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By G. K. Rand, R. W. Eglese

ISBN-10: 0080333613

ISBN-13: 9780080333618

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Feedback continues until everyone is satisfied with the assumed probabilities and decision rules in relation to the conditions identified earlier. When the project team is satisfied with the schedule risk analysis, associated cost risk is considered. For example, activity duration distributions are combined with unit of resource per unit time distributions, and probabilistic treatment of exchange rates and inflation rates are used if appropriate. The relative impact of each source of cost risk is portrayed in the format of Figures 8 and 16.

The method proceeds in a series of stages starting from the normal solution, exactly like the original flow algorithm, to define the minimum cost/time relationship for the project. The difference is that the original project network is replaced by an identical flow network, where minimum and maximum arc capacities, (lij, U 4j), are defined in Table 1. TABLE 1. Arc flow parameters (lijt Ujj) when cost slope is e,y State of arc at beginning of iteration Arc flow parameter (1^, U^) Critical and normal duration Critical and intermediate duration Critical and crash duration Noncritical (O, Cjj) (e^, e^) (e^, <») (O, O) At each iteration, once the arc flow parameters have been assigned according to the above table, the minimum network cut is found.

Assume that the controller crashes the next 'perceived' critical activity, 3-5, to its optimistic duration of 1, to bring the project duration back to target. Assume further that this time is actually achieved. The simulation then proceeds to the next review time of 10. At the next review time 10, activities 2-4, 2 - 5 , 3-5 and 5-6, have been completed, as their sampled durations were, 3, 2, 2 and 1, respectively. Activities 4-6, 5-8 and 5-7, which had sampled durations of 4, 7 and 4, respectively, are partially complete.

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Further Developments in Operational Research by G. K. Rand, R. W. Eglese

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