Program Evaluation and Review Technique (PERT) is a method used to examine the tasks in a schedule and determine a Critical Path Method variation (CPM). It analyzes the time required to complete each task and its associated dependencies to determine the minimum time to complete a project. It estimates the shortest possible time each activity will take, the most likely length of time, and the longest time that might be taken if the activity takes longer than expected. The US Navy developed the method in 1957 on the Polaris nuclear submarine project to evaluate the resources and time required to manage a project.
Purpose of PERT Analysis
PERT Analysis informs Program Managers and project personnel on the project’s tasks and the estimated amount of time required to complete each task. By utilizing this information a Program Manager will be able to estimate the minimum amount of time required to complete the entire project. This helps in the creation of more realistic schedules and cost estimates.
How to Conduct a PERT Analysis
There are two main steps when determining the PERT Estimate. These two steps are:
- Step 1: Determine optimistic, pessimistic, and most likely estimates
- Step 2: Calculate PERT Estimate using the PERT Formula
Step 1: Determine optimistic, pessimistic, and most likely estimates
To conduct PERT Analysis, three-time estimates are obtained (optimistic, pessimistic, and most likely) for every activity along the Critical Path.
- Optimistic Time (O): the minimum possible time required to accomplish a task, assuming everything proceeds better than is normally expected.
- Pessimistic Time (P): the maximum possible time required to accomplish a task, assuming everything goes wrong (excluding major catastrophes).
- Most likely Time (M): the best estimate of the time required to accomplish a task, assuming everything proceeds as normal.
Step 2: Calculate PERT Estimate
After completing Step 1, use the (optimistic, pessimistic, and most likely) estimates in the formula below to calculate the PERT estimate for the project.
Formula: (P+4M+O)/6
Example: (8 + 4(14)+20)/6 = 14 Weeks
Critical Path
Definition Critical Path: The longest path of scheduled activities that must be met to execute a project.
See: Critical Path Method
Understanding the PERT Chart
The analysis is represented by a PERT Chart or what is also called a Critical Path Nodal Diagram. The chart uses circles, and/or rectangles to represent nodes (Events or Milestones in the schedule). These nodes are linked together by lines/vectors in between the key project tasks. These tasks must be performed in a specific order and are dependent on the task before them. The duration of the task is shown in the middle of the node. An example of a PERT Chart can be seen above.
Advantages and Disadvantages of PERT Analysis
Understanding the advantages and disadvantages of utilizing PERT analysis will give program managers and project personnel a better understanding of the realities of their schedules. It takes an experienced program manager to truly utilize the benefits a PERT analysis can provide a project team.
- Advantages: Provides Program Managers information to evaluate time and resources on a project. It helps give them the necessary information to make informed decisions and set realistic schedules.
- Disadvantages: The analysis can be highly subjective and influenced by a few outspoken team members. It also required a lot of time to continually update the analysis as a program progresses. The charts might not convey the financial picture of a project.
Critical Path Method (CPM) and Program Evaluation and Review Technique (PERT)
Although the Critical Path Method (CPM) and PERT are conceptually similar, some significant differences exist mostly due to the type of projects best suited for each technique. PERT is better to use when there is much uncertainty and when control over time outweighs control over costs. PERT handles the uncertainty of the time required to complete an activity by developing three estimates and then computing an expected time using the beta distribution. CPM is better suited for well-defined projects and activities with little uncertainty, where accurate time and resource estimates can be made. The percentage of completion of the activity can be determined. [1]
History of PERT
In 1958, the U.S. Navy introduced network scheduling techniques by developing PERT as a management control system for the development of the Polaris missile program. PERT’s focus was to give managers the means to plan and control processes and activities so the project could be completed within the specified time period. The Polaris program involved 250 prime contractors, more than 9,000 subcontractors, and hundreds of thousands of tasks. [1]
PERT was introduced as an event-oriented, probabilistic technique to increase the Program Manager’s control in projects where time was the critical factor and time estimates were difficult to make with confidence. The events used in this technique represent the start and finish of the activities. PERT uses three-time estimates for each activity: optimistic, pessimistic, and most likely. An expected time is calculated based on a beta probability distribution for each activity from these estimates. [1]
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On the other hand, the Critical Path Method or CPM is apt for the projects which are recurring in nature.
The two scheduling methods use a common approach for designing the network and for ascertaining its critical path. They are used in the successful completion of a project and hence used in conjunction with each other. Nevertheless, the truth is that CPM is different from PERT in a way that the latter concentrates on time while the former stresses on the time-cost trade-off. In the same manner, there are many differences between PERT and CPM, which we are going to discuss in this article.
Content: PERT Vs CPM
- Comparison Chart
- Definition
- Key Differences
- Video
- Conclusion
Comparison Chart
| Meaning | PERT is a project management technique, used to manage uncertain activities of a project. | CPM is a statistical technique of project management that manages well defined activities of a project. |
| What is it? | A technique of planning and control of time. | A method to control cost and time. |
| Orientation | Event-oriented | Activity-oriented |
| Evolution | Evolved as Research & Development project | Evolved as Construction project |
| Model | Probabilistic Model | Deterministic Model |
| Focuses on | Time | Time-cost trade-off |
| Estimates | Three time estimates | One time estimate |
| Appropriate for | High precision time estimate | Reasonable time estimate |
| Management of | Unpredictable Activities | Predictable activities |
| Nature of jobs | Non-repetitive nature | Repetitive nature |
| Critical and Non-critical activities | No differentiation | Differentiated |
| Suitable for | Research and Development Project | Non-research projects like civil construction, ship building etc. |
| Crashing concept | Not Applicable | Applicable |
Definition of PERT
PERT is an acronym for Program (Project) Evaluation and Review Technique, in which planning, scheduling, organizing, coordinating and controlling uncertain activities take place. The technique studies and represents the tasks undertaken to complete a project, to identify the least time for completing a task and the minimum time required to complete the whole project. It was developed in the late 1950s. It is aimed to reduce the time and cost of the project.
PERT uses time as a variable which represents the planned resource application along with performance specification. In this technique, first of all, the project is divided into activities and events. After that proper sequence is ascertained, and a network is constructed. After that time needed in each activity is calculated and the critical path (longest path connecting all the events) is determined.
Definition of CPM
Developed in the late 1950s, Critical Path Method or CPM is an algorithm used for planning, scheduling, coordination and control of activities in a project. Here, it is assumed that the activity duration is fixed and certain. CPM is used to compute the earliest and latest possible start time for each activity.
The process differentiates the critical and non-critical activities to reduce the time and avoid the queue generation in the process. The reason for the identification of critical activities is that, if any activity is delayed, it will cause the whole process to suffer. That is why it is named as Critical Path Method.
In this method, first of all, a list is prepared consisting of all the activities needed to complete a project, followed by the computation of time required to complete each activity. After that, the dependency between the activities is determined. Here, ‘path’ is defined as a sequence of activities in a network. The critical path is the path with the highest length.
The most important differences between PERT and CPM are provided below:
- PERT is a project management technique, whereby planning, scheduling, organising, coordinating and controlling uncertain activities are done. CPM is a statistical technique of project management in which planning, scheduling, organising, coordination and control of well-defined activities take place.
- PERT is a technique of planning and control of time. Unlike CPM, which is a method to control costs and time.
- While PERT is evolved as a research and development project, CPM evolved as a construction project.
- PERT is set according to events while CPM is aligned towards activities.
- A deterministic model is used in CPM. Conversely, PERT uses a probabilistic model.
- There are three times estimates in PERT, i.e. optimistic time (to), most likely time ™, pessimistic time (tp). On the other hand, there is only one estimate in CPM.
- PERT technique is best suited for a high precision time estimate, whereas CPM is appropriate for a reasonable time estimate.
- PERT deals with unpredictable activities, but CPM deals with predictable activities.
- PERT is used where the nature of the job is non-repetitive. In contrast to, CPM involves the job of repetitive nature.
- There is a demarcation between critical and non-critical activities in CPM, which is not in the case of PERT.
- PERT is best for research and development projects, but CPM is for non-research projects like construction projects.
- Crashing is a compression technique applied to CPM, to shorten the project duration, along with the least additional cost. The crashing concept is not applicable to PERT.
Video: PERT Vs CPM
Conclusion
The difference between these two project management tools is getting blurred as the techniques are merged with the passage of time. That is why, in most projects, they are being used as a single project. The primary point that distinguishes PERT from CPM is that the former gives the extreme importance of time, i.e. if the time is minimized, consequently the cost will also be reduced. However, cost optimization is the basic element, in the latter.