Project Management

Systems & Techniques

Program
Evaluation &
Review
Technique

Prof. Sanjay Bhoyar

Program Evaluation & Review Technique
(PERT):

 Suitable for non-repetitive type of projects

 Lack of knowledge & information about the work
 Uncertainty about
 The scope & nature of work
 Work content
 Working conditions
 Productivity of resources
 No accurate estimates of time & cost

 Probabilistic & event oriented scheduling technique

NICMAR, PUNE SANJAY BHOYAR
Scheduling by PERT:
 Network diagram (preferably A-O-A)

 Determination of event times & slack

 Identification of critical events & critical path

 Determination of probability of project

completion (an event) by given date

NICMAR, PUNE SANJAY BHOYAR

Assumptions Underlying PERT:
(Regarding activity duration)

 In the absence of reliable data, PERT assumes

variability in activity durations based on
variability in productivity
 Thus PERT uses three time estimates
 Optimistic time
 Pessimistic time
 Most likely time

 PERT assumes that the activity time estimates

approximately follow β-Distribution
NICMAR, PUNE SANJAY BHOYAR
PERT analysis:
Activity time estimates
 Three time estimates
 Optimistic time (to)
 Pessimistic time (tp)
 Most likely time (tm)
 Beta distribution
to  4.t m  t p
te 
 Average expected 6
duration of an activity 2
 t p  to 
 2

 

 Variance of an activity  6 

NICMAR, PUNE SANJAY BHOYAR

Assumptions Underlying PERT:
(Regarding Project completion (event) Time)
 PERT assumes that the probability of event occurrence
(project completion) is governed by the longest (critical)
path only.
 PERT computations uses the “Central Limit Theorem” to
combine activity duration distributions.
 Accordingly:
 The mean of the sum is the sum of the individual means,
 The variance of the sum is the sum of the individual variances,
&
 The distribution of the sum is a normal distribution, regardless
of the shape of individual distributions.
 The event occurrence (project completion) time follows
normal probability distribution
NICMAR, PUNE SANJAY BHOYAR
PERT analysis…
Project completion (event) time:

 Governed by Longest (Critical) path

 Normal probability distribution

 Average Expected project duration

 Te = EOT of the last event
 Variance & standard deviation of project duration
 Var proj = ∑ var along Longest (Critical) Path


 proj  varproj
NICMAR, PUNE SANJAY BHOYAR
PERT analysis…
Probability calculations:

 Normal value
 z = (Ts – Te)/ σproj

 Area under cumulative normal distribution

curve gives the probability of completing the
project on or before the target time ‘Ts’

NICMAR, PUNE SANJAY BHOYAR

SANJAY BHOYAR
Te
()

SANJAY BHOYAR
PERT Problem Activity Preceding to tm tp
activity
(weeks) (weeks) (weeks)

A - 2 3 5
B - 3 5 7
C - 6 7 9
D A 5 7 9
E A 3 4 7
F B 1 2 3
G C 7 10 13
H D 3 5 8
K B,G 5 8 9
L B,G 2 4 6
M H 4 6 8
N E,F,K 1 3 4
P M,N 3 6 8
Q L 8 9 10

NICMAR, PUNE SANJAY BHOYAR

 Determine the critical path & the expected project
duration
 What is the probability of completing the project
within 30 weeks?
 What is the probability of completing the project
within 35 weeks?
 What is the probability of completing the project
within 37 weeks?
 What is the project duration for 90 % certainty of
on-time project completion?

SANJAY BHOYAR NICMAR, PUNE

PERT Problem
Activity Preceding to tm tp te σ²
activity
A - 2 3 5 3.17 0.25
B - 3 5 7 5 0.44
C - 6 7 9 7.16 0.25
D A 5 7 9 7 0.44
E A 3 4 7 4.33 0.44
F B 1 2 3 2 0.11
G C 7 10 13 10 1
H D 3 5 8 5.16 0.69
K B,G 5 8 9 7.67 0.44
L B,G 2 4 6 4 0.44
M H 4 6 8 6 0.44
N E,F,K 1 3 4 2.83 0.25
P M,N 3 6 8 5.83 0.69
Q L 8 9 10 9 0.11

NICMAR, PUNE SANJAY BHOYAR

 H
50 70
D 5.16
M
7
20 6
100
A E
3.17 4.33 N P
F 2.83 5.83
10 B 30 80
5 2 110
K
C Q
7.67
7.16 9
G L
40 60 90
10 4

NICMAR, PUNESANJAY BHOYAR

 A-D-H-M-P : 27.17 wks
 A-E-N-P : 16.17 wks
 B-F-N-P : 15.67 wks
 B-K-N-P : 21.33 wks
 B-L-Q : 18.0 wks
 C-G-K-N-P: 33.50wks
 C-G-L-Q : 30.16 wks

SANJAY BHOYAR
 10.17 15.33
H
50 70
3.17 D 5.16
21.67 M
7 16.50
20 6 27.67
9.50 100
A E
4.33 N 27.67 P
0 3.17 5 24.83
F 2.83 5.83 33.50
10 B 30 80
5 2 110
17.16 24.83
0 K 33.50
C Q
7.67
7.16 7.16 17.16 21.16 9
G L
40 60 90
10 4
7.16 17.16 24.50

Average expected project duration, Te = 33.50

EOT EOT
CP: 10-40-60-80-100-110 (C-G-K-N-P) Act
i j
te
Var proj = 2.63 ; σ proj = 1.62 LOT LOT

NICMAR, PUNESANJAY BHOYAR

Events analysis:
Event No. EOT LOT Slack Remarks
10 0 0 0 Critical
20 3.17 9.50 6.33 Non-Critical
30 5.00 17.16 12.16 Non-Critical
40 7.16 7.16 0 Critical
50 10.17 16.50 6.33 Non-Critical
60 17.16 17.16 0 Critical
70 15.33 21.67 6.33 Non-Critical
80 24.83 24.83 0 Critical
90 21.16 24.50 3.33 Non-Critical
100 27.67 27.67 0 Critical
110 33.50 33.50 0 Critical

NICMAR, PUNE SANJAY BHOYAR

 PERT analysis:
 Probability of completing project in 30 weeks
 Te = 33.50 weeks; σproj = 1.62; Ts=30 weeks
 z = (Ts – Te)/ σproj
 Z = (30-33.50)/1.62 = -2.16
 Corresponding, p = 0.0154 = 1.54%
 Probability of completing project in 35 weeks
 Te = 33.50 weeks; σproj = 1.62; Ts=35 weeks
 z = (Ts – Te)/ σproj
 Z = (35-33.50)/1.62 = 0.93
 Corresponding, p = 0.8238 = 82.38%
 Probability of completing project in 37 weeks
 Te = 33.50 weeks; σproj = 1.62; Ts=37 weeks
 z = (Ts – Te)/ σproj
 Z = (37-33.50)/1.62 = 2.16
 Corresponding, p = 0.9846 = 98.46%
NICMAR, PUNE SANJAY BHOYAR
PERT analysis…
 Duration for 90% certainty
 For, p = 0.90 => Z = 1.29
 z = (Ts – Te)/ σproj
 1.29 = (Ts – 33.50)/ 1.62
 Ts = 35.58 weeks

NICMAR, PUNE SANJAY BHOYAR