PERT (program evaluation and review technique) is a systematic procedure for using network analysis

systems for planning, measuring progress against schedule evaluating changes to schedule, forecasting
future progress, and predicting and controlling costs.

"PERT" was developed primarily to simplify the planning and scheduling of large and complex projects. It
was developed for the U.S. Navy Special Projects Office in 1957 to support the U.S. Navy's Polaris
nuclear submarine project.

Basic underlying concept

Arrow diagram or network – is a graphic model showing interdependencies between various project
activities by means of a simple charting technique. It is a logic diagram of a project.
- In a network, the circles represent events and the lines connecting any two circles represent activities.

Event is a point that marks the start or completion of one or more activities. It consumes no time and
uses no resources.

1. Predecessor event - an event that immediately precedes some other event without any other
events intervening.
2. Successor event - an event that immediately follows some other event without any other
intervening events.

* An event can have multiple predecessor/successor events and can be the predecessor/successor of
multiple events.

Activity is the actual performance of a task which consumes time and requires resources (such as labor,
materials, space, machinery). It can be understood as representing the time, effort, and resources
required to move from one event to another. A PERT activity cannot be performed until the predecessor
event has occurred.

PERT – time analysis contains a sequence of arrows showing interrelationships among activities with
time being the basic element in these activities. The activities are shown from left to right in the
necessary order of their accomplishment. Workers must complete all the activities leading to an event
before the event occurs. The activities in a project are related to each other in various ways. These
relationships are termed interdependencies..

• Event 2 and 3 are both dependent on the occurrence of Event 1. Event 4 cannot occur until
activities 1-2 and 1-3 have all been performed.

Sub-activity - activity can be further decomposed into a set of sub-activities. For example, activity A1
can be decomposed into A1.1, A1.2 and A1.3. Sub-activities have all the properties of activities; in
particular, a sub-activity has predecessor or successor events just like an activity. A sub-activity can be
decomposed again into finer-grained sub-activities.

Expected Activity Time

It is computed using the weighted average of the shortest time (optimistic time), the most likely
(average) time, and the longest time (pessimistic time). The formula for time estimations using the beta
probability distribution is
Te = to + 4 tm + tp
6
optimistic time (to) - the minimum possible time required to accomplish an activity (o) or a path (O),
assuming everything proceeds better than is normally expected
pessimistic time (tp) - the maximum possible time required to accomplish an activity (p) or a path (P),
assuming everything goes wrong (but excluding major catastrophes).
most likely time (tm) - the best estimate of the time required to accomplish an activity (m) or a path
(M), assuming everything proceeds as normal.
expected time (te) - the best estimate of the time required to accomplish an activity (te) or a path (TE),
accounting for the fact that things don't always proceed as normal (the implication being that the
expected time is the average time the task would require if the task were repeated on a number of
occasions over an extended period of time).

Concept of Critical Path

Each activity consumes resources and has a time dimension. In PERT, the activity duration is specified in
terms of three time estimates: most optimistic, most likely, and most pessimistic durations. In any
network, there is always at least one connected path that goes from the start event to the end event.
The path that takes the longest time to reach is called the Critical Path.

(Use the second illustrated figure)

Path 1-2-4 : 4 + 10 = 14 weeks

Path 1-3-4: 12 + 8 = 20 weeks

The critical path is 1-3-4 because it has a total time requirement of 20 weeks. The critical path provides
very vital planning and control information because it can show that:
1. The project will take 20 weeks to complete.
2. If an activity slips while on the path, the end event will slip by a corresponding amount, thus
increasing the project duration.
3. The activities on this path are the most critical from a schedule standpoint.
4. The management should focus its attention on the activities that fall on the critical path.

The activities that do not lie on the critical path have varying amount of “slack” time associated with
them.

Slack – means the length of time by which a particular activity can slip without having any delaying
effect on the end event.
- Measure of the excess time and resources available to complete a task. It is the amount of time
that a project task can be delayed without causing delay in any subsequent tasks (free float) or
the whole project (total float).

Positive slack – would indicate ahead of schedule

Negative slack – would indicate behind schedule
Zero slack – would indicate on schedule
Activities 1-2 and 2-4 have combined slack of 6 weeks. Schedules in these activities can be “slipped” six
weeks without delaying the scheduled deadline for Event 4.

Nota bene: if this six-week slippage did occur, part 1-2-4 would also become critical.

Slack also introduces flexibility into the network because it serves as a buffer for events not located in
the critical path. When time lags appear on the critical path, managers can transfer materials, labor and
equipment to the problem areas. Manages however must be alert to the effect of these transfers on
other paths particularly if they would create new problems or other paths.

Cost estimating

Network scheduling systems calculate the start and end dates for the activities (or work packages) from
the estimated times (i.e., activity durations) and the start of the beginning event. Once the schedule is
determined, each work package’s cost is estimated. When this estimating process is completed, a
project time-phased budget is developed.
- It is the process of approximating the cost of a program, project, or operation, which includes but not
limited to labor, materials, equipment, services, software, hardware, facilities, contingency costs.

One of the estimation methods is three point estimating. Under this technique, the most commonly
used method is the PERT.
Three PERT estimates are as follows:
- Most likely cost (cm) – considers a typical case and everything goes as usual.
- Pessimistic cost (cp) – considers the worst case and assumes that almost everything goes wrong.
- Optimistic cost (co) – considers the best case and concludes that everything goes better than
presumed.
PERT estimate formula is ce = (co + 4cm + cp)/6
Estimates derived from this technique are better than the other techniques because it minimizes the
biased view from the date and provides a more accurate estimate.

Activity Predecessors Optimistic Most Pessimistic Expected time

likely

A None 1 3 5 3

B None 1 2 3 2

C None 3 5 7 5
D A 3 4 5 4

E B 3 4 5 4

F B 5 6 13 7

G C 5 6 13 7

H D, E 2 8 14 8

I G, F 5 6 13 7