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PERT Estimation Technique: Optimistic Pessimistic Most Likely

PERT (Program Evaluation Review Technique) is an estimation technique developed by the US Defense Department to help manage projects with high uncertainty, like missile development programs. PERT uses 3 estimates (optimistic, pessimistic, most likely) to calculate a weighted average expected duration and standard deviation for each task. This allows predicting the probabilities of completing tasks within certain time ranges and incorporating uncertainties into project schedules. PERT helps manage highly uncertain projects by statistically analyzing different outcome scenarios based on a range of task estimates.

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45 views2 pages

PERT Estimation Technique: Optimistic Pessimistic Most Likely

PERT (Program Evaluation Review Technique) is an estimation technique developed by the US Defense Department to help manage projects with high uncertainty, like missile development programs. PERT uses 3 estimates (optimistic, pessimistic, most likely) to calculate a weighted average expected duration and standard deviation for each task. This allows predicting the probabilities of completing tasks within certain time ranges and incorporating uncertainties into project schedules. PERT helps manage highly uncertain projects by statistically analyzing different outcome scenarios based on a range of task estimates.

Uploaded by

sumilogy
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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PERT Estimation Technique

PERT (Program Evaluation Review Technique) is an estimation technique which


was first developed and applied by United States Defence establishment for their
Ballistic Missile development program. It was one of their most ambitious
programs. Completion of this in time, ahead of the other nations was critical for
them. Such missile development program was filled with huge amount of
uncertainty, as it required large number supplier agencies working on new
technology development. This method of estimation which helped them build-in all
the uncertainties in their estimates and helped them to complete this program ahead
of their expected schedule.

PERT uses a three point estimation approach for a task. Any task filled with
uncertainties can have a wide range of estimate in which the task actually will get
completed. Uncertainties include both favourable conditions (opportunities) as well
as unfavourable conditions (threats). 

PERT includes statistical analysis.

The 3 points of estimates are as below:

 Optimistic estimate – Estimate when all favourable things will happen (all


opportunities happen and no threats take place)
 Pessimistic estimate – Estimate when all unfavourable conditions happen
(all threats happen and no opportunities take place)
 Most Likely estimate – Estimate when both favourable and unfavourable
conditions will happen

For example, if we think about a task which involves travelling in a crowded city
from a specific location in the city to the airport. Actual time taken will depend
upon the traffic condition on the road. 

This may take optimistically 30 minutes, pessimistically 90 minutes and most


likely 60 minutes. So the range in which the travel time will fall is 30 minutes to
90 minutes. 
An average expected estimate is calculated by taking a weighted average of these 3
points of estimates using below formula:

 E (Mean PERT Average) = (O+4ML+P)/6   (by giving more weightage to


most likely estimate)
 Standard Deviation (SD) = (P-O)/6

Actual time taken to travel will be anything within this range with the most likely
duration as 60 minutes. PERT allows applying statistical concepts to study the
probabilities of completing the tasks in a particular estimate range.

 Assuming that the mean is exactly in the middle, and assuming the actual
estimates will follow a normal distribution within the extreme range of optimistic
and pessimistic estimates, we can predict the following probabilities of completing
the task in certain range of time as below:

 Mean +/- 1 Standard Deviation range – Probability is 68.4%


 Mean +/- 2 Standard Deviation range – Probability is 95.5%
 Mean +/- 3 Standard Deviation range – Probability is 99.7% 

Conclusion

PERT estimation technique will be a practical approach for estimating when the
tasks on hand are filled with uncertainties, where the tasks may take up different
estimates depending upon certain conditions. Actual estimate is dependent on
certain variables. PERT allows preparing a more practical estimate by factoring the
3 point estimates into one as explained above. 

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