Abstract:

 Managers and firms face large and complex projects to be done. They use varying techniques to plan, schedule and control activities for the project. Among these techniques used is the Program Evaluation & Review Technique (PERT) which was developed in 1950. The traditional Program Evaluation and Review Technique lack proper allocation of the resources and expense recognition in a project. It fails to provide ways to maximize the capacity of every cost to be incurred in a project. The essence of the study is to assess whether the incorporation of flexible budget provides substantial improvement in the recognition of the cost in every activity level. This study basically shows that in activities that simultaneously commence, a comprehensive alternative solves the issue of allocation of limited resources and a more reliable expense budget with the use of flexible budgeting. A flexible budget calculates expenditures at different levels of activity. It is a budget that flexes in response to the change in the activity level. To determine the efficiency of these extensions, a comparison between the original PERT method and the one with percentage-of-completion and the flexible budget has been done. Results show that managers will be able to account for a more reliable expense budget if flexible budget rather the static budget recognized the PERT. The difference between the traditional model and the proposed model provides significant enhancement in the performance in project management.