Program Evaluation Review Technique (PERT)

and its applications in Project Management

Submitted By-

Clayburn Calvert(26)

Shruti Mishra(27)

Amrit Mohanty(28)

Amit Raj(29)

Ravi Sunkara(30)

Submitted to:

Dr. Subhajit Bhattacharya

Objective of the presentation

• To understand the formula, the application and the benefits

of Program, Evaluation, and Review Technique (PERT)

analysis in Project Management.

Program (Project) Evaluation and Review Technique (PERT): is a

project management tool used to schedule, organize, and coordinate

tasks within a project. It is basically a method to analyse the tasks

involved in completing a given project, especially the time needed

to complete each task, and to identify the minimum time needed to

complete the total project.

What is PERT ?

Uses Of PERT in our daily lives

• PERT is used when activity times are uncertain.

• In many instances , managers have attempted to apply PERT

principles to other types of projects including:

Hospital planning for such issues as costs and social security.

Educational planning and development.

Various Accounting Functions.

Real Estate Development.

PERT and Computer Project-Scheduling Software.

Uses Of PERT in our daily lives

Examples when PERT technique is used-

• A company decides to increase its production capacity by building a new

production unit . The project consists of separate tasks, some of which cannot

be started before others are completed. Thus PERT helps in listing the

activities along with the time expected for each activity.

• A company decides to launch a new product in the market. It requires several

steps. Some of these steps cannot begin until the others are completed. Thus

PERT helps in estimation of completion time and how much delay is possible

in the project completion.

PERT is applied to:

• Very large-scale

• One time

• Complex

• Non-routine infrastructure

• Research and Development Projects

Determine the duration of the project

• OPTIMISTIC TIME: Best time if everything goes perfectly

• REALISTIC TIME: Most likely time

• PESSIMISTIC TIME: A worst-case situation

B + 4M + PExpected Time = -------------------

6

Three time estimates are required to compute the parameters of an

activity’s duration distribution:

Example:

Expected time for Excavation activity if B=12, M=18, P=60,

12 + 4(18) + 60Expected Time = -------------------------

6= 24 days

Determine the critical path

The critical path is•Determined by adding the times for the activities in each sequence.

•Determining the longest path in the project.

The critical path determines the total calendar time required for the project. If

activities outside the critical path speed up or slow down (within limits), the

total project time does not change.

The amount of time that a non–critical path activity can be delayed without the

project is referred to as a slack time.

Project Crashing

Critical Path is helpful to determineES – Earliest Start time

EF - Earliest Finish time

LS – Latest Start time

LF - Latest Finish time

The project can be accelerated by adding the resources required to decrease the

time for the activities in the critical path.

Shortening of the project sometimes is referred to as Project Crashing.

•Make adjustments in the PERT chart as the project progresses.

•As the project unfolds, the estimated times can be replaced

with actual times.

In cases whereThere are delays,

Additional resources may be needed to stay on schedule

The PERT chart may be modified to reflect the new situation.

Activity time

Crashing activity

Crash time

Crash cost

Normal Activity

Normal time

Normal cost

Slope = crash cost per unit time

Activity Crashing and Time-Cost Relationship

Time-Cost Relationship Crashing costs increase as project duration decreases

Indirect costs increase as project duration increases

Reduce project length as long as crashing costs are less than indirect costs

Time-Cost Tradeoff

time

Direct cost

Indirect cost

Total project costMin total cost = optimal project time

Activity Crashing and Time-Cost Relationship

CASE STUDY

Analysis and Implementation of PERT in the Building of an

Aircraft

CASE STUDY

CONCLUSION

Organizations and the world in which they operate continue to

become more complex. Huge numbers of choices and relentless

time pressures and margin pressures make the decisions you face

more daunting and more difficult. Meanwhile, new enterprise

applications and software are generating massive amounts of data –

and it can seem like an overwhelming task to turn that data into

insight and answers.

But all that data and the availability of more and cheaper computing

power are creating an important opportunity for decision makers.

•O.R. is ideally designed to help you take advantage of. PERT.

•Professionals thrive on challenges that involve large numbers of

variables, complex systems, and significant risks.

As a result, PERT can help today’s executives with many of the

specific challenges.