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FIGURE 12-4. Simplified PERT network.

Using PERT we can now identify the earliest possible dates on which we can expect an event to occur, or an activity to start or end. There is nothing overly mysterious about this type of calculation, but without a network analysis the information might be hard to obtain.

PERT charts can be managed from either the events or the activities. For levels 1-3 of the Work Breakdown Structure (WBS), the project manager's prime concerns are the milestones, and therefore, the events are of prime importance. For levels 4-6 of the WBS, the project manager's concerns are the activities.

The principles that we have discussed thus far also apply to CPM. The nomenclature is the same and both techniques are often referred to as arrow diagramming methods, or activity-on-arrow networks. The differences between PERT and CPM are:

• PERT uses three time estimates (optimistic, most likely, and pessimistic as shown in Section 12.7) to derive an expected time. CPM uses one time estimate that represents the normal time (i.e., better estimate accuracy with CPM).

• PERT is probabilistic in nature, based on a beta distribution for each activity time and a normal distribution for expected time duration (see Section 12.7). This allows us to calculate the "risk" in completing a project. CPM is based on a single time estimate and is deterministic in nature.

• Both PERT and CPM permit the use of dummy activities in order to develop the logic.

• PERT is used for R&D projects where the risks in calculating time durations have a high variability. CPM is used for construction projects that are resource dependent and based on accurate time estimates.

• PERT is used on those projects, such as R&D, where percent complete is almost impossible to determine except at completed milestones. CPM is used for those projects, such as construction, where percent complete can be determined with reasonable accuracy and customer billing can be accomplished based on percent complete.

12.2 GRAPHICAL EVALUATION AND REVIEW TECHNIQUE (GERT) _

Graphical evaluation and review techniques are similar to PERT but have the distinct advantages of allowing for looping, branching, and multiple project end results. With PERT one cannot easily show that if a test fails, we may have to repeat the test several times. With PERT, we cannot show that, based upon the results of a test, we can select one of several different branches to continue the project. These problems are easily overcome using GERT.

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