PROGRAMME EVALUATIO N AND REVIEW TECHNIQUE

The advancing technological revolution of space age has brought an explosive

growth of a new family of planning and controlling techniques. Much of the
development work has been done in the defence sector, but construction, chemical
and other industries have played a crucial role. These techniques are networking
based planning and procedures. These are known by different names, such as

1. PERT-Programme Evaluation and Review Technique

2. PERT/ Cost
3. PERT/ Time
4. CPM- Critical Path Method
5. CPA- Critical Path Analysis
6. CPS- Critical Path Scheduling
7. GERT- Graphical Evaluation and Review Technique, etc.

Perhaps the best known technique is PERT.

The special project office of the US Navy, concerned with performance trends on
large military development programmes introduces PERT on its Polaris Weapon
System in 1958, after the technique was developed with the aid of a consulting
firm in the US. Since that time, PERT has spread rapidly throughout the defence
forces in all countries as well as to large industrial projects. In our country, large
public scale organizations like Fertilizers Corporation Of India, Indian Oil
Corporation, Oil and Gas Commission, National Thermal Power Corporation,
Engineers India Limited, Engineering Projects Corporation, Bharat Heavy
Electricals Limited, as well as private companies like Larson and Turbo, Reliance
Industries, TISCO, etc. Claim to use PERT successfully for new projects,
diversification, replacement, and even for maintenance.
REQUISITIES OF PERT:

The requisites of PERT are important if the system is to be used effectively in

Project Management. These are detailed here under:

- The project goal needs to be clearly and unambiguously identified; all the
individual tasks in a given programme need to be visualised in a logical
manner, creating a work- break structure. These are put in a network flow
diagram, which is comprised of events and activities; the duration of an
activity, except in a time scale network, is not represented by the length of
the line. An activity succeeding an event cannot occur until all activities
leading to it are accomplished.
- All activity paths need to be completed by appropriate events, and a
description of each activity needs to be written above the arrow linking the
events. Emphasis is laid on defining events and activities with precision so
that there is no difficulty in monitoring actual accomplishments.
- Events and activities need to be sequenced in the network under a logical set
of ground rules which allow the determination of the critical paths, and all
constraints and interdependencies need to be clearly shown in the diagram.
The numbering of the events can be forward or backward, depending upon
whether the network diagram begins from the starting point or the end point
(the goal)

Thus the PERT network analysis consists of following steps:

I. Clearly defining the goal of the project.

II. Obtaining work- break structure to set of individual jobs, and arranging
them in a logical fashion.
III. Estimating the job duration, making provisions for optimistic and
pessimistic schedules.
IV. Identifying the resource requirement constraints
V. Locating the schedule of dates for each activity by planning detailed
control structure.
VI. Preparing project control systems and identifying the requirements of
progress reports for different levels of management.
VII. Developing the critical path and slack times.
 VIII. Crashing the time- optimum cost levels on the basis of costs.
IX. Updating the network continuously by systemised methods
X. Monitoring, evaluating and reviewing the network continuously.

STEPS INVOLVED IN THE PERT PLANNING PROCESS:

1. IDENTIFY ACTIVITIES AND MILESTONES: These activities are the

tasks required to complete the project. The milestones are the events
marking the beginning and the end of one or more activities.
2. DETERMINE ACTIVITY SEQUENCE: This step may be combined with
the activity identification step since the activity sequence is known for some
tasks. Other tasks may require more analysis to determine the exact order in
which they must be performed.
3. CONSTRUCT THE NETWORK DIAGRAM: Using the activity sequence
information, a network diagram can be drawn showing the sequence of the
serial and parallel activities.
4. ESTIMATE ACTIVITY TIME: Weeks are a commonly used unit of time
for activity completion, but any consistent unit of time can be used. A
distinguishing feature of PERT is its ability to deal with uncertainty in
activity completion times. For each activity, the model usually includes three
time estimates:
i. OPTIMISTIC TIME (OT): Generally, the shortest time in which the
activity can be completed. (This is what an inexperienced manager
believes)
ii. MOST LIKELY TIME (MT): The completion time having the highest
probability. This is different from expected time. Seasoned managers
have an amazing way of estimating very close to actual data from
prior estimation errors.
iii. PESSIMISTIC TIME (PT): The longest time that an activity might
require.

The expected time for each activity can be approximated using the following
weighted average:

EXPECTED TIME= (OT+4*MT+PT)/ 6

 The expected time might be displayed on the network diagram.

VARIANCE FOR EACH ACTIVITY IS GIVEN BY:

[(PT- OT)/ 6]2

5. DETERMINE THE CRITICAL PATH: The critical path is determined by

adding the times for the activities in each sequence and determining the
longest path in the project. The critical path determines the total time
required for the project. If the activities outside the critical path speed up or
slow down (within limits), the total project time does not change. The
amount of time that a non- critical path activity can be delayed without
delaying the project is project referred to as slack time. If the critical path is
not immediately obvious, it may be helpful to determine the following four
quantities for each activity:
 ES- Earliest Start Time
 EF- Earliest Finish Time
 LS- Latest Start Time
 LF- Latest Finish Time

These times are calculated using the expected time for the relevant
activities. The Es and EF of each activity are determined by working
forward through the network and determining the earliest time at which
an activity can start and finish considering its predecessor activities.

The latest start and finish times are the latest times that an activity can
start and finish without delaying the project. LS and LF are found by
working backward through the network. The difference in the latest and
earliest finish of each activity is that activity’s slack. The critical path
then is the path through the network in which none of the activities have
slack.

The variance in the project completion time can be calculated by

summing the variances in the completion times of the activities in the
critical path. Given this variance, one can calculate the probability that
the project will be completed by a certain date.
 Since the critical path determines the completion date of the project, the
project can be accelerated by adding the resources required to decrease
the time for the activities in the critical path. Such a shortening of the
project sometimes is referred to as project crashing.

6. UPDATE AS PROJECT PROGRESSES: Adjustments are made in the

PERT chart as the project progresses. As the project unfolds, the estimated
times can be replaced with actual times. In cases where there are delays,
additional resources may be needed to stay on schedule and the PERT chart
may be modified to reflect the new situation.

ADVANTAGES OF PERT:

PERT is useful because it provides following information:

- PERT gives management the ability to plan the best possible use of
resources to achieve a given goal within the overall time and cost
limitations. It enables the project executives to mange variety of
programmes, as opposed to repetitive production situations; it helps the
project manager to handle the uncertainties involved in programming where
no standard time data are available; it utilises the time network analysis as a
base of method of approach to determine manpower, material, machinery
and capital requirements. The use of PERT needs a clear definition of goals
for proper communication at all levels; the feedback and review of the
different stages of project helps the management to take corrective measures
and formulate strategies for allocating the limited resources in case of
emergencies.
- PERT is an effective mechanism for planning, scheduling, and co-ordinating
the different activities in project buying. The tenders for many public sector
projects insist on PERT network charts to be submitted along with the
quotations.
- PERT is useful for balance- sheet preparation, annual shutdown and
overhauls to identify the critical activities; it is particularly useful in
construction and R&D projects because it makes room for uncertainties
associated with futuristic decisions on project planning. It not only helps the
management in deciding when to initiate the follow-up and provide the
 materials, but also gives an estimate of the consequences of not meeting
such demands. Thus, it helps avoid last minute delays, and panic buying
resulting in cost over runs. Because of the logical inter- relationships
between the planned elements, the project team can think of alternative
vendors.
- PERT enables the optimum utilisation of the resources by their transfer from
the slack to busy segments in the network in order to accomplish the
stipulated goal. It is useful for pre-crises planning and buying when the
‘force majeur’ clauses are operative because the responsibilities to project
executives are allocated well in advance to tackle such emergencies. The
summation manpower data in PERT often reveals a manpower or funding
restrictions in project planning, and forces a re- planning cycle if no
alternatives are evaluated.
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