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Project Evaluation Review Technique (PERT)

A tool used to identify the time required to finish a particular task or activity

What is Project Evaluation Review Technique (PERT)?

In project management, Project Evaluation Review Technique or PERT is used to identify the time it takes to finish a particular task or activity. It is a system that helps in proper scheduling and coordination of all tasks throughout the project. It also helps in keeping track of the progress, or lack thereof, of the project. In the 1950s, Project Evaluation Review Technique was developed by the US Navy to manage the Polaris submarine missile program of their Special Projects Office.

 

PERT (Project Evaluation Review Technique)

 

Knowing the time it would take to execute a project is crucial as it helps project managers decide on other factors such as the budget and task delegation. No matter how big or small a project is, estimates can be too optimistic or pessimistic, but using a PERT chart will help determine more realistic estimates.

 

Creating a PERT Chart

A flowchart is used to depict the Project Evaluation Review Technique. Nodes represent the events, indicating the start or end of the activities. The directorial lines indicate the tasks that need to be completed, and the arrows show the sequence of the activities.

There are four definitions of time needed to finish an activity:

  • Optimistic time – The least amount of time to complete a task
  • Pessimistic time – The maximum amount of time to complete a task
  • Most likely time – Assuming there are no problems, it is the best estimate of how long it would take to complete a task.
  • Expected time – Assuming there are problems, it is the best estimate of how long it would take to complete a task.

 

Here are several terms used in a PERT chart:

  • Float/Slack – Refers to the amount of time a task can be delayed without resulting in an overall delay to other tasks or the project
  • Critical Path – Indicates the longest possible continuous path from the start to the end of a task or event
  • Critical Path Activity – Refers to an activity without slack
  • Lead Time – Refers to the amount of time needed to finish a task without affecting subsequent tasks
  • Lag Time – The earliest time by which a successor event can follow another event
  • Fast Tracking – Refers to handling tasks or activities in parallel
  • Crashing Critical Path – Shortening the amount of time to do a critical task

 

To implement a PERT chart:

  • Identify the different tasks needed to complete a project. Make sure to add these in the right order and indicate the duration of each task.
  • Create a network diagram. Use arrows to represent the activities and nodes as milestones.
  • Determine the critical path and possible hack.

 

Advantages of PERT

Here are several benefits of using PERT in project management:

  1. It helps maximize the use of resources.
  2. It makes project planning more manageable.
  3. It’s useful even if there is little or no previous schedule data.
  4. It enables project managers to determine a more definite completion date.

 

Disadvantages of PERT

Like any other method, PERT comes with its share of limitations:

  1. In complex projects, many find PERT hard to interpret, so they also use a Gantt Chart, another popular method for project management.
  2. It can be tedious to update, modify and maintain the PERT diagram.
  3. It entails a subjective time analysis of activities, and for those who are less experienced or biased, it may affect the project’s schedule.

 

Additional Resources

CFI is the official provider of the global Financial Modeling & Valuation Analyst (FMVA)™ certification program, designed to help anyone become a world-class financial analyst. To keep advancing your career, the additional resources below will be useful:

  • Due Diligence in Project Finance
  • Evaluation Plan
  • Capital Expenditures
  • RAID Log

Financial Analyst Certification

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