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Program Evaluation and
Review Technique (PERT)
■ PERT (Program Evaluation and Review Technique) – Based on the idea that estimates are uncertain – Uses ranges and probability and provides an expected value to determine duration of the project – E.g. • The most likely completion time is 4 weeks but • It could be anywhere between 3 weeks and 8 weeks Evaluating risks to the schedule
Use PERT to evaluate the effects of uncertainty.
Using single expected duration. Using activity standard deviation Using likelihood of meeting targets. Applying the PERT Technique PERT (Program Evaluation Review Technique) takes account of the uncertainties in the duration of activities within a project. Standard deviation is used as a ranking measure of the degree of uncertainty of risk of each activity. The Z value is calculated for each node that has a target date. Using PERT to evaluate the effects of uncertainity PERT requires three estimates Most likely time (m) The time we would expect the task to take under normal circumstances. Optimistic time (a) Shortest time in which we could expect to complete the task. Pessimistic time (b) Worst possible time in which we could expect to complete the task. Probabilistic Time Estimates ■ Beta distribution – a probability distribution traditionally used in CPM/PERT Mean (expected a + 4m + t= 6 time): b 2 b- Variance: 2 a6 where = a = optimistic estimate m = most likely time estimate b = pessimistic time Activity Time Estimates TIME ESTIMATES (WKS) MEAN TIME VARIANCE ACTIVITY a m b t б2 1 6 8 10 8 0.44 2 3 6 9 6 1.00 3 1 3 5 3 0.44 4 2 4 12 5 2.78 5 2 3 4 3 0.11 6 3 4 5 4 0.11 7 2 2 2 2 0.00 8 3 7 11 7 1.78 9 2 4 6 4 0.44 10 1 4 7 4 1.00 11 1 10 13 9 4.00 Project Network with Probabilistic Time Estimates: Example Equipment installation Equipment testing and 1 4 modification 6,8,10 2,4,12 Syste Final m debuggin System g trainin developme 10 Manu g 1,4,7 nt 3,7,11 Start al 8 Finish 2 testin 3,6,9 11 g Positio 2,3,4 9 1,10,13 5 n 2,4,6 Job System recruiti Training changeov ng Syste 6 m er 3 testin 3,4,5 1,3,5 g Orientati on 7 2,2,2 Activity Early, Late Times, and ACTIVITY tSlack б ES EF LS LF S 1 8 1 9 1 0.44 0 6 0 6 0 8 1.00 0 3 2 5 2 2 0.44 0 13 16 21 8 2.78 8 9 6 9 0 6 0.11 6 7 5 9 2 3 0.11 3 5 14 16 11 0.00 3 16 9 16 0 3 1.78 9 13 12 16 3 4 0.44 9 17 21 25 8 1.00 13 25 16 25 0 5 4.00 16 5 Total project variance
2 = б22 + б52 + б82 + б112
= 1.00 + 0.11 + 1.78 + 4.00 = 6.89 weeks Probabilistic Network Analysis Determine probability that project is completed within specified time x- Z= where = tp = project mean time = project standard deviation x = proposed project time Z = number of standard deviations x is from mean Probability of Completion Time What is the probability that the project is completed within 30 weeks? P(x 30 x- weeks) = 6.89 weeks 2 Z= = 6.89 = 30 - 25 2.62 = 2.62 weeks = 1.91 = 25 x = 30 Time (weeks)
From Z scores Table, a Z score of 1.91 corresponds to a
probability 0.9719. Z values Probability of Completion Time What is the probability that the project is completed within 22 weeks? x- 2 = 6.89 Z P(x 22 weeks) weeks = = 6.89 = 22 - 2.6 = 2.62 25 2 weeks = -1.14 x = 22 = Time 25 (week s) From Z scores Table, a Z score of -1.14 corresponds to a probability of 0.1271 Z values