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On path correlation and PERT bias

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  • Banerjee, Arunava
  • Paul, Anand

Abstract

Most studies of project time estimation assume that (a) activity times are mutually independent random variables; many also assume that (b) path completion times are mutually independent. In this paper, we subject the impact of both these assumptions to close scrutiny. Using tools from multivariate analysis, we make a theoretical study of the direction of the error in the classical PERT method of estimating mean project completion time when correlation is ignored. We also investigate the effect of activity dependence on the normality of path length via simulation.

Suggested Citation

  • Banerjee, Arunava & Paul, Anand, 2008. "On path correlation and PERT bias," European Journal of Operational Research, Elsevier, vol. 189(3), pages 1208-1216, September.
    • Handle: RePEc:eee:ejores:v:189:y:2008:i:3:p:1208-1216
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    References listed on IDEAS

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    1. Bajis Dodin, 1985. "Bounding the Project Completion Time Distribution in PERT Networks," Operations Research, INFORMS, vol. 33(4), pages 862-881, August.
    2. Genaro Gutierrez & Anand Paul, 2000. "Analysis of the Effects of Uncertainty, Risk-Pooling, and Subcontracting Mechanisms on Project Performance," Operations Research, INFORMS, vol. 48(6), pages 927-938, December.
    3. Kenneth R. MacCrimmon & Charles A. Ryavec, 1964. "An Analytical Study of the PERT Assumptions," Operations Research, INFORMS, vol. 12(1), pages 16-37, February.
    4. Larry J. Ringer, 1971. "A Statistical Theory for Pert in Which Completion Times of Activities are Inter-Dependent," Management Science, INFORMS, vol. 17(11), pages 717-723, July.
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    Cited by:

    1. Zhichao Zheng & Karthik Natarajan & Chung-Piaw Teo, 2016. "Least Squares Approximation to the Distribution of Project Completion Times with Gaussian Uncertainty," Operations Research, INFORMS, vol. 64(6), pages 1406-1421, December.

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