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# Project Management

Lecture- VIII
Project Scheduling with probabilistic activity
Uncertain Activity Durations

For each activity in the project three time estimates are obtained
- Optimistic time, a
- Most likely time, m
- Pessimistic time, b
PERT Time Estimates

## • Standard deviation of activity duration =

=b-a/6
BETA Distribution

• [ a,b are the location parameters and c,d are the shape parameters ]
Why choose BETA ?

## • Permits flexibility of shapes by suitable choice of location and shape parameters.

• Intuitive appeal.

## • Easy approximations to mean and variance

Other possible distributions

• UNIFORM

• TRIANGULAR

• EXPONENTIAL

• NORMAL

• DISCRETE
UNIFORM DISTRIBUTION
TRIANGULAR DISTRIBUTION
EXPONENTIAL DISTRIBUTION
NORMAL DISTRIBUTION
DISCRETE DISTRIBUTION
Basic PERT Procedure
• Compute mean and variance of all jobs.

• Conduct forward and backward pass on the project network with expected times of all
activities.

## • Obtain variance of critical path by adding variance of activities.

• Obtain the distribution of the Project Duration.

## • Make probability statements about the project

- Chances of meeting the target date.
- Probability of exceeding a given ceiling date.
- Probability that the project duration is confined to an interval of time.
An Example
Sample Network (A-O-A)
FORWARD & BACKWARD PASS
CRITICAL PATH
Distribution of the Project Duration
CONFIDENCE INTERVALS

## • Chances that the project is completed within

- mean +/- 1 sigma 68% (29.41 -- 34.11)
- mean +/- 2 sigma 95% (26.76 -- 36.56)
- mean +/- 3 sigma 99% (24.31 -- 39.01)
PROBABILITY STATEMENTS

## • Probability of duration lying in an interval, say 28 to 36 days

Area from normal tables = 0.9616 - 0.0681 = 0.8935
Standard PERT Assumptions

## • The activities are independent.

• The critical path contains a large no. of activities so that we can invoke the Central Limit
Theorem.

## • Activity times follow a Beta distribution.

• The mean and variance of the activities are given by (a+4m+b)/6 and [(b-a)/6]2.