How adding new information modifies the estimation of the mean and the variance in PERT: a maximum entropy distribution approach

A. Hernández-Bastida and M. P. Fernández-Sánchez ()
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A. Hernández-Bastida: University of Granada
M. P. Fernández-Sánchez: University of Granada

Annals of Operations Research, 2019, vol. 274, issue 1, No 14, 308 pages

Abstract: Abstract This paper presents an alternative method to estimate the mean and the variance when using the program evaluation and review technique (PERT). Different levels of information, provided by an expert, are considered in the PERT scenario to obtain the values of the mean and the variance by means of a maximum entropy distribution approach. In our opinion, the information to be taken into account should be only that supplied by the expert. We also perform a numerical analysis to examine how the estimates vary if new information is added. From this, we conclude that the inclusion of new information (even for analytic purposes) produces significant changes in the estimates proposed.

Keywords: PERT; Unimodality; Maximum entropy; Beta distribution (search for similar items in EconPapers)
Date: 2019
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DOI: 10.1007/s10479-018-2857-4

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