Program evaluation review technique (pert)

1. P rogram E valuation R eview T echnique ( PERT ) Prepared by : Anas Tomeh Fira Eid Prepared for : Dr. Reema Nassar Engineering Mangement

2. Objective of the presentation To understand the formula , the use and the benefits of Program , Evaluation ,and Review Technic (PERT) analysis .

3. 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 the PERT ?

4. When we use PERT ? PERT is used when activity times are uncertain. Determine the duration of the project . Decision making under risk (“ P ” for probabilistic )

5. Determine the duration of the project OPTIMISTIC TIME : B est time if everything goes perfectly REALISTIC TIME: M ost likely time P ESSIMISTIC TIME: A worst-case situation B + 4 M + P Expected Time = ------------------- 6

6. Determine the duration of the project Example: For excavation activity let : B = 12 days M = 18 days P = 60 What is the expected time for this activity? Sol : 12 + 4 (18) + 60 Expected Time = ------------------------- 6 = 24 days

7. Determine the duration of the project

8. Determine the duration of the project Start F C G E D B A Finish

9. Determine the duration of the project Start ES:0 EF:0 F D:4.5 ES:10.33 EF:14.83 C D:5.17 ES:4 EF:9.17 G D:5.17 ES:14.34 EF:19.51 E D:5.17 ES:9.17 EF:14.34 D D:6.33 ES:4 EF:10.33 B D:5.33 ES:0 EF:5.33 A D:4 ES:0 EF:4 Finish D:0 ES:19.51 EF:19.51

10. Determine the duration of the project Start D:0 ES:0 EF:0 LS:0 LF:0 F D:4.5 ES:10.33 EF:14.83 LS:15.01 LF:19.51 C D:5.17 ES:4 EF:9.17 LS:4 LF:9.17 G D:5.17 ES:14.34 EF:19.51 LS:14.34 LF:19.51 E D:5.17 ES:9.17 EF:14.34 LS:9.17 LF:14.34 D D:6.33 ES:4 EF:10.33 LS:8.68 LF:15.01 B D:5.33 ES:0 EF:5.33 LS:3.84 LF:9.17 A D:4 ES:0 EF:4 LS:0 LF:4 Finish D:0 ES:19.51 EF:19.51 LS:19.51 LF:19.51

11. Determine the duration of the project Critical Path Critical Path: A-C-E-G Path A-D-F = 14.83 work days Path A-C-E-G = 19.51 work days Path B-E-G = 15.67 work days

12. Determine the duration of the project Critical Path

13. Assessing Risks Risk is a measure of the probability (and consequences) of not completing a project on time. A major responsibility of the project manager at the start of a project is to develop a risk-management plan. A Risk-Management Plan identifies the key risks to a project’s success and prescribes ways to circumvent them.

14. With PERT’s three time-estimates, we get a mean (average) time and a variance for each activity and each path. We also get a project mean time and variance. In order to compute probabilities (assuming a normal distribution) we need the activity means and variances. Most computer packages calculate this for you. Assessing Risks

15. K 6 C 10 G 35 J 4 H 40 B 9 D 10 E 24 I 15 Finish Start A 12 F 10 0 9 9 33 9 19 19 59 22 57 12 22 59 63 12 27 12 22 63 69 0 12 48 63 53 63 59 63 24 59 19 59 35 59 14 24 9 19 2 14 0 9 Latest finish time 63 69 Latest start time Path Time (wks) A-I-K 33 33 A-F-K 28 28 A-C-G-J-K 67 B-D-H-J-K 69 B-E-J-K 43 Assessing Risks

16. What is the probability that our sample project will finish in 69 weeks as scheduled? 100% (Why?) Because we used CPM! (This means we were certain of all of our activity times.) If we weren’t certain, we should have used PERT You can’t do risk analysis if you use CPM Assessing Risks

17. Calculate standard deviation Standard deviation- average deviation from the estimated time SD=(T P -T )/6 higher the SD is the greater amount of uncertainty exists Calculate variance reflects the spread of a value over a normal distribution V=SD 2 a large variance indicates great uncertainty, a small variance indicates a more accurate estimate Assessing Risks

18.  2 =  (variances of activities along critical path) z = T – C   2  2 = 1.78 + 1.78 + 2.78 + 5.44 + 0.11 = 11.89 z = 72 – 69 11.89 What is the Probability of it taking 72 weeks? Critical Path = B - D - H - J – K = 69 weeks T = 72 weeks C = 69 weeks Look up Z value in normal distribution table P z = .8078 or 80.78% (Probability of it taking 72 weeks) Z = 0.870 Critical Path Variance Assessing Risks

19. Look up the Z value (0.870) in the table of normal distribution. .8078 or 80.78% is the probability of the project taking up to 72 wks. Going over 72 weeks would be 100 – 80.78 = 19.22% Assessing Risks

20. Project duration (weeks) 69 72 Probability of taking 72 weeks is 0.8078 or 80.78% Length of critical path is 69 weeks Normal distribution: Mean = 69 weeks;  = 3.45 weeks Probability of exceeding 72 weeks is 0.1922 or 19.22% Assessing Risks

21. Assume a PERT project critical path takes 40 days , and that the variance of this path is 2.147 You wish to know the probability of the project going over 42 days. Compute the standard deviation of the critical path. (Take the square root of the variance of 2.147) Std. Dev. = 1.465 POM/QM software gives you the variance of the critical path . Compute the Z value : Z = ( absolute time difference ) / Std. Dev. In this example, Z = ( 42 days - 40 days ) / 1.465 = 1.365 Look up the Z value of 1.365 in a Normal Distribution table to get the probability of the project taking 42 days. Subtract it from 100% to get the probability of going over 42. Assessing Risks

22. Look up the Z value (1.365) in the table of normal distribution. (In this case you need to interpolate between the Z values of .9313 and .9147) .9139 or 91.39% is the probability of the project taking up to 42 days . Going over 42 days is thus 100 - 91.39 = 8.61% Assessing Risks

23. Thank you for attention Any Questions ????