Program Evaluation & Review Technique – PERT Analysis

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.