August 4, 2016

Probabilistic Network Analysis in Project Management 14:30 Probabilistic Network Analysis in Project Management Richmond Room

Probabilistic Network Analysis in Project Management

What is the probability that your project will actually be completed by the time you had estimated?  The CPM/PERT method assumes that the activity times are statistically independent, which allows us to sum the individual expected activity times and variances to get an expected project time and variance. It is further assumed that the network mean and variance are normally distributed. This assumption is based on the central limit theorem of probability, which for CPM/PERT analysis and our purposes states that if the number of activities is large enough and the activities are statistically independent, then the sum of the means of the activities along the critical path will approach the mean of a normal distribution. For the small examples it is questionable whether there are sufficient activities to guarantee that the mean project completion time and variance are normally distributed. Although it has become conventional in CPM/PERT analysis to employ probability analysis using the normal distribution regardless of the network size, the prudent user should bear this limitation in mind.

Session Category :  Regular Talk Session