In CPM analysis, the duration of each activity is pre determined to find hence CPM is analysis is deterministic approach.
In realities there are projects whose completion time cannot be predetermined. Projects relating to medicine, defence equipment, missiles etc are the examples for the projects whose duration of completion cannot be determined. Those projects can be handled by PERT method.
In this method the duration of each activity is given in the form of estimation namely
- Optimistic time (To)
- Pessimistic time (Tp)
- Most common time (Tm)
Based on the above 3 estimations we have to calculate the expected duration of each activity using the formula
Expected duration of each activity: (To+4Tm+Tp)/6
S.D of the completion time of each activity can be determined using
The square of it is called variance
The variance in the completion time of an entire project is given by 
PERT analysis a probabilistic approach . In this analysis we've to draw NMD & expected duration (Te) is taken as duration of each activity. Based on this, we've to identify the critical path & its duration. The critical path duration tell us that the given project will be completed as per the C.P duration but the chances of completion is only 50% i.e probability that the project will be completed as per the critical path duration is 0.5.
In PERT analysis we can find out the probability of completing the project within the stipulated time limit using normal distribution.
Working steps are as follows
- Calculate the critical path duration (µ) & σ project
- Calculate the value of Z using
where x is stipulated duration using normal distribution principal, we can calculate the area of the normal curve corresponding to Z value. The calculated area represents the probability
the project completion time for different level of confidence can be determined using 95% confidence level
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