Program Evaluation And Review Technique

Program Evaluation And Review Technique
Program Evaluation And Review Technique
In 1957, United States Navy, Booz Allen Hamilton and Lockheed Cooperation developed Program Evaluation And Review Technique (PERT) to cater for Polaris missile / submarine projects. Over the past few years, use of PERT has declined due to most computer scheduling tools making use of CPM technique. Hence, out of the two, the most widely used project schedule network analysis technique is Critical Path Method (CPM). However, PERT is an important scheduling tool that helps to understand scheduling concepts. This blog post will help to understand the basic principles of program evaluation and review technique.

What is Program Evaluation And Review Technique?

Program Evaluation And Review Technique (PERT) is a schedule development and analysis technique. It represents the logical sequence of project schedule activities with their relationship in a graphical format.

However, PERT uses Arrow Diagram Method (ADM) technique to represent the logical sequence of project schedule activities. This analysis uses Activity-on-Arrow (AOA) diagramming method to construct the project schedule network logic. Moreover, PERT uses weighted average formula to arrive at the expected time to complete the activity.

Project schedule  analysis using Program Evaluation and Review Technique reveals the following.

  1. Logical sequence of project activities
  2. Schedule network diagram
  3. List of critical activities
  4. The critical path of the network
  5. Activity slack (float)
  6. Overall project duration
  7. Probability of achieving the project completion date.

Importance of Program Evaluation And Review Technique

Program Evaluation and Review Technique (PERT) has various advantages. PERT finds its usage when there is a high degree of uncertainty. It uses three-point estimation technique to estimate the expected activity duration. This helps to calculate activity duration when there is a high degree of uncertainty. Since PERT accounts for uncertainty and risk the expected duration is more accurate than the single point estimation technique.

PERT is probabilistic in nature. It facilitates calculation of risk involved in project completion date based on beta distribution of each activity time and normal distribution of the expected time. It allows representation of large amounts of data for further analysis and modelling. Effect of changes on schedule as a result of changes in resources can be evaluated fairly easily.

Also read: Sequence Activities Tools & Techniques

Difference Between PERT and CPM

Research and Development projects especially the development side of the project uses PERT. Program Evaluation and Review Technique mainly helps to control time element of projects. Moreover, PERT uses probabilistic time estimates to aid in determining the probability of project completion date. PERT is also used for those projects where percent complete is impossible to determine except for completed milestone.  

Moreover, Critical Path Method (CPM) finds application in construction projects. Critical Path Method however uses deterministic (single point) activity time estimates. However, CPM can control both time and cost aspect of the project. Moreover, the modern-day scheduling software also provide PERT analysis of schedule developed.

Also read: Difference Between CPM and PERT

Program Evaluation and Review Technique Formula

Based On Beta Distribution Program Evaluation and Review Technique (PERT) three-point estimation technique is mathematically represented as follows. 

PERT Three Point Estimate Formula

Activity Duration Expected Time Estimates = (P + 4M + O) / 6
Standard Deviation = (P – O) / 6
Variance = (Standard Deviation)2 = (P – O)2 / 36

Where P = Pessimistic Value,  M = Most Likely Value, O = Optimistic Value

Also read: Critical Path Method Network Analysis

Pessimistic Value

The pessimistic completion time assumes that things will not go as per the plan and greatest difficulties. This estimate indicates the worst case scenario.

Optimistic Value

The optimistic completion time assumes that everything will go as per plan and with minimum difficulties. This estimate is based on best case scenario.

Most Likely

Most likely completion time represents the realistic time estimates based on the resources that are likely to be applied on the activity and other known issues and risks.

 Also Read: Project Management Formulas

PERT Chart

The pert chart is created using Activity-on-Arrow schedule network diagramming technique which is also an example of Arrow Diagramming Method (ADM). 

The Activity-on-Arrow schedule network diagram consists on arrows and circular nodes that represent events. Events indicate end state of activity and do not use resources and do not have any duration. Hence events are like milestone.

In AOA schedule network diagramming technique arrows indicate activities arrows and the direction of arrow represents the precedence relationships. PERT charts also make use of dummy activities indicated by dashed lines in the network diagram. These activities also do not have any duration and do not require any resources. However, PERT uses dummy activities to establish logical relationships between activities. 

Also read: Critical Path Analysis Solved Example

Final Thoughts

Finally, it is very interesting to note that Project Management Body of Knowledge (PMBOK) Sixth Edition has removed all references to PERT. The decision to remove PERT could be due the fact of its low usage and acceptance in the industry. Further, it can also be argued the PMBOK wants to stress upon more novel techniques like Agile. However, Program Evaluation and Review Technique will always remain an important tool to understand the intricacies of schedule development and analysis.

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