What is PERT network analysis?

by Sree Rama Rao on September 24, 2010

PERT network analysis

A flow chart like diagram that depicts the sequence of activities needed to complete a project and the time or cost associated with each activity.

Gantt and load charts are helpful as long as the activities or projects being scheduled are few and independent of each other. But what if a manager had to plan a large project – such as a complex reorganization, the launching of a major cost reduction campaign or the development of a new product – that required coordinating inputs marketing production and product design personnel? Such projects require coordinating hundreds or thousands of activities, some of which must be done simultaneously and some of which cannot begin until earlier activities have been competed. If you are constructing a shopping mall, you obviously cannot start erecting walls until the foundation has been laid. How then can you schedule such a complex project? You should use the programs evaluation and review technique.

The program evaluation and review technique – usually just called PERT, or the PERT network analysis – was originally developed in the late 1950s for coordinating the more than 3,000 contractors and agencies working on the Polaris submarine weapon system. This project was incredibly complicated with hundreds of thousands of activities that had to be coordinated. PERT is reported to have cut two years off he completion date for the Polaris project.

A PERT network is a flow chart like diagram that depicts the sequence of activities needed to complete a project and the time or costs associated with each activity. With a PERT network, a project manager must think through what has to be done, determine which events depend on one another, and identify potential trouble spots. PERT also makes it easy to compare the effects alternative actions will have on scheduling and cists. PERT allows managers to monitor a project’s progress, identify possible bottlenecks and shift resources as necessary to keep the project on schedule.

Events

End points that represent the completion of major activities

Activities

Actions that take place

Critical path

The longest or most time consuming sequence of events and activities required to complete a project required to complete a project in the shortest amount of time.

To understand how to construct a PERT network, you need to know three terms: events, activities and critical path. Let us define these terms, outline the steps in the PERT process and then developed an example. Events are end points that represent the completion of major activities. Sometimes called milestones, events, indicate that something significant has happened (such as receipt of purchased items) or an important component is finished. In PERT events represent a point in time. Activities on the other hand are the actions that take place. Each activity consumes time, as determined on the basis of the time or resources required to progress from one event to another. The critical path is the longest or most time consuming sequence of events and activities required to complete the project in the shortest amount of time. Let’s apply PERT to a construction manager’s task of building a 6,500 square foot custom home.

As a construction manager, you recognize that time really is money in your business Delays can turn a profitable job into a money loser. Accordingly you must determine how long it will take to complete the house. You have carefully dissected the entire project into activities. Exhibit outlines the major events in the construction project and your estimate of the expected time required to complete each activity.





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