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W3__Hamda__Using PERT technique in Estimating time duration for processing Monthly Invoice__

1-       Problem Recognition

In each company, each project depends on the estimations of different aspects such as, the estimating of time will be taken to complete each activity under the project and the estimating of the costs that will be incurred in executing any activity or phase under the project. under CCI department in our company there are several small projects which have START & FINISH date. One of these main projects is Processing the Monthly Invoices of different Power and Desalination plants as I discussed in W2 blog. Processing the Monthly Invoice has a specific FINISH date which is according to the receipt date of these such invoice. Processing the Monthly Invoice depends on different things which may affect on completing the task in the specific scheduled date. In this blog, I will use the Project Evaluation and Review Technique (PERT) in analyzing this activity and to find the estimated and preferred time to complete it.

2-       Feasible alternative

PERT is a three-point activity estimating technique that considers estimation uncertainty and risk by using three estimates to define an approximate probability for an activity’s cost or duration. At activity level PERT can help us to determine a more realistic estimate. Bell curve, also called a Normal Distribution curve is one methodology used in PERT technique. Figure 1 shows the Normal Distribution curve.
In order to use this technique, there are 3 main estimated point shall be known and used which they are:
-          Most likely (Tm) - This is the time duration where there is a high probability of completing the task within the given time duration.
-          Optimistic(To) - In this scenario, the estimate is determined considering all favorable conditions; i.e. it is a best-case scenario. In other words, you can say that this is the shortest time in which you may complete the task.
-          Pessimistic(Tp) - Here, estimate is determined considering all unfavorable conditions; i.e. worst-case scenario. In other words, this is the longest time the activity might require to complete itself.
The formula used in calculating the PERT is: 
PERT Estimate = (To + 4Tm + Tp) / 6 & Standard Deviation = (Tp – To) / 6 & Variance (sigma)= ((Tp – To) / 3) ^2
3-       Development of the outcome of Alternative
Regarding to the above description of one main task/project under CCI department, the completion of it depends on different tasks such as: 
1-       The submitting and receiving Power and Water Outage Confirmations. 
2-       Availability of the all data required in processing the invoice. 
3-       The preparation, editing, and reviewing the sheet of calculations.  
4-       The process of checking the accuracy of such data received from the Generation. 
5-       The process of the plant model (FDM model). 
6-       Finalizing the process of monthly invoice. 
7-       Reviewing the invoice by the Senior Engineers and approve it. 
8-       Reviewing the invoice by the Department Manager and approve it.
9-       Reviewing the invoice by the Department Director and approve it.
10-   Submitting the invoice to Finance Department (FINISH Date).
From all these tasks, I think the main important tasks that processing the Monthly Invoice depends on are the first 4 one (tasks from 3-6), Because completing these four tasks on time which make the other 4 tasks on time. 
4-       Selection Criteria 
Activity
Tm of completing it
To of completing it
Tp of completing it
Estimate Duration “PERT”
Standard Deviation 
Variance
Task 3
3.5
2
4
3.33
0.33
0.44
Task 4
3.5
2
5
3.50
0.50
1.00
Task 5
8
7
10
8.17
0.50
1.00
Task 6
2
1.5
3.5
2.17
0.33
0.44
Remaining last tasks
1.5
1
2
1.50
0.17
0.11

activity
Tm of completing it
To of completing it
Tp of completing it
Estimate Duration “PERT”
Standard Deviation 
Variance
duration in processing the monthly invoice
18.5
13.5
24.5
18.67
1.83
13.44

5-       Analysis and comparison of the Alternative
Table 1 shows the three-estimated duration for the main tasks in processing the monthly invoice which I mentioned above in point 3, because completing these task on time will help us in completing the remaining task on time. They will not take a lot of time as I mentioned in table 1. As shown in table 1, task 4 & task 5 have the largest estimate duration “PERT”, Standard Deviation and finally the sigma of it. So, for them since they have large variance means not completing them on time, will might cause a risk on our company in completing the monthly invoice.
From table 2, we can say that: 
-           Optimistically we can complete the activity in five (13.5) days. There will be 11.5 days from the Due Date, which is very good estimating duration in completing the invoice. 
-           Pessimistically we estimate that it can take us up to Fifteen (24.5) days. There will 0.5 (half) day from the Due Date. 
-           Most likely it will take us only seven (18.5) days. There will be 6.5 days from the Due Date which a quite good. It can be improved by decreasing the number of days consumed in processing task 4 for example. 

6-       Selection of the preferred Alternative 
By suing one of the most useful technique in analyzing and estimating the time and the cost of each activity, or task under any project or in general case estimating the project duration or cost which is PERT technique, it is clear from the above tables that the best case of time duration in processing the monthly invoice is 13.5 days (by taking in our account the days consumed in each task especially task 4&5). This duration is actually the best duration because by completing the invoice in period we will have enough time for other tasks and also remaining days from the Due Date which will help other department in processing their work on time. 
7-       Performance Monitoring and the Post Evaluation of result
Using the PERT technique in calculating the estimated duration of completing the project and the cost that will be incurred in executing any project will might be used in calculating the Contingency Reserve for that project in order to avoid any risk on the company in case the monthly will not be submitted before the Due Date to Finance Department and then to the Generator. 
        References
1-       Fahad Usmani, (2017). A Short Guide to PERT – Program Evaluation and Review Technique. Retrieved 20 November 2017, from https://pmstudycircle.com/2013/08/pert-program-evaluation-and-review-technique/ 
2-       Dave Fourie, (2015). What is PERT and how can we use it? Retrieved 20 November 2017, from https://www.linkedin.com/pulse/what-pert-how-can-we-use-dave-fourie-pmp-prince2-  
    3- A Guide to the PROJECT MANAGEMENT BODY OF KNOWLEDGE (PMBOK GUIDE), Fifth Edition. Retrieved 14 November 2017.


Comments

  1. Dr. PDGNovember 20, 2017 at 12:46 PM

    Sorry Hamda but you need to go back and look at some of your colleagues postings? Where did you see or find ANYTHING that tells you that you can ADD the Standard Deviations?

    Better go back and talk to Mr. Nasser? http://pmpopwp.blogspot.co.id/2017/11/w2.html

    Make sure you fix your error and REPOST as your W3.1 blog.....

    Don't forget that lesson learned.... It is a really important one....

    BR,
    Dr. PDG, Jakarta

    ReplyDelete
    Replies
    1. Hamda AL MalkiNovember 20, 2017 at 2:23 PM

      Dear Dr.Paul, table 2 doesn't shows the summation of Standard Deviation. what I did in table 2 is that I added the most likely period of doing all tasks and the same for all. and then I calculate the mean, Standard deviation and the variance. Please correct me if this way is wrong way?

      Delete
  2. Hamda AL MalkiNovember 20, 2017 at 2:25 PM

    And I will repost the blog, but I will replace the number of days consumed in doing each task per month by the number of hours. and the calculation will be done

    ReplyDelete

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