Sunday, February 17, 2008

Using Simulation to Develop the Project Schedule

Have you ever been to an amusement park or space center and gone for a ride on a flight simulator? It feels very real, doesn't it? Simulation is also a very useful tool for project schedule development. It involves calculating multiple durations with different sets of assumptions.

Simulations are performed in an attempt to predict aspects of a particular system's behavior by creating a model of it. As a project manager, you can use simulation to estimate the range of possible outcomes for a project.

The most commonly used form of simulation on a project is schedule simulation. Schedule simulation reveals the risks of various schedule alternatives. This process allows project managers to examine different scenarios without costing their companies extra time and money. Simulating project schedules has other advantages, as well as some disadvantages.

Advantages of schedule simulation
  • simple to use
  • uses "what if" strategies
  • versatile—can be used on large, complex projects
  • produces fairly accurate predictions
  • saves money on testing
Disadvantages of schedule simulation
  • difficult to incorporate in overall project
  • probabilities may be biased
Currently, simulation possibilities are almost limitless, as are the number of industries using simulations to aid in their project completions.

The Monte Carlo Analysis is the most frequently used tool for simulation. It runs various pseudo-situations and determines the likelihood of their occurrence. Project managers can use tools like the Monte Carlo Analysis to determine the feasibility of their projects.

Monte Carlo Analysis performs project tasks numerous times. The result of this process is a "probability distribution" for the time required to accomplish a given task.

Monte Carlo Analysis can show a project's dependencies by graphically displaying the various paths each project activity can take. This is especially useful on larger projects since simple network diagrams can get very complicated and busy.

Once the range of project outcomes has been identified, the Monte Carlo Analysis can show the probability of each outcome occurring. This is beneficial because it allows the project team to choose the desired outcome.

When a project manager is developing a project schedule, one of the most important outputs of Monte Carlo Analysis is probability distribution. The probability distribution gives the project manager an estimate of how long the activity will take and a probability of the estimate being correct.

Another type of analysis is a what-if analyses. What-if analyses use logic to simulate different scenarios. Using adverse conditions, the what-if analyses assess the viability of a schedule. They may also be used to overcome or lessen the effects of unforeseen situations.

Today, software packages have been designed to run what-if analyses. The software generates a duplicate project database where it inserts the changed or adverse conditions and then runs the simulation. It compares the old information against the new information and adjusts the results accordingly.

Jacob Computer Systems ran a what-if analysis based on the delay of a small but important system component to check the feasibility of its project schedule.

Starlite Financial Group introduced an employee strike into its what-if analysis. This will help the company prepare a response plan to lessen the impact of a strike.

A key point to keep in mind, when deciding whether or not to use a simulation process, is that it can save your company valuable time and augments the efficiency of your project schedule.

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