Pert vs. Monte Carlo Essay Example
Question 3 – PERT Discussion
D) The Program Evaluation and Review Technique (PERT) was developed by Booz-Allen Hamilton, Lockheed Martin and the US Navy for the Navy’s Polaris project in 1958. Although the Polaris project was completed before its estimated completion date and under budget, we are not certain that this can be attributed solely to PERT, but PERT was used more widely on future projects after the success of the Polaris project. PERT became popular around the same time computers were progressing from the mainframe to mini-computers. During the evolution of computer technology, advanced programs were developed to provide further probabilistic estimates via simulations (Monte Carlo Analysis).
B) PERT assumes the Beta probability distribution to calculate the expected time of an activity within a network. PERT requires that for each activity, three duration estimates are needed (optimistic, most likely, pessimistic). This distribution is used for PERT since there was no set basis for selecting a specific distribution and was accepted in order to derive an equation. The Beta distribution is also used to calculate the variance and standard deviation of each task and ultimately the entire project via the critical path.
C) The Beta distribution constructs a smooth curve which places more emphasis on values around the most likely value while taking into account the pessimistic and optimistic values. The expected time calculated ideally would be close to the most likely time. Another distribution we could use other than Beta is the triangle distribution, which places even more emphasis on the most likely value than the Beta distribution.
E) The Central Limit Theorem (CLT) states that when using random samples from a population, the sampling distribution of the sample mean can be approximated by a normal distribution as the sample size becomes large (normally sample size of 30 or more). The CLT permits one to add the sum of the random sample means
D) The Program Evaluation and Review Technique (PERT) was developed by Booz-Allen Hamilton, Lockheed Martin and the US Navy for the Navy’s Polaris project in 1958. Although the Polaris project was completed before its estimated completion date and under budget, we are not certain that this can be attributed solely to PERT, but PERT was used more widely on future projects after the success of the Polaris project. PERT became popular around the same time computers were progressing from the mainframe to mini-computers. During the evolution of computer technology, advanced programs were developed to provide further probabilistic estimates via simulations (Monte Carlo Analysis).
B) PERT assumes the Beta probability distribution to calculate the expected time of an activity within a network. PERT requires that for each activity, three duration estimates are needed (optimistic, most likely, pessimistic). This distribution is used for PERT since there was no set basis for selecting a specific distribution and was accepted in order to derive an equation. The Beta distribution is also used to calculate the variance and standard deviation of each task and ultimately the entire project via the critical path.
C) The Beta distribution constructs a smooth curve which places more emphasis on values around the most likely value while taking into account the pessimistic and optimistic values. The expected time calculated ideally would be close to the most likely time. Another distribution we could use other than Beta is the triangle distribution, which places even more emphasis on the most likely value than the Beta distribution.
E) The Central Limit Theorem (CLT) states that when using random samples from a population, the sampling distribution of the sample mean can be approximated by a normal distribution as the sample size becomes large (normally sample size of 30 or more). The CLT permits one to add the sum of the random sample means