Program/Project Evaluation and Review Technique

Program/Project Evaluation and Review Technique (PERT) is a network technique,

designed for project planning and scheduling that uses probabilistic activity times. It is used to
handle uncertain activity times. The PERT was developed under the sponsorship of the U.S. Navy
Special Projects Office in 1958 as a tool for scheduling and controlling the Polaris missile project.
Stochastic PERT is a project scheduling technique in which the activity times are of
probabilistic in nature, while Deterministic PERT is a project scheduling technique in which the
activity time are assumed to be known with certainty. Expected Time is the average activity time
and Beta Distribution is a probability distribution used to describe activity times.

Three Estimates of the Activity Time

1. Optimistic Time is a PERT activity time estimate based on the assumption that it would
take the shortest possible time to complete an activity if everything went right.
2. Most Probable Time is a PERT activity time estimate based on the assumption that the time
would occur most frequently if the activity is repeated many times.
3. Pessimistic Time is a PERT activity time estimate based on the assumption that it would
take the longest possible time to complete an activity if everything went wrong.

Mean and Variance of Beta Distribution

𝑎+4𝑚+𝑏 𝑏−𝑎
𝑡= 𝜎2 = ( )
6 6

where:
t = estimate of expected activity time
a = optimistic time
m = most probable time
b = pessimistic time
𝜎 2 = variance
To understand on how the PERT is being implemented let us examine the next example.
Example: The AUS Company is planning to develop a new chemical process. They identified the
following activities:
Table 1.
Activity Description Immediate a m b
Predecessor
A Test method 1 for the process - 10 15 26
B Test method 2 for the process - 8 10 18
C Select the best method and refine the A,B 4 5 6
process
D Complete initial preparation of - 10 12 14
production facilities
E Train personnel D 1 2 3
F Develop final procedures manual D 1 3 11
G Run tests on the refined process C,E 1 2 3
H Adjust the production method F,G 1 2 3
I Set up complete production system F 3 4 5
J Run final tests H,I 1 2 3

A. Develop a project network and determine the expected project completion time.
B. What is the probability that project completion time will meet the 30 week deadline?

Solution:
Step 1: Compute for the expected times and variances.
Expected Times:
10+4(15)+26 96 1+4(3)+22 24
𝑡𝐴 = = = 16 𝑡𝐹 = = =4
6 6 6 6
8+4(10)+18 66 1+4(2)+3 12
𝑡𝐵 = = = 11 𝑡𝐺 = = =2
6 6 6 6

4+4(5)+6 30 1+4(2)+3 12
𝑡𝐶 = = =5 𝑡𝐻 = = =2
6 6 6 6
10+4(12)+14 72 3+4(4)+5 24
𝑡𝐷 = = = 12 𝑡𝐼 = = =4
6 6 6 6
1+4(2)+3 12 1+4(2)+3 12
𝑡𝐸 = = =2 𝑡𝐽 = = =2
6 6 6 6

Variances:
26−10 2 11−1 2
𝜎𝐴 2 = ( ) = 2.672 = 7.13 𝜎𝐹 2 = ( ) = 1.672 = 2.78
6 6
 18−8 2 3−1 2
𝜎𝐵 2 = ( ) = 1.672 = 2.78 𝜎𝐺 2 = ( ) = 0.332 = 0.11
6 6

6−4 2 3−1 2
𝜎𝐶 2 = ( ) = 0.332 = 0.11 𝜎𝐻 2 = ( ) = 0.332 = 0.11
6 6

14−10 2 5−3 2
𝜎𝐷 2 = ( ) = 0.672 = 0.44 𝜎I 2 = ( ) = 0.332 = 0.11
6 6

3−1 2 3−1 2
𝜎𝐸 2 = ( ) = 0.332 = 0.11 𝜎𝐽 2 = ( ) = 0.332 = 0.11
6 6

Table 2 shows the summary table on the expected times and the variance of the activities for
AUS Company project.

Activity a m b t 𝝈2

A 10 15 26 16 7.13
B 8 10 18 11 2.78
C 4 5 6 5 0.11
D 10 12 14 12 0.44
E 1 2 3 2 0.11
F 1 3 11 4 2.78
G 1 2 3 2 0.11
H 1 2 3 2 0.11
I 3 4 5 4 0.11
J 1 2 3 2 0.11

Step 2: Construct the network diagram. (See Figure 1)

Figure 1

Start B G

E H

D
J Finish

F I

Step 3: Determine the completion time per activity. (See Figure 2)

Figure 2

A
16
C
5
B G
Start 2
11
E
2
D H
12 2 J
Finish
2
F I
4 4

Step 4: Determine the earliest start time and earliest finish time using forward pass and the formula
EF = ES+t. (See Figure 3)

A 0 16
16
C 16 21
5
B 0 11 G 21 23
Start 2
11
E 12 14
2
D 0 12 H 23 25
12 2 J 25 27
Finish
2
F 12 16 I 16 20
4 4

Step 5: Develop the latest finish time and latest start time using the backward pass. (See Figure 4)
Figure 3
A 0 16
16 0 16
C 16 21
5 16 21
B 0 11 G 21 23
Start 2 21 23
11 5 16
E 12 14
2 19 21
D 0 12 H 23 25
12 5 17 2 23 25
J 25 27
Finish
2 25 27
F 12 16 I 16 20
4 17 21 4 21 25

Step 6: Compute for the slack of all activities using the formula provided below and identify the
zero slack to identify the critical path.

Slack = LS-ES=LF-EF

Table 3
Activity ES LS EF LF Slack Critical
Path
A 0 0 16 16 0 Yes
B 0 5 11 16 5 No
C 16 16 21 21 0 Yes
D 0 7 12 19 7 No
E 12 19 14 21 7 No
F 12 19 16 23 7 No
G 21 21 23 23 0 Yes
H 23 23 25 25 0 Yes
I 16 21 20 25 5 No
J 25 25 27 27 0 yes
Figure 4
Critical Path: A  C  G  H  J

A 0 16
16 0 16
C 16 21
5 16 21
B 0 11 G 21 23
Start 2 21 23
11 5 16
E 12 14
2 19 21
D 0 12 H 23 25
12 5 17 2 23 25 J 25 27
Finish
2 25 27
F 12 16 I 16 20
4 17 21 4 21 25

Therefore, the critical path is A  C  G  H  J with 27 weeks to finish the project.

E(t) = tA + tC + tG + tH + tJ = 16 + 5 + 2 + 2 + 2 = 27

Let us determine what probability thus the project will be done given a 30-week deadline. First is
to determine the variance of the critical activities. We will only consider all the variance of
activities A,C,G,H, and I.
𝜎 2 = 𝜎𝐴 2 + 𝜎𝑐 2 + 𝜎𝐺 2 + 𝜎𝐻 2 + 𝜎𝐽 2 = 7.13 + 0.11 + 0.11 + 0.11 + 0.11 = 7. 57

𝜎 2 = √𝜎 2 = √7.57 = 2.75

Now, we can solve for the z-test value.

𝑇−𝐸 (𝑡) 30−27 3
𝑧= = = = 1.09
𝜎 2.75 2.75

P(x ≤ 30) = P(z ≤ 1.09) = P(0 < z < 1.09) = 0.3621

Using z = 1.09 and the table for normal distribution, we will find that the probability of the project
meeting 30 weeks deadline is 0.3621 + 0.5000 = 0.8621 or 86.81%. Thus, even though activity
time variability may cause the completion time to exceed 27 weeks, there is an excellent chance
that the project will be completed before 30-week deadline.
Figure 5

Expected Completion time

27 30
| 0.5000 | 0.3621 |
Probability of AUS Company to the 30-week Deadline

STEPS IN ESTABLISHING CPM/PERT PROCEDURE

1. Develop a list of activities that make up a project.
2. Identify the immediate predecessors for each activity in the project.
3. Approximate the completion time for each activity.
4. Draw a project network showing the activities and immediate predecessors listed in steps
1 and 2.
5. Identify the earliest start and the earliest finish time for each activity by making a forward
pass through the network. The earliest finish time for the last activity serves as the total
time to complete the project.
6. Utilize the project completion time established in step 5 as the latest finish time for the last
activity and make a backward pass through the network to determine the latest start and
latest finish time for each activity.
7. Determine the slack time for the all activities.
8. Find the activity with zero slack; these are the critical path activities.
MANAGEMENT SCIENCE
Program/Project Evaluation and Review Technique

Submitted by:
Anilao, Elijah Joyce
Base, Crissa Mae
Comiso, Ricardo Jr.
Formarejo, Christine
Pagana, Fionalyn
Sagarino, Sandra
Villadiego, Jizelle
BSA – II CA2A1