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PERT/CPM CALCULATIONS
Basic Techniques Using MS Excel And Manual Calculation
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
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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 (TE) probability(TO x 1 + TL x 4 + TP x 1) / 6 = TE 1) Read this formula as the sum of (optimistic x 1 + likely x 4 + pessimistic x 1) divided by 6 = expected task duration
PERT Calculations
Step 3
PERT Calculations
Step 3
When doing manual PERT Calculations it is helpful to construct a table to stay organized Consider the sample project in Unit 1 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
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Our Project
Set up in tabular form, it might look like this
A Refresher
TASK ID 1 2 3 4 5 6 7 8 Description Mark Utilities Dig Holes Buy Trees Buy Flowers Plant Trees Plant Flowers Buy Edging Install Edging Duration (Days)
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hs iniF
srewolF t nalP
7 5 4
srewolF y uB seerT y uB seloH giD
3 2
seitilit U kr aM
1
tr atS
TO
TL
TP
TO-Optimistic Remember
TM-Likely
TO-Optimistic
TM-Likely
SD=Standard Deviation
PERT Step 4
Dates
For each task, determine the latest allowable time for moving to the next task The difference between latest time and expected time is called slack time
Earliest Finish
LS=Latest Start
LF=Latest Finish
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PERT Step 5
Probabilities
Enter a standard normal table to find a probability that corresponds with Z or go online to:
http://math.uc.edu/statistics/statbook/tables.html) http://math.uc.edu/statistics/statbook/tables.html) to enter a z number the application will retrieve the probability from the lengthy table
For our project, figure a probability based on the most likely time, 15 days: (15-15.51)/square root(2.53) = (15-15.51)/1.59=-.3207 (Z) (15(15-15.51)/1.59=A corresponding probability is 37.7% (Rounded) This process can be repeated for any date desired
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PERT Step 5
Probabilities
Excel has normal distribution functions built in and can compute PERT probabilities By creating a table as a spreadsheet, the addition of a few simple formulae will do the rest of the work Create a table as a template that can be used over and over again simply change the input
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PERT Step 5
Probabilities
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Computing Variances
For each task cell:
((Pessimistic((Pessimistic-Optimistic)/6)2
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Excel uses a formula designed to compute the probability of placement of a combination of elements in a normal distribution very accurate NORMDIST(x,mean,standard_dev,cumulative)
X is the value for which you want the distribution (desired date) Mean is the arithmetic mean of the distribution (summed PERT expected durations) Standard_dev is the standard deviation of the distribution (square root of the summed variances) Cumulative is a logical value that determines the form of the function. If cumulative is TRUE, NORMDIST returns the cumulative distribution function (probability of completion on the date entered)
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This set of formulae mirrors the manual calculations but takes less time for the user Because PERT is a probabilistic approach, these formulae can deliver a 100% probability but no plan is perfect these are always estimates Never feel there is a 100% probability of a project completing on the estimated date
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PERT Analysis
Thoughts, Philosophy and Lessons Learned
All Plans are estimates and are only as good as the task estimates unrealistic estimates equal unrealistic plans If the scope of a plan changes, all estimates must change adding tasks equals added time and cost PERT Analysis is a good way to what if before a project is launched helps determine if it is needed at all
What tasks will it take to do the project? What is the optimum order of the project tasks? How long will it take to do the project? How likely is the project to succeed? What if The Boss wants it earlier, what is the likelihood then?
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CPM Analysis
In comparison to PERT, CPM analysis is simple CPM Analysis is a series of easy steps
1. Develop time and cost data ("normal" and "crashed") for all tasks 2. Develop cost-per-week for crashing (crashed costs divided by cost-per(crashed time saved) 3. Develop project network (PERT) 4. Crash the activity on the critical path with the lowest cost-forcost-forcrashing 5. Recalculate the project network (the critical path might change!)
Repeat steps 4 & 5 until all the paths have been crashed. Ease up on all non-critical paths, just to the point that all nonpaths are critical.
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CPM Analysis
A typical CPM table might have the following structure:
Activity Begin End Time (Crashed) Time (Normal) Cost (Crashed) Cost (Normal) Time Saved Cost Increase Cost / Week
Foundation
4000
3000
1000
1000
Frame
8000
4000
4000
1333
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CPM Analysis
Thoughts, Philosophy and Lessons Learned
All Plans are estimates and are only as good as the task estimates unrealistic estimates equal unrealistic plans If the scope of a plan changes, all estimates must change adding tasks equals added time and cost CPM Analysis is a good way to what if before a project is launched helps control expectations
How much will it cost? How long will it take? How long will it take if it needs to be done sooner? How much will it cost if it needs to be done sooner?
PM Calculations Overview
PERT and CPM can be used together Calculations are based on a few simple formulae:
PERT Derived duration estimates Standard Deviation Variance Probability of meeting expectation Crash costs and time & normal costs and time
Calculations can be done manually or using Excel same formulae, different tools
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ProjeX, by WAA, Inc Systema, Sid, Probabilistic Solutions to Project Scheduling, Ferris State, 1999 US National Performance Survey, The Standish Group, 1998 Verma, Vijay K., Managing the Project Team: The Human Aspects of Project Management, Philadelphia: PMI, 1997 Wiest, Jerome D., and Levy, Ferdinand K., A Management Guide to PERT/CPM, New Delhi: Prentice-Hall of PrenticeIndia Private Limited, 1974
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You have completed URBS 609 PERT Unit 2 Please proceed to URBS 609 Project Management Using MS Project Block
This Unit of Instruction was crafted by Robert Hugg For Minnesota State University, Mankato Urban and Regional Studies Institute - 2004
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