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4.7746 8.9046

Figure 8.10 Example of a Triangular Distribution be completed as planned. For example, Tasks A and D follow a PERT distribution, while Tasks B and C follow a triangular distribution. In addition, Task E follows a normal distribution. The distributions and values are listed in the @Risk Functions column created by the @Risk™ add-on.

The Monte Carlo simulation using @Risk™ was set to run five hundred iterations or trials. The output of this simulation is illustrated in Figure 8.12. Each bar in the histogram shows the frequency, or number of times, an iteration generated a particular completion date for the project based on the probability distributions for the five tasks.

Running the simulation using @Risk™, the project manager can assess the likelihood of the project finishing on September 26 (i.e., within the original sixteen-day estimate) by viewing a cumulative probability distribution (see Figure 8.13).

As you can see in Figure 8.13, the probability of completing the project on September 26—the end of the project manager's original sixteen-day estimate—is less than .200 or 20 percent.

In addition, the project manager can conduct a sensitivity analysis to determine the tasks that entail the greatest risk. Figure 8.14 illustrates a tornado graph, which summarizes the tasks with the most significant risks at the top. As the risks are ranked

5 Mkiosoft Project - Project 1

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09(05(06 09(26(05 Finish=RiskOUTPUT0

09/05/05 09/06/05 DuraDoti=RiskPERT(1.2.5}

09/07/05 0&Î09/05 Dur ation=RiskTRf AN G( 2.3.6)

09/12/05 09/13/05 Duration=RiskTRIANG(1,2,4)

09/14/05 09/19/05 Duration=RiskPERT(3.4.7)

09/20/05 09/26/05 Ouralion=RiskNORMAL(5,3)

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Figure 8.11 Risk Simulation Using @Risk™ for Microsoft Project

SOURCE: @Risk is used with permission of Palisade Corporation, Newfield, NY

start

©RISK; Functions

09(05(06 09(26(05 Finish=RiskOUTPUT0

09/05/05 09/06/05 DuraDoti=RiskPERT(1.2.5}

09/07/05 0&Î09/05 Dur ation=RiskTRf AN G( 2.3.6)

09/12/05 09/13/05 Duration=RiskTRIANG(1,2,4)

09/14/05 09/19/05 Duration=RiskPERT(3.4.7)

09/20/05 09/26/05 Ouralion=RiskNORMAL(5,3)

il J

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Figure 8.11 Risk Simulation Using @Risk™ for Microsoft Project

SOURCE: @Risk is used with permission of Palisade Corporation, Newfield, NY

Distribution for Project/Finish

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Project Management Made Easy

Project Management Made Easy

What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.

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