Deriving A Bridge to Transfer Unknown (Probabilistic) Times to Known (Deterministic) Times to Allow Confidence Level Estimates for a Time/Cost Tradeoff: A Critical Analysis of PERT/CPM Procedures

Authors

  • Robert DeWitt Yearout University of North Carolina at Asheville
  • Keith Krumpe University of North Carolina at Asheville
  • Joseph Lane University of North Carolina at Asheville
  • Jimin Lee University of North Carolina at Asheville
  • Mary Lynn Manns University of North Carolina at Asheville
  • Claudel Brooks McKenzie University of North Carolina at Asheville
  • Linda Nelms University of North Carolina at Asheville
  • Mckenna Marie Stockhausen University of North Carolina at Asheville
  • Lauren Noel Turnburke University of North Carolina at Asheville

DOI:

https://doi.org/10.23055/ijietap.2010.17.3.378

Keywords:

Program Evaluation Review Technique, PERT, Critical Path Method, CPM

Abstract

Network analysis is the examination of activities grouped together by estimated completion times and precedence.  Program Evaluation Review Technique (PERT) determines a network’s critical path. The critical path, or the longest path through the network, has no “slack” and is the earliest the project can be completed.  Included in this stochastic analysis is the critical path’s variance.  By using the variance and assuming the normal distribution, the analyst can determine the probability for project completion on schedule.  Without this confidence level adjustment, there is a 50% probability that the project will be completed on time.  Critical Path Method (CPM), which is deterministic, uses the same definition for the critical path and emphasizes time/cost tradeoff. However, the two methods are not completely compatible.  Since the 1950s textbook writers and software producers have attempted to combine these methods.  The problem occurs when the PERT analysis projects a project out to a specified confidence level and then a project manager places the activities’ times into a CPM network.  Rather than the cost/time trade-off analysis incorporating calculations that provide a probability of completion at the desired confidence level, the probability of completion is reduced to the original 50%.  This may explain why projects are not completed on time.  Rather than reconciling the differences, current literature attempts to combine the two and states that there are no differences.  This project consisted of the following: conducting a random100 iteration network simulation, developing a heuristic that allocates expected times for each activity, validating the heuristic by testing 60 networks at  90, 95, and 97.5% confidence levels, and conducting a CPM analysis at 95%. Results using the heuristic revealed a successful allocation of projected activity times at 0.00 percent error.  This significant research will assist engineers and managers in making more realistic project completion and cost projections.  These findings have a potential for initiating changes in operations research/management science textbooks and in project management software.

Author Biographies

Robert DeWitt Yearout, University of North Carolina at Asheville

Keith Krumpe, University of North Carolina at Asheville

Keith Krumpe, Dean of Natural Sciences and Professor of Chemistry at the University of North Carolina at Asheville (UNCA), BS in chemistry from Allegheny College and Ph.D. in organic chemistry at Emory University. He completed a post-doctoral research fellowship at the University of Pittsburgh before taking a position at UNCA in 1992.  He  is actively engaged in undergraduate research that focuses on the synthesis of biologically active molecules and the development of new synthetic methodologies. He has also served on the editorial staff of the NCUR Proceedings for over 10 years and currently serves as the Onsite Editor at each conference. Keith is also actively engaged with SENCER as a Summer Institute faculty member, as a senior associate, and as a co-director of the newly formed SENCER Center of Innovation – South.

Joseph Lane, University of North Carolina at Asheville

Joseph Lane, BS degree in Industrial and Engineering Management with an emphasis in statistics and project management.  Graduated with Departmental Distinction and designation as a University Research Scholar.

Jimin Lee, University of North Carolina at Asheville

Jimin Lee Assistant Professor of Statistics, University of North Carolina at Asheville (UNCA), B.S., Mathematics, Kyungpook National University in Korea, M.S., University of North Carolina at Charlotte(UNCC), Ph.D., UNCC. Dr. Lee won the College of Arts & Sciences and Graduate School Award for Excellence in Teaching by a Graduate Teaching Assistant in a Mathematics or Sciences Discipline at UNCC. Dr. Lee has published several papers in national and international peer reviewed journals such as Statistical Sinica and Journal of Applied Statistics. Her research interests are in the areas of Biostatistics, Biology, Epidemiology, and Industrial Engineering.

Mary Lynn Manns, University of North Carolina at Asheville

Mary Lynn Manns, PhD, Associate Professor Management  University of North Carolina at Asheville where she teaches courses in Management Information Systems, Operations Research/Management Science, and Change Leadership. She is the co-author of the book Fearless Change:  Patterns for Introducing New Ideas, which documents the successful strategies used by leaders of change in many different types and sizes of organizations throughout the world.  She does numerous presentations and consultations on the topic of leading organizational change in and outside the United States. 

Claudel Brooks McKenzie, University of North Carolina at Asheville

Claudel B. McKenzie Chair, Department of Management and Accountancy and Professor of Accounting, B.S. Accounting, Mars Hill College; M.B.A., Western Carolina University. CPA and CMA. Distinguished Teaching Award Recipient 1991 and Board of Governors Award for Excellence in Teaching 1998.  In additional in publishing in many accountancy journals, she has published several professional papers and case studies that reflect course objectives.  In recent years she has become more interested in researching industrial and manufacturing issues and has published in the International Journal of Industrial Ergonomics and in the Proceedings for the International Conference on Industrial Engineering Theory, Applications and Practice.  Mrs. McKenzie also won the Ruth and Leon Feldman Professorship Distinction for Outstanding Scholarship and Service for the 2005-2006 year.

Linda Nelms, University of North Carolina at Asheville

Linda Nelms, Professor of Management, University of North Carolina at Asheville (UNCA), B.A., Literature, UNCA; M.B.A., University of North Carolina at Chapel Hill. North Carolina, C.P.A., C.M.A., C.P.I.M. Mrs. Nelms awards include the Ruth and Leon Feldman Professorship for Outstanding University Service and the University Service Council Award.  She has published several articles in top tier peer reviewed international journals such as The Management Accountant and The Journal of Financial Planning conference proceedings include the Annual International Journal For Industrial Engineering Theory, Practice, and Application Conference.  Mrs. Nelms has served as the Director of UNCA's Undergraduate Research Program.  Her research interests are in the areas of managerial and accounting ethics, economic analysis, inventory, and other related topics that span the gap between economics, accounting and engineering.

 

 

Mckenna Marie Stockhausen, University of North Carolina at Asheville

 Mckenna Stockhausen, BS in Management (Operations Concentration) with a minor in Economics from UNC Asheville in May 2010.  Ms. Stockhausen was a recipient of the Samuel J. Millar Soccer Scholarship and the Mortimer Kahn Scholarship in 2008-2008 and also received the Helen W. and Frederick R. Eckley Jr. Management & Leadership Scholarship for the 2009-2010 year. She is a scholarship athlete and senior captain of the UNC-Asheville’s Women’s Soccer Team (NCAA Division I) program and represented UNC-Asheville at the Big South Leadership Conference in 2008 and 2009. Graduated with Departmental Distinction and named a University Research Scholar.

Lauren Noel Turnburke, University of North Carolina at Asheville

Lauren Turnburke, BS in Management (Operations Concentration) with a minor in Economics from UNC Asheville in May 2010 Cum Laude.  A member of Beta Gamma Sigma (BGS), she received the university’s BGS scholarship in 2009-2010. Ms. Turnburke represented UNC-Asheville at the BGS National Leadership Forum in February 2010.  She received the UNC-Asheville Management Endowment Scholarship and the Eckley Management Leadership Scholarship in 2008-2009.  She is a scholarship athlete on UNC-Asheville’s Women’s Soccer Team (NCAA Division I) program.  In addition to Latin Honors, she was designated a University Research Scholar and Departmental Distinction.     

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Published

2010-09-09

How to Cite

Yearout, R. D., Krumpe, K., Lane, J., Lee, J., Manns, M. L., McKenzie, C. B., Nelms, L., Stockhausen, M. M., & Turnburke, L. N. (2010). Deriving A Bridge to Transfer Unknown (Probabilistic) Times to Known (Deterministic) Times to Allow Confidence Level Estimates for a Time/Cost Tradeoff: A Critical Analysis of PERT/CPM Procedures. International Journal of Industrial Engineering: Theory, Applications and Practice, 17(3). https://doi.org/10.23055/ijietap.2010.17.3.378

Issue

Vol. 17 No. 3 (2010)

Section

Production Planning and Control

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