Program Evaluation and Review Technique (PERT)

 This method was basically developed by US Navy for

planning of a Missile launching program
 The PERT system uses a network diagram consisting of
events which must be established to reach project
objectives
 The approach of event orientation in network diagram
grew out of the desire to report on the progress via
discernable management milestones
 PERT
 PERT stands for program evaluation and review technique
 PERT uses event oriented network diagrams in which
successive events are joined by arrows
 PERT system is preferred for those projects or operations
which are of non-repetitive nature and for those projects in
which precise time determination for various activities
cannot be guided by the past experience
 For example, project of launching a space craft involves
work never done before
 Time estimate here is little more than guess
 Comparison of CPM and PERT
PERT is an event oriented network diagram while CPM uses
activity oriented network diagram. They differ on the following:
In CPM, time estimates for activities are with fair degree of
accuracy while in PERT system, time estimates are nor so
accurate and definite
In CPM, cost optimization is given prime importance. The
time duration depends on the cost optimization.
In PERT, it is assumed that cost varies directly with time.
Attention is to minimize time so that minimum cost results. In
PERT time is the controlling factor.
 Comparison of CPM and PERT (contd…)

 CPM is preferred in those projects where time can be

estimated fairly well and when costs can be calculated in
advance
 PERT is used in those projects where there is extreme
degree of uncertainty, and where control over time
overweighs control over cost
 PERT is generally used for research and development
projects which has uncertainties about the times required
for development research, engineering design and ultimate
construction
Comparison of CPM and PERT (contd…)
 CPM is used on those projects which employ long-
developed and well-seasoned components which are based
on stable technology. For such works, changes occur
mainly in design---sizes, shapes and arrangement rather
than in design concepts
 Uncertainties : Use of PERT

 Two approaches may be used for assessment of

duration for activity completion
 The first approach is the deterministic approach in which
we may assume that we know enough about each job or
operation, so that a single estimate of their duration is
sufficiently accurate to give reasonable results
 This approach is followed by CPM users
 Uncertainties : Use of PERT

 The second approach is the non-deterministic approach

or probabilistic approach in which one may only be able
to state the limits within which it is virtually certain that
the activity duration will lie
 PERT assumes that the duration of each activity is a
random variable with known mean and standard
deviation, and derives a probability distribution for the
project completion time.
 PERT

 Most common formal approach to incorporate uncertainty of

activity durations in scheduling a project by PERT is to:
 Apply the critical path method of scheduling process, &
 Analyze the results from a probabilistic perspective.
 Users provide estimates of the parameters for each activity:
• Optimistic duration, to: shortest time to perform the activity
under favourable conditions, assuming everything goes right.
• Pessimistic duration, tp: longest time to perform the activity
under adverse conditions, assuming everything goes wrong.
• Most likely duration, tm: time that occurred most frequently in
similar circumstances, assuming only those things would go
wrong that are normally expected to go wrong (not others).
.
 PERT
Assumptions :
 PERT focuses on a single critical path requiring the longest
total time (assuming the mean values of activity durations).
 Durations of the activities are random variables following a
special beta distribution to determine the mean duration
and its standard deviation.
 Durations of the activities are assumed to be statistically
independent variables (to facilitate the calculation of the
critical path variance).
 The number and the sum of the durations of the activities
on the critical path are large enough to invoke the Central
Limit Theorem (completion time assumed to approximately
follow a standard normal probability distribution).
 PERT - Calculations

After the schedule is developed & the durations are specified:

1. Calculate the mean/effective/expected duration, µ, as:

t E=µ = (to + 4tm + tp) / 6.

2. Perform the CPM calculations, using the effective duration, µ

3. Calculate the standard deviation, Ϭ, and the variance, V, for

the set of activities on the critical path:

Ϭ = (tp – tₒ) / 6;

V = Ϭ² = [(tp – to) / 6]².

 PERT - Calculations

4. Calculate the characteristics of the critical path only:

Effective duration of the critical path, Tcp = Σ (µcp)

Standard deviation of the path, Ϭcp = √ Σ (Ϭcp²).

5. Calculate the standard statistical variable, Z, for each

specified (targeted) completion duration, Tsp:
Z = (Tsp – Tcp) / Ϭcp.

6. Using the Z value obtained from the standard normal

distribution table, estimate the probability of achieving
the specified duration, Tsp, or vice versa.
 Limitations of PERT

 The method requires three duration estimates for

each activity rather than a single estimate as in CPM.

 The procedure focuses upon a single critical path,

when many paths might be critical due to random
fluctuations.

 It is incorrect to assume that the construction activity

durations are independent random variables.
Thank you
 PERT - Problem
Example: Using PERT, find the probability of the following project
to be completed within: A. 27 wks; B. 33 wks (consult given table).
Activities Precedence to tm tp
A None 6 10 12
B None 4 8 10
C None 2 4 7
D A 5 6 7
E B 4 9 10
F C 2 6 8
G D 4 5 6
H E, F 3 6 7
I G, H 4 6 8
J I 2 3 4
 PERT - Solution
Activity Precedence to tm tp µ Ϭ² Remarks

A - 6 10 12 9.667 1.000
B* - 4 8 10 7.667 1.000 * Critical
C - 2 4 7 4.167 0.694
D A 5 6 7 6.000 0.111
E* B 4 9 10 8.333 1.000 * Critical
F C 2 6 8 5.667 1.000
G D 4 5 6 5.000 0.111
H* E, F 3 6 7 5.667 0.444 * Critical
I* G, H 4 6 8 6.000 0.444 * Critical
J* I 2 3 4 3.000 0.111 * Critical
 PERT - Solution
 CPM diagram: draw activity paths; identify the critical path.
 Probability: consult the standard normal distribution chart given.
Activity Tpath, Ϭpath, Z for Probability Z for Probability Rem
Paths wks wks 27 wks @ Z for 27 wks 33 wks @ Z for 33 wks arks

B-E-H-I-J 30.667 1.732 -2.119 0.017 1.345 0.911 *CP

 The expected time of completion of the project = 30.667 wks;

A. Probability that the project is completed in 27 wks = 1.7%;
B. Probability that the project is completed in 33 wks = 91.1%.