Page 165 - DEDU503_EDUCATIONAL_MANAGEMENT_ENGLISH

Unit 13: Concept of PERT and CPM

13.1 Concept of PERT Notes

Program Evaluation and Review Technique (PERT) is a scheduling method originally designed to
plan a manufacturing project by employing a network of interrelated activities, coordinating optimum
cost and time criteria. PERT emphasizes the relationship between the time each activity takes, the
costs associated with each phase, and the resulting time and cost for the anticipated completion of
the entire project.
PERT is an integrated project management system. These, systems were designed to manage the
complexities of major manufacturing projects, the extensive data necessary for such industrial efforts,
and the time deadlines created by defense industry projects. Most of these management systems
developed following World War II, and each has its advantages.

13.2 Historical Background of PERT

PERT was first developed in 1958 by the U.S. Navy Special Projects Office on the Polaris missile
system. Existing integrated planning on such a large scale was deemed inadequate, so the Navy
pulled in the Lockheed Aircraft Corporation and the management consulting firm of Booz, Allen,
and Hamilton. Traditional techniques such as line of balance, Gantt charts, and other systems were
eliminated, and PERT evolved as a means to deal with the varied time periods it takes to finish the
critical activities of an overall project.
The critical path method (CPM) evolved parallel to PERT.

13.3 Features of PERT

PERT centers on the concept of time and allows flexible scheduling due to variations in the amount
of time it takes to complete one specific part of the project. A typical PERT network consists of
activities and events. An event is the completion of one program component at a particular time. An
activity is defined as the time and resources required to move from one event to another. Therefore,
when events and activities are clearly defined, progress of a program is easily monitored, and the
path of the project proceeds toward termination. PERT mandates that each preceding event be
completed before succeeding events, and thus the final project, can be considered complete.

One key element to PERT’s application is that three estimates are required because of the element of
uncertainty and to provide time frames for the PERT network. These three estimates are classed as
optimistic, most likely, and pessimistic, and are made for each activity of the overall project. Generally,
the optimistic time estimate is the minimum time the activity will take—considering that all goes
right the first time and luck holds for the project. The reverse is the pessimistic estimate, or maximum
time estimate for completing the activity. This estimate takes into account Murphy’s law—whatever
can go wrong will—and all possible negative factors are considered when computing the estimate.
The third is the most likely estimate, or the normal or realistic time an activity requires. Two other
elements comprise the PERT network : the path, or critical path, and slack time. The critical path is
a combination of events and activities that will necessitate the greatest expected completion time.
Slack time is defined as the difference between the total expected activity time for the project and the
actual time for the entire project. Slack time is the spare time experienced in the PERT network.
A vital aspect of PERT is the formula used for the calculation of expected project time. The project
reads :
where T = expected completion time,
A = optimistic estimate,

M = most likely estimate,
B = pessimistic estimate.

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