In this video, I will explain you how to apply PERT and 3Point Application on a simple Project
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04:44 – Probability Curve of the Project. Probability as a function of duration
Based on the optimistic, probable, and pessimistic duration of the activities, it is possible to determine the probable duration and standard deviation of the project.
The first step is to calculate all PERT/3Point estimates and standard deviations for all activities. In this example, these values have been determined. The method used for the calculation is not important. Anyway, we have the duration and standard deviation for all activities.
Step 1 – Project Duration @ 50%
Identify all the paths through the network and calculate their length. The path with the longest durations the critical path and should be considered further.
Step 2 – Standard Deviation of the Project
From statistics, we know that standard deviations cannot be added. Once we have identified the critical path, we know the standard deviation of the activities on the CP and we know from statistics that we cannot add standard deviation but we can add variances. Since the variance is the square of the standard deviation, we can add the variances of the CP and then take the square root to get the standard deviation.
Step 3 – Calculate the probabilities for different durations
Once we know the average duration (50% probability) and the standard deviation, we can use the normal distribution to determine the corresponding probability for every duration and create the corresponding S-curve. From this curve, we can select a duration and read from the graph the probability that the project will be completed in less than that duration.
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