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Project Evaluation and Review Technique (PERT) : Management Science
Project Evaluation and Review Technique (PERT) : Management Science
Management Science
Program Evaluation and
Review Technique (PERT)
- A networking technique used for planning and
controlling the activities in a project
- It provides management pertinent information about
a project such as:
1. Expected completion time of the project
2. When each activity in a project is scheduled to start
and finish
Program Evaluation and
Review Technique (PERT)
3. Which part of the project must be finished on time
to avoid making the whole project late
4. How resources may be shifted from one part to
another part of the project without affecting the
overall completion time of the project
5. The progress of each part of the project as of a
certain date
PERT Diagram
- An arrow diagram on a network showing the
interrelationships or interdependencies of the various
activities of a project
- Although more complex than Gantt Charts, a PERT
Diagram has the advantage of incorporating
probabilistic time estimates and identifying the critical
path
Terms
Node
- Can be called event when all the activities leading to
a node are finished (circle)
Event
- Represents a specified accomplishment at a
particular instant in time
- It represents the start or finish of an activity, such as
1 or 2 in the network
Terms
Branch
- Represents the activities in a project (arrow)
Activity
- Task to be accomplished
- It represents the time and resources necessary to
move from one node or event to another; For example,
activity from 1 to 2 in the network
Types of Activities
1. Series - An activity cannot be performed unless its
predecessor activity is finished
te = to + 4tm + tp
6
Path and Critical Path
Path - A Series of activities from start to finish
Critical Path
- The longest path through the network
- A delay in the completion of activities in the critical
path would cause a delay in the completion of the
entire project
- Shortening the total completion time of the whole
project can be accomplished only by shortening the
critical path
Slack Time
- The length of time by which a particular activity can
slip (be delayed) without having any delaying effect
on the end event
- Activities along the critical path have a slack of zero
- All non-critical activities have positive slack
Critical Path Method (CPM)
- May be considered as a subset of PERT
- A network technique that uses a deterministic time
and cost estimates
- Aside from cost estimates, CPM includes the concept
of crash efforts and crash costs
Crash Time
- The time required to complete an activity assuming
that all available resources (overtime, extra manpower,
etc.) are devoted to such activity
Crashing The Network
- Determining the minimum cost for completing the
project in minimum time so that an optimum trade-off
between time and cost is achieved
- Activity times and activity costs are estimated for
both the normal and crash efforts
- With these estimates, the project manager can
determine the costs of completing the project if some
of the activities are completed on a crash basis
Accountant’s Role in PERT
1. Determination of cost estimates and actual costs of
each activity in a project