Project Management

[ Project Management Topics ]

Program Evaluation and Review Technique (PERT)

Program Evaluation and Review Technique (PERT) was developed for project that come with a good amount of uncertainty in the durations of the tasks but you still need to have some form of an accurate schedule. It was created in the 1950's by the United States Navy when they were trying to develop a missile that could be launched from a submarine (and develop the submarine that could launch them).

PERT makes use of the normal probability distribution, "the normal probably distribution relates the event of something happening to the probability that it will occur. It turns out that by experiment, the normal distribution (bell curve) describes many phenomena that actually occur. The duration as well as the estimated cost of project activities comes close to matching normal distribution." (Newell, 2002, p. 70)

Bell Curve Image

Thus, we just need to be able to determine three values: 1) best case optimistic, 2) worst case pessimistic, and 3) most likely

Once we know these we can then calculate the expected value and the standard deviation. For the expected value we just take the weighted average using this formula:

Expected value = [optimistic + pessimistic + (4 x most likely) / 6
Standard deviation = (pessimistic - optimistic) / 6

With these basic calculations we can determine the probable dates the project will have.

Lets say we are trying to create an estimate for clearing out a lot for construction of a new building. The lot does not have any known problems such as high chemical content , buried garbage or refuse, or similar. However, finding such obstacles is possible, although unlikely. Thus the company guesses it will take 2 weeks to clear the lot, but realizes if an unexpected obstacle is met it could take up to 2 months. If there are no problems and all operations flow smoothly with no weather inhibitions it could take as short as a week. Thus we have the following data:

Optimistic: 7 days
Most likely: 14 days
Pessimistic: 56 days

With this information we can determine that the expected time is actually 7+56+(4 x 14)/6 = 19.8 days
If we want to know how accurate this is we can look at our standard deviation: 8.17 days

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----- REFERENCES -----

Newell, M. W. (2002). Preparing for the Project Management Professional (PMP) Certification Exam. New York, NY: American Management Association.