confidence.
Unfamiliar or new activities

4 Minimizing cost is more important Meeting time target or estimating

percent completion is more important

5 Example: construction projects, Example: Involving new activities or

building one off machines, ships, etc products, research and development
etc

Chapter 8 Scheduling, PERT, Critical Path Analysis 86