PERT

What does PERT stand for?

Program Evaluation and Review Technique

How and why did it come about?

For some projects time is critical but cost
is not
Specifically for R&D projects in defence,
space related research etc

Many of these projects are very unique in

nature
There is no prior basis for estimating activity
duration

Many of these projects are also extremely

complex
Conventional PM tools do not fit the bill

Events leading up to the

development of PERT
Russia launches the
Sputnik Space Missile
in 1957, before the
Americans
The Americans are
embarrassed

Events leading up to the

development of PERT
The Americans
retaliate by planning
to launch the Polaris
Ballistic Missile

They cannot be
embarrassed further
by delaying the
launch

Events leading up to the

development of PERT
Expected durations of activities were
largely unknown
Project Planning and Control was initially
lacking on the Polaris project
Actual costs and project durations in the
initial stages exceed estimates by as much
as 50%

Events leading up to the

development of PERT
United States Department of Defense hires Booz
Allen Hamilton, to develop a Project
Management Technique for this project
Booz Allen Hamilton invents the PERT
technique in 1958.

What is PERT?
Technique to assist in project planning
when historical cost and time data are not
available or reliable
Usually associated with R&D and new
product development projects where the
uncertainty is great

What is PERT?
PERT statistically treats uncertainty
Estimates the likely duration time
Estimates the likelihood of meeting certain
milestones

Rarely used in construction

Can be used on projects where quantity
and productivity uncertainties exist

Comparing PERT and CPM

PERT
Assumes variability in
productivity rates and
therefore variability in
activity times
Milestone or event
focused
Probabilistic
calculations

CPM
Assumes fixed (or
very mildly varying)
activity durations
Duration or activity
focused
Deterministic
Calculations

How PERT works

Since activity times are uncertain, PERT uses
three time estimates for an activity
An optimistic duration (assumes high productivity) - To
A pessimistic duration (low productivity) - Tp
Not based on disasters etc
Based more on late material delivery, equipment
breakdowns, bad weather etc

A most likely duration - Tm

Not the average of the Optimistic and Pessimistic durations

It is the amount of time the activity will require most of the
time, if repeated many times

Probability Basics
Concrete Placement Data for Columns in a
Building

Frequency
Minutes to
Place

12 16 10 4

36 38 40 42 44 46 48 50 52 54 56 58 60

62

Histogram
Distribution of Concrete Placement Time

Frequency

20
15
10
5
0
36

38

40

42

44

46

48

50

52

Minutes to Place

54

56

58

60

62

Continuous Distribution
Distribution of Concrete Placement Time

Frequency

20
15
10
5
0
36

38

40

42

44

46

48

50

52

Minutes to Place

54

56

58

60

62

Normal Distributions

Normal Distribution
Also called the bell curve
Approximates many distributions we see in real
life and on construction sites
It can be defined by a mean () and a standard
deviation ()
The normal probability density function is
characterized by a unit area, with a mean of 0
and a variance of 1
F(x; , 2) =

<x<; 2 is called the variance

Unpacking the normal distribution

Mean average of all the values in the

distribution
For a probability density function is the
mean, median and mode

Standard Deviation a measure of the

dispersion of the data
=

Standard Deviation

Approximately 68% of values lie within 1 from

the mean
Approximately 95% of values lie within 2 from
the mean
Approximately 99.7% of values lie within 3
from the mean

Means and Standard Deviations

1 = 2 = 3
4 < 1
1

1 < 2 < 3

2
3

4 > 1; < 2,
although 1 = 2

The Central Limit Theorem

Completion times for each activity could follow

a variety of distributions
The sum of these distributions (i.e the
overall project time) will tend to follow a
normal distribution
So we assume that
1. The mean of the sum is the sum of the means
2. The variance of the sum is the sum of the variances
3. The distribution of the sum is a normal distribution
regardless of the shape of individual distributions

Cumulative Distribution Function

Gives the probability that a random variable X is
less than a given value x

Using the cumulative distribution

function
1. Convert the distribution into a standard normal
distribution (=0 and =1)
2. For a random variable X with a mean of and
a standard deviation of , the standardized
random variable is

3. Use the normal distribution table to find out the

probability of an event

Calculating the probability of an

event

A project is normally distributed and has a

mean duration of 4 days and a standard
deviation of 2.
1. What is the probability that the project will be
completed in 7 days?
2. In 3 days?

Completing within 7 days

=4, =2, X(variable)=7

Z = (7-4)/2 = 1.5
F(1.5) = 0.933
P(completing within 7 days) = 93.3%

Completing within 3 days

=4, =2
X(variable)=3
Z = (3-4)/2 = - 0.5
F(-z) = 1-F(z)
F(-0.5) = 1-F(0.5)
F(0.5) = 1-0.691 = 0.309
P(completing within 3 days) = 30.9%

Activity Properties in PERT

Activities follow a Beta distribution
Characterized by modal and extreme values

Activity properties contd..

Empirically it is accepted that
Expected duration of an activity is
Te = (To + 4Tm + Tp)/6

Standard deviation for the activity is

= (Tp - To)/6

Variance is
= 2

The PERT algorithm

1. For each activity, calculate the expected
duration, standard deviation and variance
2. Use the expected duration as the basis for
performing a forward and backward pass to
obtain critical path
3. Sum the variances to find the variance of the
entire project
4. Use the cumulative normal distribution table to
determine probability of event or project
completion

Use in construction
Can be used instead of CPM when
productivity is unknown or variable
Time data is often collected based on
experience
Can be used to predict the likelihood of
various events and milestones being met

An example
D

C
Start

Finish

Data table
Activity

To

Tm

Tp

10

Find expected project duration.

What is the likelihood that the project will finish within 20 days?

Step 1 - Calculate expected

duration and variances
Activity To

Tm

Tp

Te

0.66

0.44

5.33

5.17

0.5

0.25

10

6.33

5.17

0.5

0.25

4.5

0.83

0.69

5.17

0.83

0.69

Step 2 - Calculate Critical Path

0

0
F 4.5

C 5.17

Start
0

D 6.33

A4
0

Finish
0

B 5.33
0

E 5.17
0

0
G 5.17

Critical Path Calculations

0

10.3
D 6.33

A4
0

8.66

14.8
F 4.5

15

4.66

15

4.66

19.5

9.17

19.5

C 5.17

Start
0

10.3

5.33

3.83

3.83

Finish
9.17

9.17

B 5.33

19.5

14.3

14.3

E 5.17
9.17

9.17

19.5

19.5
G 5.17

14.3

14.3

19.5

19.5

Step 3 - Cumulative Progress

Activity To

Tm

Tp

Te (ES)

0.66

0.44

5.33

9.17

0.5

0.69

10

10.33

1.44

14.34

0.5

0.94

14.83

0.83

2.13

19.51

0.83

1.63

Probability of finishing in 20
days
=19.51, 2 = 1.63 (critical path variance)
X(variable)=20
Z = (20-19.51)/1.28 = 0.38
F(0.38) = 0.648
P(completing within 20 days) = 64.8%

Thank You