Welcome to Heartiest Students

By

Meseret G [Lecturer]

Construction Planning and Management [CENG 5002]

Department of Civil Engineering

School of Engineering

Adama Science and Technology University

Semester I

2013/14 6/5/2014
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Lecture
On
Stochastic Project Scheduling [PERT]

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Introduction

In some situations, estimating activity duration becomes a

difficult task due to ambiguity inherited in and the risks
associated with some work.

Thus, the duration of an activity is estimated as a range

of time values rather than being a single value.

This section deals with the scheduling of the project under

uncertain activity duration. 6/5/2014
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Scheduling with Uncertain Durations

Using the probabilistic distribution of activity durations.

Duration of a particular activity is assumed to be a random

variable that is distributed in a particular fashion.

An activity duration might be assumed to be distributed as a

normal or a beta distributed random variable as shown in
figure below.

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Figure shows the probability or chance of experiencing a

particular activity duration based on a probabilistic
distribution.

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The beta distribution is often used to characterize

activity durations, since it can have an absolute minimum and
an absolute maximum of possible duration times.

The normal distribution is a good approximation to the beta

distribution in the center of the distribution and is easy to
work with, so it is often used as an approximation.

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The most common formal approach to incorporate uncertainty in

the scheduling process is to apply the critical path scheduling
process and then analyze the results from a probabilistic
perspective.
This process is usually referred to as the Program
Evaluation and Review Technique [PERT] method.
The critical path [determined] is then used to analyze the
duration of the project incorporating the uncertainty of the
activity durations along the critical path.
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The expected project duration is equal to the sum of the

expected durations of the activities along the critical
path.

Assuming that activity durations are independent random

variables, the variance or variation in the duration of
this critical path is calculated as the sum of the
variances along the critical path.

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With the mean and variance of the identified critical path

known, the distribution of activity durations can also be
computed.

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Program Evaluation and Review Technique

PERT introduces uncertainty into the estimates for activity

and project durations.

PERT is well suited for those situations where there is either

insufficient background information to specify accurately time
and cost or where project activities require research and
development.

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AON diagramming can be easily used alternatively AOA

[original development approach].

The method is based on the well-known “central limit

theorem”.

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The theorem states that:

… “Where a series of sequential independent activities lie on

the critical path of a network, the sum of the individual
activity durations will be distributed in approximately normal
fashion, regardless of the distribution of the individual
activities themselves….

… The mean of the distribution of the sum of the activity

durations will be the sum of the means of the individual activities
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and its variance will be the sum of the activities’ variances”.
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Primary assumptions of PERT can be summarized as follows:

Any PERT path must have enough activities to make central

limit theorem valid.

The mean of the distribution of the path with the greatest

duration, from the initial node to a given node, is given by
the maximum mean of the duration distribution of the paths
entering the node.

PERT critical path is longer enough than any other path in the
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network.
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Six Steps PERT & CPM

1. Define the project and prepare the work breakdown

structure

2. Develop relationships among the activities - decide which

activities must precede and which must follow others

3. Draw the network connecting all of the activities

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Step Cont’d

4. Assign time and/or cost estimates to each activity

5. Compute the longest time path through the network – this is

called the critical path

6. Use the network to help plan, schedule, monitor, and control

the project

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Questions PERT & CPM Can Answer

1. When will the entire project be completed?

2. What are the critical activities or tasks in the project?

3. Which are the noncritical activities?

4. What is the probability the project will be completed by a

specific date?

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5. Is the project on schedule, behind schedule, or ahead of

schedule?

6. Is the money spent equal to, less than, or greater than the
budget?

7. Are there enough resources available to finish the project on

time?

8. If the project must be finished in a shorter time, what is the

way to accomplish this at least cost?
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Variability in Activity Times

CPM assumes we know a fixed time estimate for each
activity and there is no variability in activity times

PERT uses a probability distribution for activity times to allow

for variability

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Variability in Activity Times: Three time estimates are

required
Optimistic time (a): Estimate of the minimum time
required for an activity if exceptionally good luck is
experienced. If everything goes according to plan.

Most–likely or modal time (m) [Most

realistic/probable estimate]: Time required if the
activity is repeated a number of times under
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Pessimistic time (b) [Assuming very

unfavorable conditions]: Estimate of the maximum time
required if unusually bad luck is experienced.

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These three time estimates become the framework on which

the probability distribution curve for the activity is
erected.

Many authors argue that beta distribution is mostly fit

construction activities.

The three times are thought to be easier for managers to

estimate subjectively.

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Using the three times estimates, the expected mean time (te)
is derived using equation below.

Then, te is used as the best available time approximation

for the activity in question.

The standard deviation (σ) is given by equation below,

The variance (ν) can be determined as ν = σ2.

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Estimate follows beta distribution

Expected time:
t = (a + 4m + b)/6
Variance of times:
v = [(b – a)/6]2

Standard Deviation

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By adopting activity expected mean time, the critical path

calculations proceed as CPM.

Associated with each duration in PERT, however, is its

standard deviation or its variance.

The project duration is determined by summing up the activity

expected mean time along the critical path and thus will
be an expected mean duration.

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Since the activities on the critical path are independent of

each other, central limit theory gives the variance of the
project duration as the sum of the individual variances
of these critical path activities.

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Once the expected mean time for project duration (TX)

and its standard deviation (σX) are determined, it is
possible to calculate the chance of meeting specific project
duration (TS).

Then normal probability tables are used to determine

such chance using Equation below.

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The procedure for hand probability computations using PERT

can be summarized in the following steps:

1. Make the usual forward and backward pass

computations based on a single estimate (mean) for each
activity.

2. Obtain estimates for a, m, and b for only critical activities. If

necessary, adjust the length of the critical path as dictated by
the new te values based on a, m, and b.
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3. Compute the variance for event x (νX) by summing the

variances for the critical activities leading to event x.

4. Compute Z and find the corresponding normal probability.

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Estimate follows beta distribution

Expected time:
t = (a + 4m + b)/6
Variance
Probabilityofoftimes:
Probability

1 in 100 of Probability of
< a occurring v = [(b − a)/6]2 1 in 100 of >
b occurring

Activity
Time

Optimistic Most Likely Pessimistic Time

Time (a) Time (m) (b)
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Computing Variance
Most Expected
Optimistic Likely Pessimistic Time Variance
Activity a m b t = (a + 4m + b)/6 [(b – a)/6]2

A 1 2 3 2 .11
B 2 3 4 3 .11
C 1 2 3 2 .11
D 2 4 6 4 .44
E 1 4 7 4 1.00
F 1 2 9 3 1.78
G 3 4 11 5 1.78
H 1 2 3 2 .11

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Probability of Project Completion

Project variance is computed by summing the variances of

critical activities
s2p = Project variance
= (variances of activities
on critical path)

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Project variance
s2p = .11 + .11 + 1.00 + 1.78 + .11 = 3.11

Project standard deviation

sp = Project variance
= 3.11 = 1.76 weeks

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Standard deviation = 1.76 weeks

15 Weeks
(Expected Completion Time)
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What is the probability this project can be completed on or

before the 16 week deadline?

Z = due – expected date /sp

date of completion
= (16 wks – 15 wks)/1.76

= 0.57
Where Z is the number of
standard deviations the due date
lies from the mean
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From Appendix I
.00 .01 .07 .08
.1 .50000 .50399 .52790 .53188
.2 .53983 .54380 .56749 .57142

.5 Z =
due
.69146 −
expected date
.69497 .71566 /s
.71904
date of completion p
.6 .72575 .72907 .74857 .75175
= (16 wks − 15 wks)/1.76

= 0.57 Where Z is the number of standard

deviations the due date lies from the
mean
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0.57 Standard deviations

Probability
(T ≤ 16 weeks)
is 71.57%

15 16 Time
Weeks Weeks
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Determining Project Completion Time

Probability of
0.99

Probability of
0.01

2.33 Standard Z
From Appendix I deviations
0 2.33
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End of Lecture

Thank You!!!

Next: Project Time-Cost Trade-Off

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