PERT- Program Evaluation and Review Technique

 

Program Evaluation and Review Technique (PERT)

Introduction

In today’s dynamic business environment, project management is crucial for achieving organizational goals efficiently. The Program Evaluation and Review Technique (PERT) is a powerful project management tool that helps managers plan, schedule, and control projects with uncertain durations. Developed by the U.S. Navy in the 1950s for the Polaris missile project, PERT has since been widely used in research & development, construction, and large-scale infrastructure projects.

PERT is a probabilistic project scheduling technique that focuses on estimating the time required to complete each task while considering uncertainty. Unlike traditional project management methods, PERT provides a scientific approach to determining the expected project duration and identifying the critical path, which is essential for timely project completion.

Features of PERT:

• Network-Based Approach: Represents the project as a network of activities and milestones.

• Three-Point Estimation: Uses optimistic, pessimistic, and most likely time estimates to calculate expected activity duration.

• Focus on Uncertainty: Helps in decision-making under uncertainty by providing a realistic project timeline.

• Identification of Critical Path: Determines the sequence of tasks that directly impact project duration.

PERT Network Components

A PERT chart consists of the following elements:

• Nodes (Events): Represent milestones or points in time when an activity starts or ends.

• Arrows (Activities): Represent tasks that need to be performed between events.

• Dummy Activities: Used to represent dependencies between tasks without consuming time or resources.

For example, in a new product launch project, nodes can represent stages like market research, prototype development, testing, and final launch, while arrows represent the tasks required to move from one stage to another.

PERT Time Estimation: The Three-Point Approach

A key aspect of PERT is the three-time estimation method, which helps project managers deal with uncertainty in task durations. The three-time estimates used in PERT are:

1. Optimistic Time (t₀) – The shortest time in which an activity can be completed under ideal conditions.

2. Most Likely Time (tₘ) – The normal or most probable time required under typical conditions.

3. Pessimistic Time (tₚ) – The longest time an activity might take due to potential risks and delays.

The Expected Time (TE) for an activity is calculated using the formula:

$$TE=\frac{t_0+4t_m+t_p}{6}$$

This formula gives a weighted average, where tₘ (most likely time) has the highest weight (4/6 or 67%), ensuring a realistic estimation.

Example Calculation of PERT Time Estimates

Consider a software development project where a manager estimates the time required to complete the coding phase:

• Optimistic time (t₀) = 10 days

• Most likely time (tₘ) = 15 days

• Pessimistic time (tₚ) = 25 days

Using the PERT formula:

$$TE=\frac{10+4(15)+25}{6}$$$$TE=\frac{10+60+25}{6}=\frac{95}{6}=15.83\text{ days}$$

So, the expected duration for the coding phase is 15.83 days.

Identifying the Critical Path in PERT

The Critical Path is the longest sequence of dependent activities in a PERT network. If any task on this path is delayed, the entire project will be delayed.

Example: Construction of a Shopping Mall

Consider a shopping mall construction project with the following activities:

Activity	Predecessor	Optimistic (t₀)	Most Likely (tₘ)	Pessimistic (tₚ)	Expected Time (TE)
Site Preparation	-	5	8	12	8.33
Foundation Work	Site Preparation	7	10	15	10.83
Structural Work	Foundation Work	12	18	25	18.33
Interior Work	Structural Work	8	12	20	12.66
Final Inspection	Interior Work	5	6	10	6.33

The critical path is determined by summing up the TE of the longest sequence:

$$8.33+10.83+18.33+12.66+6.33=56.48\text{ days}$$

Thus, the total expected project duration is approximately 56.5 days, and any delay in critical path activities will extend the entire project timeline.

Advantages of PERT

• Helps manage uncertainty by using probabilistic time estimates.

• Improves decision-making by identifying the critical path.

• Facilitates better resource allocation by recognizing priority tasks.

• Effective for complex projects with multiple dependencies.

 Limitations of PERT

• Subjective time estimates: Based on expert judgment rather than actual data.

• Complex calculations: Large-scale projects with numerous activities can be difficult to analyze.

• Assumes independence: Dependencies between tasks may not always be clear-cut.

  
  

Case Study 1: NASA’s Apollo Mission

NASA used PERT extensively in the Apollo space program to plan and track thousands of interdependent activities. By applying PERT, they were able to estimate mission timelines, allocate resources efficiently, and land the first humans on the moon in 1969.

Case Study 2: Construction of Delhi Metro

During the Delhi Metro construction, engineers used PERT to estimate completion times for various phases, such as land acquisition, track laying, and station construction. This ensured that critical deadlines were met while accounting for uncertainties like weather and regulatory approvals.

Case Study 3: Pharmaceutical Drug Development

In pharmaceutical companies, PERT is used to manage drug development projects, which involve multiple phases: R&D, clinical trials, FDA approvals, and market launch. The technique helps in estimating timelines despite uncertainties like regulatory changes and clinical trial delays.

Conclusion

PERT is an essential tool in project management, especially for projects with uncertain timelines. By using three-time estimation, network diagrams, and critical path analysis, managers can make informed decisions, allocate resources efficiently, and mitigate risks.

Whether in software development, construction, space exploration, or pharmaceuticals, PERT plays a crucial role in ensuring project success. As an MBA student, mastering PERT will enhance your project management skills and strategic decision-making abilities, making you a valuable asset in any business environment.

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