Program Evaluation and Review Technique (PERT) 1
• Assumes an activity’s duration Program Evaluation Review
Technique (PERT)
follows a probability distribution
not a single value probabilistic
(Stochastic)
• Accounts for uncertainty in activity
duration estimates
• Provides estimates of project
duration probabilities
• Best used for highly uncertain
projects
New product development
Unique or first-time projects
Research and development
2
PERT (3-points estimation)
• These 3 points are Program Evaluation Review
Technique (PERT)
Optimistic Time (a) (extremely well)
Pessimistic Time (b) (extremely well)
Most likely Time (m) (probable time)
• Uses Beta Distribution Assumption or Triangle
distribution
3
PERT (3-points estimation)
. hat is the probability of completing the following
project within 12 days?
Activity Predecessor a m b
A NIL 2 3 10
B A 1 2.5 7
C A 4 5 6
D B,C 0.5 1.5 5.5
4
PERT (3-points estimation) Calculations
Steps to find the probability
Get Te for each activity: Te = (a + 4m + b) / 6
Get CP for project by using Te (explained at next slide)
Get Sigma for each critical activity : sactivity = (b activity –a activity) / 6
Get the Variance for each critical Activity Vactivity = s2 = ((b - a) / 6) 2
Get The Summation of Vs (critical activities): Summation of Vs =Vtactivity
Get spath (standard Deviation of the CP) : = spath = (summation) ½
Get The Z value Z = (Expected Completion Date – CP) /
spath
Get the probability form the table (normal distribution table)
PERT (3-points estimation) 5
Activity Predecessor a m b Te s V=(s) 2
A NIL 2 3 10 4 8/6 1.78
B A 1 2.5 7 3 1 1.00
C A 4 5 6 5 2/6 0.11
D B,C 0.5 1.5 5.5 2 5/6 0.69
11 2.58
CP= A + C + D = 11 d (of Tes)
sCP = Square Root of (Summation of Variance of Critical paths) = 2.58
sCP = (2.58) ½
= 1.6
Z = (Expected Completion Date – CP) / sCP
Z = (12 – 11) / 1.6
=0.622171
From a Z-table for standard normal distributions
Probability of completion = 71.3125
Z most of the time equals one of the 1 sigma, 2 sigma, 3 sigma, …, 6 sigma
6
PERT (3-points estimation)
Step to find Critical path of this project is:
PERT (3-points estimation) 7
Activity Predecessor a m b Te s V=(s) 2
A NIL 2 3 10 4 8/6 1.78
B A 1 2.5 7 3 1 1.00
C A 4 5 6 5 2/6 0.11
D B,C 0.5 1.5 5.5 2 5/6 0.69
11 2.58
CP= A + C + D = 11 d (of Tes)
sCP = Square Root of (Summation of Variance of Critical paths) = 2.58
sCP = (2.58) ½
= 1.6
Z = (Expected Completion Date – CP) / sCP
Z = (12 – 11) / 1.6
=0.622171
From a Z-table for standard normal distributions
Probability of completion = 71.3125
Z most of the time equals one of the 1 sigma, 2 sigma, 3 sigma, …, 6 sigma
Sigma and Probability Distribution 8
1. 1 Sigma (1σ) = 11 1.6 = 9.4 - 12.6 (probability of (68.2%) to be within this estimates)
2. 2 Sigma (2σ) = 11 3.2 = 7.8 - 14.2 (probability of (95.4%) to be within this estimates)
3. 3 Sigma (3σ) = 11 4.8 = 6.2 - 15.8 (probability of (99.7%) to be within this estimates)
4. 4 Sigma (4σ) = 11 6.4 = 4.6 - 17.4 (probability of (99.9%) to be within this estimates)
Te
68.2%
95.4%
99.7%
99.9%
σ
Mean
-4 -3 -2 -1 +1 +2 +3 +4
Probability Distribution Curve
9
Sigma and Probability Distribution
Probability Distribution Curve
10
PERT
Act. Pred. O M P
A -- 4 6 8
B -- 1 4.5 5
C A 3 3 3
D A 4 5 6
E A 0.5 1 1.5
F B,C 3 4 5
G B,C 1 1.5 5
H E,F 5 6 7
I E,F 2 5 8
J D,H 2.5 2.75 4.5
K G,I 3 5 7
1. What is the probability the project will be completed within (24) time unit?
2. What is the probability the project will be completed within (25.8) time
unit?
11
PERT
Activity Expected Time Variance
A 6 4/9
B 4 4/9
C 3 0
D 5 1/9
E 1 1/36
F 4 1/9
G 2 4/9
H 6 1/9
I 5 1
J 3 1/9
K 5 4/9
ACFIK 23 2
12
PERT
1. Case of 24
Vpath = VA + VC + VF + VI + VK
= 4/9 + 0 + 1/9 + 9/9+ 4/9
=2
spath = (2)1/2 = 1.414
Z = (X- CP) / spath
Z= (24 - 23)/ spath = (24-23)/1.414 = .71
From the Standard Normal Distribution table:
P = .7612
2. Case of 25.8
Probability the project will be completed within (25.8) time unit
Means 2s, so Probability = 0.5 + 95.4% / 2 = 0.977
