W2_BUD_Duration Estimate

1.    Problem Definition

I just completed a Project of the Engineering Documents (BED, FEED, Constructability Study, and Class-2 Cost Estimate) on the modification of a Waste Water Treatment Unit. The project was undertaken by state-owned engineering company. I am quite satisfied with the quality of work and no additional cost, but unfortunately the execution time delay 75% behind the schedule. The project is scheduled to be completed in 4 months but actually completed in 7 months. I need to find a way so that the same mistake does not happen again.

2.    Feasible Alternatives

There are two feasible alternatives:

a.    Continue what we doing right now using Comparative Estimate

b.    Develop better way to do duration estimate using PERT (Program Evaluation & Review Technique)

3.    Develop the outcomes for each alternative

a.    Comparative estimate: based on the time it took to do similar tasks on other projects  (usually < 50% probability)

b.    PERT: calculate duration based on preferable % probability (decision maker usually looking for 80 - 90% probability)

4.    Acceptable Criteria

Both alternatives applied only for Class 4 or 5 AACE Schedule Classification System. Acceptable criteria is duration estimate accuracy >90% based on historical data (actual duration).

5.    Analysis and comparison of the alternatives

To perform PERT analysis, I provide questions to a few people in my office are experienced in engineering design.  With the same scope of work and resources what is the time required to complete this kind engineering design work (optimistic, pessimistic, and most likely scenario). And herewith the average result:

	Optimistic	Pessimistic	Most Likely	Mean	Variance	P80	P90
Time required	3.4	7.6	4.4	6.4	0.7	7.0	7.3

Comparison between alternatives:

Method	Duration Estimate	Actual Duration	Accuracy	Remarks
Comparative Estimate	4 months	7 months	57%	Not acceptable
PERT (P80)	7 months		100%	Acceptable
PERT (P90)	7.3 months		104%	Acceptable

The result shows that 4 month duration using Comparative Estimate basically based on most likely time required perception which is only <50% probability. Acceptable alternatives with > 90% accuracy are PERT (P80) and PERT (P90).

6.    Select the preferred alternative

Based on analysis result, PERT P80 shows that the duration estimate is exactly the same with actual duration. But to give more confidence level better to choose PERT P90.

7.    Performance Monitoring & Post Evaluation of Result

The chosen method will be monitored and evaluated by compare between duration estimate and actual duration for the next project.

Reference

1.    Giammalvo, P.D. (2012). AACE Certification Prep. Course Module

2.    AACE International (2010). Recommended Practice No. 27R-03: Schedule Classification System

3.    PERT. Retrieved from http://www.netmba.com/operations/project/pert/ 

Estimating Time Accurately. Retrieved from http://www.mindtools.com/pages/article/newPPM_01.htm