Project Management Tools

Program Evaluation and Review Technique(PERT)

PERT deals with the problem of uncertainty in the activity time. It helps to co-
ordinate the activities successfully to accomplish the objectives of a project on time.
It acts as a effective tool for decision making In pert the activity time usually
expressed in calendar weeks.

Advantages

• This technique helps the management to plan the best possible use resouces
to a given goal within the time and cost limitations.
• It helps management to handle the uncertainties involved in the program.
• It process for the right action point and at right time in the organization.
• It provides information on existence of slack period between activies and
what avtivities are crucial in terms of time to complete project.
• It gives a basis of obtaining the necessary facts for decision-making.
• PERT allows a large amount of data to be presented in a well-organized
diagram known as network from which both the executor and customer can
make joint decisions.

Limitations

• The basic difficulty comes in the way of time estimate for the completion of
activities because activites are non-repetitive type.
• The technique does not consider resources required at various stages of the
project.
• Use of this technique for active control of a project requires frequent updating
a revising the PERT calculations and this provesquite a costly affair.

When PERT applied properly it helps to do the following jobs effectively.

• Cut project cost and reduce time.

• Coordinate and expedite planning.
• Eliminate slack(idle) time.
• Cut time required for routine decisions,but allow more time for critical
decision-makings.

Network fundamentals:

Networks are composed of events and activities as defined below:

Event:

An event is defined as the starting or ending point of an activity or a group of

activites. It represents a milestone and does not consume time or resources. Event is
described by a circle (o).

Activity:

Activity is the work required to proceed from one event to another It consumes
therefore time and resources. It is represented by an arrow(->)

• To draw network diagram an interdependencies between events and activites

must be identified so that master plan can be developed which illustrate the
up-to-date picture of operations during the project.
• Network analysis provides valuable information for planning, integration of
plans, time scheduling , and resource management.
• The primary purpose of network is to eliminate crisis management by
providing a pictorial representation of the total program from which the time
estimates such as Early starting time(EST) and Late starting time(LST) and
their impact can be made.

Network Rules:

• Each activity must have a preceding and a succeeding event

• Each Event should have a distinct(unique) number.

• There should not be loop in the project network as shown below:

• Note More than one activity can have the same preceding and succeeding
event

• Any number of activities may merge with an event.

Network Development

1. Enmurate all those activities in the Project which needs close monitoring to
complete them in time.
2. Define each activity as
Preceding activity(the activity which preceed it).
Succeding activity(the activity which followed).
Concurrent activity(the activity that can be done concurrently)
3. Estimation of time for the completion of each activity.

The estimation of time for the completion of each activity is important in the
network analysis. This can be done using three possible assumptions.

I. Optimistic time(a):
This time assumes that every thing will go accordingly to with minimum a
mount ofdifficulties and such situation may occur approximately 1 percent of
time.

II. Most pessimistic time(b):

This time assumes that every thing will not go according to plan and that
the maximum potential difficulties will develop and may occur approximately
one percent of time .

III. Most likely or normal time(m):

This is the time that would most often occur should this effort be reported
over over again.
The estimated time of the completion of an activity is given by:

te= (a+4m+b)/6
Where
te = estimated time
a = most optimistic time
m = normal time
b = most pessimistic time

Standard Devation

Standard devation of the estimated time(te):

sd (te) = (b-a)/6

The time estimates(weeks) for various activities in a

dummy project is illustrated below:
Name of activity symbol a m b te sd

Literature collection A 9 12 21 13 2

Field Preparation B 6 12 18 12 2

Sowing C 2 4 6 2 0.67

Cultural Operation D 4 8.5 10 8 1

Harvesting E 6 8 10 15 0.67

Data Analysis F 1 2 3 2 0.33

Draw the flow-chart and network for the above table

Activity Table

Name of activity Symbol Preceding activity Te(weeks)

Literature collection A -- 13

Field Preparation B -- 12

Sowing C A 2

Cultural Operation D B,C 8

Harvesting E A 15

Data Analysis F D 2

Flow Chart

Network
Earliest Starting Time(EST)

EST is the time at which activity can not be started earlier than this time that means
it is an waiting time to start next activity.
In the above network,event 4 occurs when activites A(1-2),B(1-3),C(2-4) and D(3-4)
are completed. In other words event 4 occurs when paths (1-2-3-4) and (1-3-4) are
completed and the requirement time for the two paths are 23 and 20 weeks
respectively. In the above network 1-3-4 is the path with longest time (23
weeks).Therefore this is the EST for the activity F,it mean to start activity F one has
to expect to wait 23 weeks.

Latest Starting Time(LST)

LST is the time, at which the starting of an activity can not be delayed beyond this
time. In other words it includes non-waiting time. As further delay beyond this time
will adverse affect the project duration. The LST for an event is obtainedby making
EST and LST is equal for the end event and calculated by working backward. The
path with shortest time among the path is considered for LST. In this example the
LST of an event 2 is 13 since among the two paths 2-5 and 2-4-5, the path2-5 is the
shortest.
In general the WST of an event is indicated in the left half of the circle and LST is
indicated in the right half of the circle as shown below.

Slack Time:

Slack Time in a network is defined as the difference between Latest Starting

Time(LST) and Earliest Starting Time(EST) of an event.

Slack Time=LST-EST

Slack Time(week) in the above network for the events 2,3,and 4 are given below:

Events LST EST Slack(LST-EST)

4 26 23 3
3 18 15 3
2 13 13 0
The above figure indicated the activity E should be starting immediately after
completion of Event 2.Where as even if activity D and F are little delay in their start,
may notadversely effect the project duration much. If their is any shortfall or crunch
in resources,the priority should be given to activity A and followed by D and F.

Critical Path:

The critical path is one having longest-time span through the total system of events.
For example in the above network the possible paths and total time of each path are:

Path Total time

1-2-5 : 28

1-2-3-4-5 : 25

1-3-4-5 : 22

The Critical path in the above network composed of events 1-2-5, being longest
time-span among the three paths. The critical path is vital for successful control of
the project because it provides information to the management on two things:

1. Because there is no slack time in any of the events on the path, any delay will
cause a corresponding delay in the end-date of the program, unless the delay can
recovered during any of the downstream events on the critical path.

2. Because of the event on this path are the most critical for the success of the
project management must take a hardlook at this events, in order to improve the
total program. Also if we want to reduce the total duration of a project we should be
able to reduce the time taken by activity on the critical path.

Calculation of Probability of a Project

Assuming that the probability distribution of activities on the critical path are
independent, the variance of the critical path duration is obtained by adding
variances of activities on the critical path (C.P.) in the above network. A and E are
the activities on the critical path.

The variance of the activities on C.P. = Var(A)+ Var(E)

and Sd(CP) = SQRT[(Var(A)+Var(e)]

With the information on mean (m) and s.d (s) for critical path duration, which is
assumed as normally distributed, we can compute the probability of completion of a
project by a specific date (d) from the following steps

Step1:
Find Z = (d-m)/sd Where Z is known as standard normal
variate with mean and variance
Step2:
Obtain cumulative probability upto z from the table
"area under normal curve"
As an illustration consider a dummy network with mean(m) and s.d(s) of a critical
path 28 weeks and 3.0 weeks respectively. Then the Probability of completion of a
project by certain specified dates are given by:

Probabilityof
Specified completion of project
Z-value
period(d) (weeks) by a specified
period(d)
20 (20-28)/3=-2.67 0.005
25 (25-28)/3=-1.0 0.159
30 (30-28)/3=0.67 0.73

It is seen from the above table that the project can be completed within 30 weeks
with high probability (0.73).On the other hand it is impossible to complete it within
20 weeks as indicated by the probability(0.005).

Example

A farm manager has undertaken a project on to develop a farm in a regional station.

The activites identified in the project, their interrelationships and the time
distribution of each activity is shown in following activity table.

Name of the Preceding Time

S.No Symbol
activity activity Distribution(weeks)
a m b
1. Land Surveying A - 6 8 11
2. Plan preparartion B A 4 7 10
3. Rock blasting C B 15 20 24
4. Land leveling D C 5 9 12
Drainage channel
5. E D 4 6 10
digging
Stone pitching of
6. F E 12 16 22
drainage channel
7. Digging of wells G B 15 20 30
Laying of
8. H G 10 12 18
irrigation lines
Construction of
9. I G 8 14 21
pump house
Procurement of
10. J G 4 6 8
pumps
Installation of
11. K I,J 5 7 12
pumps
12. Finishing works L F,H,K 4 6 10

For the above project calculate Expected time(te) and s.d(te) and draw the flow
chart, network and find the critical path. Also calculate the expected time,slacks for
each event and the probability of completion of the project for different periods
60,65,70,75,80,85 ways.

Activity Sd(te)=(b-
Symbol Te=(a+4m+b)/6
number a)/6
1 A 8 0.83
2 B 7 1.00
3 C 20 1.50
4 D 9 1.20
5 E 6 1.00
6 F 17 1.70
7 G 21 2.50
8 H 13 1.33
9 I 14 2.16
10 J 6 0.67
11 K 8 1.16
12 L 6 1.00
Critical path 0-1-2-3-4-5-9-10
Critical path duration = 73 weeks
Mean duration of C.P: 73 weeks
Sd(c.p) = 3.4 weeks
Now let us find out the probability for the completion of project for specific dates(d)

Probability(from the
Specified
Z value area under normal
date(weeks)(d)
curve)
60-73/3.4= -
60 0.00005
3.82
65-73/3.4=-
65 0.015
2.35
70-73/3.4=-
70 0.47
0.09
75-
75 0.61
73/3.4=0.60
80-
80 0.98
73/3.4=2.06

From the above table it is seen that the project may be completed within 60 days is
highly impossible. It may be completed within 75 weeks with probability 0.61. The
project will however be completed in 80 weeks with certainity (P=0.98).

Reference Books

Harold Kerzner Project Management-A Systems Approach to Planning,Scheduling and

Controlling (1979)

Vasant Desai. Project Management Preparation,Appraisal Finance and Policy(1997)

K.Venkateswarlu and K.V. Raman. Project Management Techniques for R&d in

Agriculture(1993)