2010 International Conference on E-Business and E-Government
Research on improved PERT model in analysis of
schedule risk of project
Zhang Yun-ning1
Business school of Hohai University
Nanjing,china
zhangyunning1959@yahoo.com.cn
Abstract——PERT (program evaluation and review technique) is
one of the most popular means in Project Time Management,
however, it exists some shortcomings. Based on the assumptions
of PERT, this paper illustrates the disadvantages of the normal
three times estimation method and gives countermeasures to
solve these problems. Firstly, it adopts the Monroe method to
improve the normal ß distribution. Secondly, it improves the
accuracy of the normal method of three times estimation by
adopting the restrictive probability to estimate the three times
and the minimal deviation model. Thirdly, it considers the effects
of the secondarily crucial line. Consequently, the paper applies a
new model to analyze schedule risk of project and divides it into
five different grades.
Key Words-PERT;Monroe method; the restrictive probability of
three times estimation; scedule risk
Ⅰ INTRODUCTION
The concept of project management was initially
introduced by Luogeng Hua to China. Afterthere, it has been
used into the field of management practice more and more
frequently. Project risk assessment aims to evaluate the overall
level of project risk through analyzing and weighing the
various factors. Engineering projects, especially large and
medium projects are an extremely complex systems
engineering. For their large-scale investment of resources and
complex conditions of natural and technological long
construction period, resulting in many uncertainties. CPM
(Critical Path Method) used under the certain conditions is no
longer meeting need of the management for the large and
medium projects.
PERT (program evaluation and review technique) is one
of the most basic tool to solve the problem of and the problem
of uncertain duration with certain logic relationship among
different project activities. It was originally invented by
Malcolm etc. PERT is an effective means which can shorten
the period, save manual, material, and cash cost. However, it
still has some problems as a critical important technique. First,
the evaluated value comes from the evaluator’s own
knowledge and experience that it may has some variance
comparing with the fact. Second, the formula of calculating
project period and the variance of it is limited and can not
change by the actual factor [1]. Moreover, it neglects the
multi-influence of multiple lines to project period which may
be less. As a result, PERT can not avoid the variance of
estimated period in 10% and the mistake of activity in 5% [2].
It raises a problem whether we can improve PERT into a better
technique which can be more scient, more realistic, and
978-0-7695-3997-3/10 $26.00 © 2010 IEEE
DOI 10.1109/ICEE.2010.699
Sun Xi-xi 2
Business school of Hohai University,
Nanjing,china
sunxixi4268@yahoo.com.cn
reduces the error and rises the accuracy level. This paper
focuses on the problem and gives advice on improvements of
the formula.
Ⅱ THE IMPROVED PERT MODEL
A Estimation of the probability distribution of task-time
Classical PERT method assumes that the distribution of
project activities is subject to ß distribution. However, in
practical engineering, the different activities are affected by
different factors and extent aren't the same. It may subject to ß
distribution, normal distribution, triangular distribution or
other distribution. This unreasonable assumption is bound to
lead to the calculation bias of the expectations and variance of
the activity duration time and activity time variance formula of
the single
Currently the technique of estimation of the probability
distribution of task-time can be divided into quantity and
quality. Because of lack of empirical records on similar project
activities and period, quantity technique is difficult to apply in
massive project. Consequently, quality technique method is a
practical and feasible technique, especially for massive project.
Monroe method is the tool which was introduced for
controlling risk of designing rocket in 1997 by Monroe. It only
needs two stages of feedback from the information of
professional, which can resolve the disadvantage of Delphi
method—several stages of feedback. It also can avoid the
Prejudice effect and authority effect of brain storm because
there is no need to recall professional to discuss in the meeting.
Based on the shortages of classical PERT, this essay adopts
the distribution and introduces Monroe to calculate more
accurate. Massive project always has plenty of activities,
however, it is impossible to use this technique in every project.
As a result, this essay only analyses the key activities of
project by Monroe analysis. To those not, we believe it
attributes to ß-distribution. Following is the step of Monroe
analysis [3]:
Step1: select evaluated professional and ensure the
respective weight.
Step2: professionals give their explanations or reason by
their experience and the result of technique.
Step3: staff of project management collects the result of
professional and edit it into a document.
Step4: feedback the document to professional and let them
reconsider their opinions and give another evaluated value.
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 Step5: Staffs recollect the result of professionals and get
the final result.
B Applying the restrictive portion of three point estimator’s
method to estimate the value of a, m and b
The three point of ß distribution means positive time a,
possible time m, and pessimistic time b. The classical PERT
method calculate the activities duration through the estimated
value of a, m and b under the assumption that every activity is
subject to ß-distribution. The accuracy of the value of a, m and
b have a direct impact on the accuracy of calculation of
activities expectations and variance. Moreover, the mean and
variance decide the result of PERT.
While in Practical projects, the value of a, m and b is
gained through the estimation experts. In general, the accurate
estimation of probability of a, m and b are very difficult, or
impossible to estimate accurately for experts. Therefore, the
estimated these values relative to a greater degree of difficulty,
and the error is greater.
Based on the problem of different standards and poor
TABLEⅠ THE ERROR COMPARISION OF ESTIMATION METHODS FOR EXPECTATION ANG VARIANCE
estimated accuracy which may lead to huge error, this essay
applies the restrictive portion of three point estimator’s method
to reduce the error of different standards.
Definition1: define B(ti) =αi, ti means the estimation of the
duration of activity under the guarantee rate of αi.
By using this definition, we improve the three points (a, m,
b) with the corresponding guarantee rate of αi= (α1, α2,
α3). For example: αi=(0.05,0.55,0.95) presents ti=(9,15,21),
that B(9)=0.05, B(15)=0.55, B(21)=0.95. a and b are not the
extreme ratio; and m can be defined as the insurance rate of
50% or 55%. It can improve the accuracy of estimated a, m, b,
and then address the problem of classic PERT.
C Calculate expectation and variance of activity
After the result of a, m, b, we can calculate the mean and
variance of project. Jianguo Dai analyses classic PERT and
finds the mean and variance value will have a huge error if it
attributes to β -distribution [4]. Keeefr.D.L et al. concludes
five kinds of calculate ways to analyze the error [5].

Expectation Variance
Method Average error Average error
Formula Formula
(%) (%)

1 Dij = (a + 4m + 6) / 6 41.7 σ ij2 =（[ b- a） / 6] 2 54.9

σ 2
ij = 0 .6 3 0 ( m − D ij )2 +
2 Dij =0.630m+0.185(a+b) 0.02 0.5
0 .1 8 5[(b − D ij )2 + (a − D ij )2 ]

σ 2
ij = 0 .4 ( m − D ij ) 2
+
3 Dij = 0.4m + 0.3(a + b) 0.05
2 2
2.7
0 .3[( b − D ij ) + (a − D ij ) ]
4 Dij =2/(2+1/ m),m<0.13 16.4 σ = m (1 − m) / (1 + m), m < 0.13
2
ij
2
25.4

2
(b − a ) m − a
σ 2
ij = [22 + 81
5 37.7
1268 b − a 48
Dij = (2a +9m+ 2b)/13 m − a 2
− 8 1( ) ]
b − a

The expected value by Perry-Greig and Person-Tukey of
duration (as method 2 in table Ⅰ) have a small error that
expected value and variance are 0.02% and 0.5% respectively.
As a result, we use the following formulas to calculate
expected value Dij and variance δ2ij:
D ij = 0 . 6 3 0 m + 0 . 1 8 5 ( a + b )
(1)
σ ij2 = 0.630(m − Dij )2 + 0.185[(b − Dij )2 + (a − Dij )2 ]
(2)
To those activities which attribute to other attributions, it
can apply random expected value and variance to ensure the
D Amend the project plan period
Schonberger et al. agrue that more extra lines may be the
key line in PERT. However the classic PERT always neglect
this fact, and only has one key line in dominant. It could lead
to a lower value of expected period and reduce the risk [6].
This paper considers the influence of non-key lines, and
applies the equivalent method to amend the expected value [7].
1) Only one line arrives at the point.
The expected value TEj and variance δ TE2 of the
j

value of duration. earliest time are the mean and variance of its previous line.

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 TE = T E i + ti− j , i < j TE
∗
= TE + ΔT
j
(3) j j
(13)
Notes： ti-j is the duration of activity (i-j). Variance is assumed to remain unchanged after amendment
the dominant line.
When it attributes to normal distribution,
When calculate the time parameters of computing network,
TE j = TE i + D i − j , i < j (4) we can suppose that there is a virtual process after the node j in
the leading line, and add a corresponding node j`. The virtual
δ TE
2
= δ TE
j
2
+ δ i2− j , i < ji
(5) processes duration is Δ T , the variance is 0. The
post-post-process of the original node j is also that of the
2) Two lines arrive at the point. virtual process. After that, then we can use the classic PERT
network method to calculate the time parameter. Therefore,
a) calculate the expected value TE kj and variance δ kj2 this method is called equivalent probability amendment PERT
method
of the earliest time of k (k=1, 2), and ensure the key line.
3) More than two lines arrive at the point.
To line k, the earliest finish time TEkj is:
For these points, the compound method is similar to the
TEkj = TEi + ti− j , i < j, k = 1,2 kind of the second case. Firstly, we should define the leading
(6)
line, and then we can amend it, considering the effect of
When it attributes to normal distribution, non-leading line.

TE
k
= TE j + D i − j , i < j
When more than two lines are mutually independent,
j (7)
A=0.5P1P2…Pn, in which, n means the number of the lines
arriving at the point. The value of λ can be achieved from
δ kj2 = δ i2 + δ i2− j , i < j the Normal distribution tables.
(8)
When more than two lines are not independent or not
Then calculate difficulty Coefficient of λ completely independent, we can choose the subnetwork to
TS − Te amend firstly, and making it as the independent line. After
λ = which, we can continue to the project plan period.
σ n (9)
The routine with less value of λ is key line. Ts is the Ⅲ APPLYING THE IMPROVED PERT TO ANALYSE THE
SCHEDULE RISK
longest duration，Te is the duration of the line relative to λ;
δn is the standard deviation of the line relative to λ. A Applying the improved PERT to calculate project duration
b) From the opposite direction of PERT ， search the Based on improved PERT model:
nearest next point j. Step1: apply the distribution and index of Monroe method
c) Calculate the expected duration Tkbj and variance and assume it attributes to ß-distribution.
(δ ) of the point j.
k 2
bj
Step3: take the estimated value of a, m, b into the formula
of Perry-Greig and Person-Tukey if it attributes to
j ß-distribution. If not, use the formula of random expected
Tbjk = ∑ Dgh , b ≤ g ≤ h ≤ j value and variance to ensure the expected value and variance
g =b
(10) of duration.
j
(σ k
bj )2 = ∑ σ ,b ≤ g ≤ h ≤ j Step4: amend the expected value and variance of the
g =h
(11) duration of every activity by using the equivalent probability
method for compounded lines.
d) Amend the expected value of key lines by the equivalent
method. Tkbj is 0.5p，however accomplishment probability of Step5: according to the key lines, calculate the period Tc.
the expected value of non-key lines shoule be P. Because these
B Analysis of schedule risk of project
two lines are independent, the compound probability should be
0.5. Expend Tbj but keep the variance, if expended period is This paper applies project progress risk to evaluate period
Δ T ， the probability is 0.5p ， this is the equivalent risk. Project risk assumes the completion probability in the
probability amendment method。 limited period is P, and project progress risk is:

Δ T = λ ∗ σ bj Pr = 1 − P
(12) （14）

Notes：λ * can be got from Normal distribution table Activities in massive project are always numerous and
independent. According to central limit theorem of the
when it is 0.5P；δbj is the variance of key lines.
probability theory, we believe the period of project obey the
After amendment,

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normal distribution approximately. As a result, we can get of the schedule after amending. For the purpose of
completion probability: convenience of calculating, we make λ= (t 一 Tc)/δc, then
Ts 1 x −Tc transformed it into standard normal distribution. According to
1 − ( )2
the value of λ and the Normal distribution tables, we can get
P(t ≤ Ts ) = ∫ e 2 σc
dt the project completion probability P.
−∞ σ c 2π （15）
The integral project risk is the index of project progress
Notes: δc is the variance of key line. Tc is the expectation risk in limited period, and can be divided into five grades:

TABLE Ⅱ EVALUATION OF PROJECT SCHEDULE RISK

Risk grade Higher High Average Low Lower

Risk probability (pr) Pr ≥ 0.70 0.45 ≤ Pr < 0.70 0.30 ≤ Pr < 0.45 0.15 ≤ Pr < 0.30 Pr ≤ 0.15

Ⅳ CONCLUSION
Based on the analysis and discussion of duration of PERT,
this paper concludes: Firstly, the restrictive portion of three
point estimator’s method can reduce the error of evaluated data
in a large extent, and is more convenient than classic PERT;
Secondly, combined formula of Perry-Greig and Person-Tukey
can replace PERT classic model which can improve the
accuracy of model; Lastly, applying of the equivalent
probability method to amend the expected value of the
dominant line can resolve the problem of non-unique key line
in classic PERT model.
REFERENCES
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Method for Aviation Project’s Duration Based on Improved-PERT”
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2007.
[2] Cha，eRB. “Operations Management”. Machinery Industry Press，2003.
[3] Zhang shouzhong. “Research on Aviation Project Risk Evaluation”
Northwestern Polytechnical University, 2006.
[4] Dai Jianguo. “Studies on The Estimation of Activity Time PERT”.
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March 1996.
[5] Keeefr.D.L.，Verdini.W.A. “Better Estimation of PEPT Activity Time
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[6] Li Ping, Gu Xinyi. “Research on PERT model in caculation of project
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Resources Constraints”. Hohai University, 2006.

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