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Home » Program Evaluation & Review

Technique – PERT Analysis

Program Evaluation
& Review
Technique – PERT
Analysis
December 8, 2016 by Umar Farooq

Program evaluation & review technique (PERT)

was first build in 1958 and 1959 to fulfill the
needs of the era of increased engineering
where the techniques of Gantt and Taylor was
not applicable. Program evaluation & review
technique was introduced by US navy in
1958 on its Polaris Weapon System. The
Booz, Allen and Hamilton are the
management consulting firm that assists in the
development of this useful program evaluation
& review technique. At that time PERT was
rapidly becoming famous in almost all the
industries but at the at same moment, DuPont
Company started a new project of similar
technique called Critical Path Method (CPM)
which also becomes famous in mostly process
and construction industries.

Following are the basic requirements of the

PERT/Time developed in the early 1960’s by
the Navy.

A given program that consists of set of all

the tasks should be seen in a manner that
should be visual enough to be separate
down into network that must include
activities and events; this means that
following of the work break down
structure.
Under highly logical set of ground of
rules, these events and activities must be
sequenced on the network which permits
the pointing out of significant critical and
sub critical paths. Up to one hundred or
more events are covered in the network
but their number does not below than ten
or twenty.
On a three way basis, for each activity of
the network, time estimates must be
made. Elapsed-time figures are estimated
by the persons most familiar with the
activity involved in the form of optimistic,
most likely and pessimistic.
Slack times and critical path are
evaluated. The critical path is that manner
of events and activities whose
achievement will need highest expected
time.

Advantages of Program
Evaluation & Review
Technique
Following are the advantages of Program
evaluation & review technique.

The type of planning needed to an

important network is the first important
advantage of Program Evaluation &
Review Technique. Inter-dependencies
and problem areas are revealed through
network development & critical path
analysis. These problematic areas are
neither well defined nor obvious by other
methods of planning. The greatest effort
that should be made to keep on the
schedule is determine by this technique.
The probability of satisfying certain
deadlines by building of alternative plans
can be ascertained by using program
evaluation & review technique. The
standard deviations and the probability of
accomplishment data can be examined
by a decision maker if he is statistically
sophisticated. One can utilize single-time
approach, if minimum uncertainty exists
there while keeping the advantage of
network analysis.
The capacity to calculate the effect of the
alteration in the program is the third most
important advantage. For example, the
effect of contemplated shift of resources
can be evaluated from the PERT from the
less critical tasks to the tasks specified as
bottlenecks. Other performance trade-offs
and resources can also be ascertained.
The impact of deviation in the actual time
required for an activity from what has
been anticipated can also be evaluated
by the PERT.
A large portion of sophisticated data can
be shown in a suitable diagram from
which joint decisions can be made by
both customer and contractor.

Disadvantages of PERT
Unfortunately there are certain disadvantages
with the Program Evaluation & Review
Technique. There arise implementation
problems with the complexity of PERT. PERT
organized MCCS Reporting System than for
many others when there contains much data
requirements for PERT. Therefore program
evaluation & review technique becomes an
element which is regarded as expensive one to
keep and used mostly on complex large
projects.

On small projects in recent years many

companies have keep a deep look at the
usefulness of the PERT. Other than large and
complex programs, there are many diversified
approaches towards applying PERT. Following
job can be done by applying the PERT/LOB
procedures properly

Expedite and coordinate planning

Reduce time scales and cut project costs
Eliminate idle time
Build improved troubleshooting
procedures
Offer improved scheduling and control of
subcontractor tasks
The ordinary time is cut but more time is
permitted for decision making

Still with these advantages many companies try

to figure out for the usage of PERT as
beneficial for them. Even if canned software
packages are provided, still incorporation of
PERT is not easy. In the 1960’s, one of the
largest issues with the incorporating PERT
happen when request is made by the
Department of Defense regarding its
customers adopting PERT/cost for relating
schedules and costs. Numerous cost
accounting problems were overcome by the
contractor as a result of considerable cost and
effort made. Two sets of books were eventually
contacted by the contractors; one set was build
for customer reporting while one set was for
program control. Management should conduct
a trade-off study before accepting a PERT
system in order to ascertain if the results are
worth the cost.

Criticisms of Program
Evaluation & Review
Technique
Following are some of the criticisms related
with the usage of Program Evaluation &
Review Technique by the most of people.

The decision making ability of the upper

level management is reduced
Labor and time intensive effort is needed
There occurs unavailability of the
historical data for time cost estimates
There occurs unavailability of the
functional ownership in estimates
The requirement for too much detail is
required may exist
It is inappropriate for the assumption of
unlimited resources

Network Fundamental &

Terminologies

The inability to represent inter-dependencies

between activities and events is important to
figure out the significant discrepancy with Gant,
Milestone and bubble chart. In order to cover
these discrepancies, a master plan should be
build up that gives an up to date picture of
functions at all times and is simply to
understand by everyone.

Through construction of networks, the inter-

dependencies are shown. Value able
information for planning, time studies,
integration of plans scheduling and resource
management can be provided by network
analysis. To eliminate the need for crisis
management is the primary purpose of network
planning by giving the pictorial representation
of the entire program.

From such representation, following type of

management information can be acquired.

Project completion time

Impact of late starts
Interdependencies of activities
Impact of early starts
Trade-offs between time and resources
Cost of a crash program
“What if” exercise
Evaluation of performance
Slippages in performance/planning

It is clear that events and activities composed

networks. For a group of activities the starting
& ending point is considered as an event.
Similarly work needed to complete from one
point in time or event to another is said to be an
activity. For PERT networks, following figure
shows the standard nomenclature.

Arrows represents activities while circles

represent events. Specific events or
accomplishments are signified by the numbers
in the circles. The time needed is specified by
the number over the arrow (hours, days,
months). No specific numbers should be given
to the events. However event 6 should be
taken place before event 3 is accomplished.

As shown in the above figure prior to event 7,

18 and 31, event 26 must take place. Similarly
on the other hand events 7, 18 and 31 should
be completed before event 26. It is quite
resembles to “and gates” employed in the logic
diagrams.

However, PERT networks can be developed

from these charts as shown in the following
diagram.

In fact program evaluation & review technique

is control tool related to management planning.
It is said to be a road map for certain project or
program in which all of the important events or
factors are fully recognized along with their
interdependencies. From back to front, PERT
charts are often constructed because the
contractor keeps the front end flexibility as the
end date is predetermined.

It is significant to remember that one of

objectives of building PERT chart is to
ascertain how much time is required to finish
the project. Factors that directly affect the
success of the project like time, cost and
performance are analyzed by the program
evaluation & review technique by using time as
a common denominator. Two inputs are
required for the construction of the network.
The first input should be the selection made
indicating the events showing the completion or
start of an activity. Generally preference is
made for the event completions.

The sequence of events is ascertain as the

next step as shown in the above table. Every
event is related to its immediate predecessor.
Once the following questions are answered,
large projects may be easily converted into
PERT network.

Which job quickly precedes this job?

Which job quickly follows this job?
Which job can be operated concurrently?

Following Figure represents a common

program evaluation & review technique

Critical path is represented by the bold lines,

which is developed by the longest time period
through the total system of time period. The
critical path is made of events 1, 2, 3, 4, 5, 6, 7,
8, 9. Following two things are cleared for the
management regarding the vitality of the critical
path for successful control of the project.

Because in any of the events on the path

there is no slack time, particular alteration
will cause a corresponding alteration in
the end date of the program unless this
alteration may be regained during any of
the downstream events.
The events on the critical path are
important for the success of the project
therefore deep look must be taken by the
management at these events so that total
program can be improved.

Related Posts:
Slack Time Formula / Slack Time in
Project Management
10 Must Have Project Management Skills
The Economic Security of Online
Companies
How to Create a Work Breakdown
Structure | Levels…
Steps to Project Scope Management
Process
14 – Wonderful Wealth Building
Strategies

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Filed Under: Finance, Project Management

Tagged With: Advantages of Program Evaluation &
Review Technique, Disadvantages of PERT

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