Pert Chart

Term Definition
Pert stands for Program Evaluation and Review Technique that uses three estimates for every task in a project to compute a task duration as follows:

Task Duration = (Most Optimistic Estimate + 4 x Most Likely Estimate + Most Pessimistic Estimate ) / 6

Pert was developed in the 1950’s to try to account for errors and inaccuracies in estimates, what is also referred to as a probabilistic model because the formula above is derived from a statistical model as opposed to the deterministic model of providing a single number for an estimate. The problem with Pert is that it creates a lot of errors for project managers, here are just a few:

• Pert assumes a Beta distribution for each task estimate where as for a given project, task, this distribution may not be a good assumption at all
• It also assumes that the person who did the estimates was able to provide very reliable optimistic and pessimistic estimates that correspond to the Beta distribution’s boundary endpoints. If those estimates are not accurate the task duration calculated by the Pert formula results in a completely inaccurate value
• The errors introduced by Pert estimates may result in a compromised critical path that does not include the project’s true bottlenecks and resource constraints

So what to do?

• Using good estimates and a basic Gantt chart is sufficient and good enough for short low risk projects
• A Monte Carlo simulation is the best method of estimating project duration and costs for a longer term, more complicated and higher risk project. Monte Carlo simulation supports a variety of distribution types and the computations behind the method apply more robust probabilistic analysis to the task of project estimating

Area of Application
Project Plan

Related Terms
Critical Path
Earned Value
Gantt Chart

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