Mitigating Project Schedule Risks by Identifying Subcritical Paths and Variance-Critical Activities

Abstract

Significant risks in project completion delay could be buried in the development of project schedules because of theoretical flaws in project schedule risk analysis. Major project delays hamper infrastructure development endeavors and cause negative consequences to project finance, the public interest, and socioeconomic growth. This research critically reviews the theoretical foundation of the Program Evaluation and Review Technique (PERT) and identifies two major flaws: (1) failing to account for variances of activities on subcritical paths; and (2) lacking the functionality of characterizing variance-criticality for activities in a project network. Further, the path variance-criticality index and the activity variance-criticality index are formalized for defining the subcritical path(s) and identifying the variance-critical activities. Reducing time duration variances in the identified variance-critical activities exerts a significant impact on mitigating project schedule delay risks. A case study is given to illustrate the analytical steps for identifying variance-critical activities in a project. Monte Carlo simulations were conducted to validate the effectiveness of the proposed analytical approach. The enhanced PERT for project schedule risk analysis is instrumental in (1) identifying critical and subcritical paths in the project network model; (2) clarifying the notion of variance-criticality for prioritization of activities based on the impact of activity time variance on project time variance; and (3) reining in project schedule risks by reducing time duration variances on those variance-critical activities in project planning.