Schedule risk analysis: Monte Carlo, merge bias and contingency

Try 3 questions on this

Pick an answer to see why each option is right or wrong.

1. A predictive project's critical path schedule shows several parallel paths merging at final testing, each on time. The sponsor asks whether the planned finish date is realistic. Which of the following should the project manager provide?

   Right. In the game that’s Renown for your Business Environment building.

   Not that one: D is right. In the game your Business Environment building would lose a little Renown, and this question would come back later.

   Your answerA.Total float on each pathFloat is calculated from network logic. It does not tell the sponsor how likely the planned date is once duration uncertainty and risks are applied.Your answerB.The critical path finish dateThe calculated date assumes every duration comes in as planned. GAO says such dates tend to underestimate the finish, especially where paths merge.Your answerC.A baseline variance reportA variance report compares work done with the baseline. It does not test whether the remaining schedule's finish date is achievable.The answerD.A Monte Carlo simulationGAO says that unless a statistical simulation is run, a completion date calculated from schedule logic and durations tends to underestimate the critical path duration.

   Show the full explanation and doc quotes

   Where parallel paths merge, the milestone is late if any path is late, so a date every path meets on its own can still be unlikely. A Monte Carlo simulation gives the probability of meeting the date.

   Written from www.gao.gov/assets/d1689G.pdf

2. A schedule risk analysis on a predictive project shows that the committed finish date has a low probability of being met. Which of the following should the project manager use the results for?

   Right. In the game that’s Renown for your Business Environment building.

   Not that one: C is right. In the game your Business Environment building would lose a little Renown, and this question would come back later.

   Your answerA.Forecasting the actual finish dateThe simulated dates assume no extra mitigation. GAO treats them as inputs for management action, not as a forecast of the real finish.Your answerB.Resetting the baseline finish dateThe analysis informs action; it is not a trigger to reset the baseline. GAO says rebaselining should be rare.The answerC.Guiding mitigation of delay driversGAO says schedule risk analysis results are best viewed as inputs to program management rather than forecasts of how the program will finish.Your answerD.Shortening the activity duration estimatesCutting estimates to match a preferred date, without justification, is likely to increase the risk of delay, according to GAO.

   Show the full explanation and doc quotes

   They show when the program is likely to finish if the team takes no further mitigation, and the high-priority risks they identify guide further mitigation.

   Written from www.gao.gov/assets/d1689G.pdf

3. A schedule risk analysis on a predictive project has sized the schedule contingency the project needs. The project manager now has to decide where that contingency sits in the schedule network. Which of the following should the project manager choose?

   Right. In the game that’s Renown for your Business Environment building.

   Not that one: B is right. In the game your Business Environment building would lose a little Renown, and this question would come back later.

   Your answerA.Lags between critical activitiesGAO says contingency should not be a lag between activities: lags have no descriptive name and the contingency can be lost in the network logic.The answerB.One activity before the finish milestoneGAO's Schedule Assessment Guide says it is preferable to hold schedule contingency as one activity just before the finish milestone.Your answerC.Extra duration on risky activitiesPadding specific activities apportions contingency in advance, which GAO does not recommend because the risks that will occur are not known yet.Your answerD.Separate activities before each key milestonePlacing contingency before key milestones is allowed, but GAO prefers a single activity before the finish milestone because dispersed contingency tends to be consumed early and is harder to track.

   Show the full explanation and doc quotes

   Dispersing it to key milestones can cause it to be consumed prematurely, makes it less visible and harder to track, and encourages work toward late dates.

   Written from www.gao.gov/assets/d1689G.pdf