W1_Thuraiya_Leadership Styles analysis Using Tuckman model

W4_Juhaina_Estimation of Duration to Tender Site Studies Contracts Using PERT

1-      Problem identification:

As part of the Request for Proposals Package (RFP) related to power and water projects, it is an essential requirement to include site studies related to the allocated site in order to provide the bidders with enough level of information on the site, and therefore reduce the site risks and related costs. OPWP usually hires third party contractors to perform these studies prior to releasing the RFP through a competitive tender process.

As is it is essential to issue the RFP as schedules, it is important to understand the most expected duration it takes to tender and hire a contractor to perform the site studies. This blog aims to estimate the most expected duration.

2-      Feasible Alternatives

The current project schedules allow for a standard 90 day period to hire a contractor, however the PERT analysis (Program Evaluation and Review Technique) can be used to identify the most suitable period which is the most common method used in three-point estimation technique.

3-      Development of the outcome of the alternatives

Using the PERT analysis on the historical data, we can provide the alternatives of the duration as per the following:

1.    Best Case

2.    Worst Case

3.    Most Likely

4-      Selection criteria

The selection criteria will be based on a 95% comfort level to achieve the process within the duration estimated.

5-      Analysis and Comparison of the alternatives

The historical data of the tender duration for the most recent 10 projects has been collected and presented in the following table:

#	Project	Tender Duration (days)
1	Barka IWP	72
2	Sohar IWP	89
3	Salalah IWP	75
4	Sharqiyah IWP	75
5	Khasab IWP	71
6	Duqm IWP	71
7	Sohar IPP	93
8	Ibri IPP	105
9	Salalah 2 IPP	84
10	Mussandam IPP	159

Using the statistical Process Control, we first eliminate any outliers from the data using -/+ 3 sigma. The average is 89.4 days (by calculating the sum of total days by 10). Sigma here is calculated as (highest number of days – lowest number of days)/6 and the result is 14.66. Therefore the following is calculated:

-       Upper Control Limit is 89.4 + 14.66 = 104.06

-       Lower Limit is 89.4 – 14.66 = 74.74

The data is accordingly modified and only the following data set is considered:

#	Project	Tender Duration (days)
2	Sohar IWP	89
3	Salalah IWP	75
4	Sharqiyah IWP	75
7	Sohar IPP	93
9	Salalah 2 IPP	84

According to the data above, the following table provides the most probable scenarios:

Most Optimistic (O)	Most Likely (M)	Most Pessimistic (P)
75	83.2	93

Using the Pert Formula below, we can calculate the weighted average:

(O + 4M + P)/6

= (75 + (4*83.2) + 93)/6

= 83.5 days

-       Mean Duration = 83.5 days

-       Standard Deviation = (P – O)/6 = (93 – 75)/6 = 18/6 = 3

-       Variance = (3)² = 9 days variance

Using the Z table, the P95 is calculated as follows:

-       P95 = Mean + (Standard Deviation * 1.65) = 83.5 + (3*1.65) = 88.45 days

6-      Selection of the preferred alternative

From the pert analysis demonstrated above, it is shown that for a 95% comfort level, the tenders are expected to be achieved within 88.45 days. This is very close to the standard set in the schedules and this show that our standard is based on a good estimation. It is recommended to adjust the timeframe to be 88.45 days accordingly.

7-      Performance monitoring and the post evaluation results

In order to further verify the above, it is suggested to look into the different activities within the process and identify the critical path and possibly replan the schedule to make it more time efficient.

8-      References

1-        Use PERT Technique for More Accurate Estimates, by Tom Mochal, June 25, 2007 (visited on 30 November 2017)

https://www.techrepublic.com/blog/it-consultant/use-pert-technique-for-more-accurate-estimates/

2-      What is a PERT Chart? By Eileen O’Loughlin (Visited on 30 November 2017)

https://www.softwareadvice.com/resources/what-is-a-pert-chart/  

3-      PERT Estimation Technique, (Visited on 30 November 2017)

https://www.tutorialspoint.com/management_concepts/pert_estimation_technique.htm