A probability approach for the optimization of the PERT network and investments in R and D projects

A probability approach for accounting for uncertainties in the duration of activities in a PERT network is proposed. The effects of a delay in an activity on related activities are considered. They are incorporated in a stochastic network which permits a more realistic and comprehensive estimate of the time needed for executing a project. A sensitivity analysis indicates and evaluates the critical activities which will have a pronounced effect on the progress of the project. Following the sensitivity analysis an optimization scheme is devised for investment of additional resources in critical activities, in order to minimize cost or extension of the project timetable. Optimization criteria for investments of additional resources in delayed activities are also derived and the importance of a reliable reporting system is demonstrated.