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PM0015-SOLVEDASSIGN

PM0015-SOLVEDASSIGN

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Published by Fatema Yusuf Izzy

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Published by: Fatema Yusuf Izzy on Jul 05, 2012
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05/18/2013

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1)
 
Discuss the advantages of Decision Tree.
A
decision tree
is a decision support tool that uses a tree-like graph or model of decisions and theirpossible consequences, including chance event outcomes, resource costs, and utility. It is one way todisplay an algorithm. Decision trees are commonly used in operations research, specifically indecision analysis, to help identify a strategy most likely to reach a goal. If in practice decisions haveto be taken online with no recall under incomplete knowledge, a decision tree should be paralleledby a probability model as a best choice model or online selection model algorithm. Another use of decision trees is as a descriptive means for calculating conditional probabilities.In decision analysis, a "decision tree"
and the closely related influence diagram
is used as avisual and analytical decision support tool, where the expected values (or expected utility) of competing alternatives are calculated.A decision tree consists of 3 types of nodes:-1.
 
Decision nodes - commonly represented by squares2.
 
Chance nodes - represented by circles3.
 
End nodes - represented by triangles
Advantages
:Decision trees:
1.
 
Are simple to understand and interpret.
People are able to understand decision treemodels after a brief explanation.
2.
 
Have value even with little hard data.
Important insights can be generated based on expertsdescribing a situation (its alternatives, probabilities, and costs) and their preferences foroutcomes.
3.
 
Use a
white box
model.
If a given result is provided by a model, the explanation for theresult is easily replicated by simple math.
4.
 
Can be combined with other decision techniques.
The following example uses Net PresentValue calculations, PERT 3-point estimations (decision #1) and a linear distribution of expected outcomes (decision #2):
Example
Decision trees can be used to optimize an investment portfolio. The following example shows aportfolio of 7 investment options (projects). The organization has $10,000,000 available for the totalinvestment. Bold lines mark the best selection 1, 3, 5, 6, and 7, which will cost $9,750,000 and create
 
a payoff of 16,175,000. All other combinations would either exceed the budget or yield a lowerpayoff.
2)
 
Describe network analysis in project management
Project management is concerned with the overall planning and co-ordination of a project fromconception to completion aimed at meeting the stated requirements and ensuring completion ontime, within cost and to required quality standards.Project management is normally reserved for focused, non-repetitive, time-limitedactivities with some degree of risk and that are beyond the usual scope of operationalactivities for which the organization is responsible.The core technique available to Project Managers for planning and controlling theirprojects is Network Analysis.Where projects become complex, it becomes difficult tosee relationships between activities by using a Gantt Chart. For more complex projectsNetwork Analysis techniques are used. The following are the Network analysis techniques
 
PERT →
Program, Evaluation and Review Technique
 
CPM →
Critical Path Analysis
Network Analysis or Critical Path Analysis (CPA) or the American “Program, Evaluationand Review Technique” (PERT) is one of the classic methods of planning and controlling
the progress of projects.The two most common and widely used project management techniques that can beclassified under the title of Network Analysis are Programme Evaluation and review
 
Technique (PERT) and Critical Path Method (CPM). Both were developed in the 1950's tohelp managers schedule, monitor and control large and complex projects. CPM was firstused in 1957 to assist in the development and building of chemical plants within theDuPont corporation. Independently developed, PERT was introduced in 1958 followingresearch within the Special Projects Office of the US Navy. It was initially used to planand control the Polaris missile programme which involved the coordination of thousandsof contractors.The use of PERT helps in visualsing the range of project completion dates andannouncing more realistic project completion time target.
3)
 
Describe the Project Evaluation and Review Technique (PERT).
The
Program Evaluation and Review Technique
(PERT) is a network model that allows forrandomness in activity completion times. PERT was developed in the late 1950's for the U.S. Navy'sPolaris project having thousands of contractors. It has the potential to reduce both the time and costrequired to complete a project.
The Network Diagram
In a project, an activity is a task that must be performed and an event is a milestone marking thecompletion of one or more activities. Before an activity can begin, all of its predecessor activitiesmust be completed. Project network models represent activities and milestones by arcs and nodes.PERT is typically represented as an
activity on arc
network, in which the activities are represented onthe lines and milestones on the nodes. The Figure 7.4 shows a simple example of a PERT diagram.The milestones generally are numbered so that the ending node of an activity has a higher numberthan the beginning node. Incrementing the numbers by 10 allows for new ones to be insertedwithout modifying the numbering of the entire diagram. The activities in the above diagram arelabeled with letters along with the expected time required to complete the activity.

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