0 views

- Gas lift 2
- Managing-Lag-Utilizing-a-Time-Delay-Activity-in-P6.pdf
- US Federal Reserve: 200802pap
- Optimal network reconfiguration of electrical distribution systems
- Problems in Operations Research Principles and Solutions
- 5.Maths and Sci - Ijms -Selection - Paulraj
- 6-1b
- AIAA_2010_Malak_Galvan Manuscript
- Project Mgmt
- Optimization
- Operations Research
- Chap 03 - Project Management
- PM and Engineering Economics
- MB0044
- MC0079 Fall Drive Assignment 2012
- 01-xabaid01
- A Model of Resilient Supply Chain Network Design
- systems eng. & analysis
- Mon 17.30 Predictive Control Down at Plc Level Rossiter
- Optimal Design of Water Distribution Networks Overview

You are on page 1of 43

UNIT III

3.2 Estimating

3.3 Contingency

3.4 Milestones

Models

84

Unit 3

Planning Tools and Techniques

NOTES

for, it is a thing to be achieved - William Jennings Bryan

Operations Research (OR) (a term coined by McClosky and Trefthen in 1940) was a

technique that evolved during World War II to effectively use the limited military

resources and yet achieve the best possible results in military operations. In essence

you can state that OR is a technique that helps achieve best (optimum) results under

the given set of limited resources. Over the years, OR has been adapted and used very

much in the manufacturing sector towards optimization of resources. That is to use

minimum resources to achieve maximum output or profit or revenue

Operations Research (OR) is a science which deals with problem, formulation,

solutions and finally appropriate decision making. This subject is new and started

after World War II, when the failures of missions were very high. Scientists and

technocrats formed team to study the problem arising out of difficult situations and at

the later stage solutions to these problems. It is research designed to determine most

efficient way to do something new.

OR is the use of mathematical models, statistics and algorithm to aid in decision-

making. It is most often used to analyze complex real life problems typically with the

goal of improving or optimizing performance. Decision making is the main activity of

an engineer/manager. Some decisions can be taken by common sense, sound

judgment and experience without using mathematics, and some cases this may not be

possible and use of other techniques is inevitable.

With the growth of technology, the World has seen remarkable changes in the size

and complexity of organizations. An integral part of this had been the division of

85

labour and segmentation of management responsibilities in these organizations. The

results have been remarkable but with this, increasing specialization has created a

new problem to meet out organizational challenges. The allocation of limited

resources to various activities has gained significant importance in the competitive

market. These types of problems need immediate attention which is made possible by

the application of OR techniques. The tools of operations research are not from any

one discipline, rather Mathematics, Statistics, recent years application of OR

techniques have achieved significance in all walk of life, may it be industry or office

NOTES

work for making strategical decisions more scientifically. Economics, Engineering,

Psychology, etc. have contributed to this newer discipline of knowledge. Today, it has

become a professional discipline that deals with the application of scientific methods

for decision-making, and especially to the allocation of scare resources.

Features of operations research

The significant features of operations research include the followings:

(i) Decision-making. Every industrial organization faces multifaceted

problems to identify best possible solution to their problems. OR aims to help the

executives to obtain optimal solution with the use of OR techniques. It also helps the

decision maker to improve his creative and judicious capabilities, analyze and

understand the problem situation leading to better control, better co-ordination, better

systems and finally better decisions.

(ii) Scientific Approach. OR applies scientific methods, techniques and tools

for the purpose of analysis and solution of the complex problems. In this approach

there is no place for guess work and the person bias of the decision maker.

(iii) Inter-disciplinary Team Approach. Basically the industrial problems are

of complex nature and therefore require a team effort to handle it. This team

comprises of scientist/mathematician and technocrats. Who jointly use the OR tools

to obtain a optimal solution of the problem. The tries to analyze the cause and effect

relationship between various parameters of the problem and evaluates the outcome of

various alternative strategies.

(iv) System Approach. The main aim of the system approach is to trace for

each proposal all significant and indirect effects on all sub-system on a system and to

86

evaluate each action in terms of effects for the system as a whole. The

interrelationship and interaction of each sub-system can be handled with the help of

mathematical/analytical models of OR to obtain acceptable solution.

(v) Use of Computers. The models of OR need lot of computation and

therefore, the use of computers becomes necessary. With the use of computers it is

possible to handle complex problems requiring large amount of calculations.

NOTES

The objective of the operations research models is to attempt and to locate best or

optimal solution under the specified conditions. For the above purpose, it is necessary

that a measure of effectiveness has to be defined which must be based on the goals of

the organization. These measures can be used to compare the alternative courses of

action taken during the analysis.

Importance of operations research

The scope of OR is not only confined to any specific agency like defense services but

today it is widely used in all industrial organizations. It can be used to find the best

solution to any problem be it simple or complex. It is useful in every field of human

activities, where optimization of resources is required in the best way. Thus, it

attempts to resolve the conflicts of interest among the components of organization in

a way that is best for the organization as a whole. The main fields where OR is

extensively used are given below, however, this list is not exhaustive but only

illustrative.

(i) National Planning and Budgeting - OR is used for the preparation of Five

Year Plans, annual budgets, forecasting of income and expenditure, scheduling of

major projects of national importance, estimation of GNP, GDP, population,

employment and generation of agriculture yields etc.

(ii) Defense Services - Basically formulation of OR started from USA army,

so it has wide application in the areas such as: development of new technology,

optimization of cost and time, tender evaluation, setting and layouts of defence

projects, assessment of “Threat analysis”, strategy of battle, effective maintenance

and replacement of equipment, inventory control, transportation and supply depots

etc.

87

(iii) Industrial Establishment and Private Sector Units OR can be effectively

used in plant location and setting finance planning, product and process planning,

facility planning and construction, production planning and control, purchasing,

maintenance management and personnel management etc. to name a few.

(iv) R & D and Engineering - Research and development being the heart of

NOTES

technological growth, OR has wide scope for and can be applied in technology

forecasting and evaluation, technology and project management, preparation of tender

and negotiation, value engineering, work/method study and so on.

(v) Business Management and Competition - OR can help in taking business

decisions under risk and uncertainty, capital investment and returns, business strategy

formation, optimum advertisement outlay, optimum sales force and their distribution,

market survey and analysis and market research techniques etc.

(vi) Agriculture and Irrigation - In the area of agriculture and irrigation also

OR can be useful for project management, construction of major dams at minimum

cost, optimum allocation of supply and collection points for fertilizer/seeds and

agriculture outputs and optimum mix of fertilizers for better yield.

(vii) Education and Training - OR can be used for obtaining optimum number

of schools with their locations, optimum mix of students/teacher student ratio,

optimum financial outlay and other relevant information in training of graduates to

meet out the national requirements.

(viii) Transportation - Transportation models of OR can be applied to real life

problems to forecast public transport requirements, optimum routing, forecasting of

income and expenses, project management for railways, railway network distribution,

etc. In the same way it can be useful in the field of communication.

(ix) Home Management and Budgeting - OR can be effectively used for

control of expenses to maximize savings, time management, work study methods for

all related works. Investment of surplus budget, appropriate insurance of life and

properties and estimate of depreciation and optimum premium of insurance etc.

88

3.2 Estimation in operations research

In general solution to an operations research problem will have the following stages.

NOTES

2. Constructing a mathematical model based on the formulation

3. Solving the problem based on the model.

4. Checking whether the solution is optimal and feasible

5. Iterate till optimal and feasible solution is reached.

We have two new terms “optimal” and “feasible”. Optimal means the best possible

solution under the given conditions and feasible means a practical solution. Therefore

optimal and feasible solution means that the suggested solution must be both practical

to implement and the best one under the given conditions. All types of problems in

operations research can be categorized as either MINIMIZING or MAXIMIZING

type. We will focus on MINIMIZING costs, time and distances while we will be

interested in MAXIMIZING revenue, profits and returns. So you must be very careful

in identifying the type of problem while deciding upon the choice of algorithm to

solve the given problem.

Estimating the effort, time, and resources needed to complete project activities is one

of the most challenging tasks that project managers must face. This is because of the

inherent uncertainty associated with many activities. Projects are unique. That is one

of the differences between projects and processes. This uniqueness often creates

uncertainty. Uncertainty because the activity is unique to the project, or the activity is

being accomplished by a resource that is not a practiced expert or the interaction of

this activity with other project activities is unique in this project. All of these can

create problems when estimating effort, time or resources.

89

Uncertainty in one aspect of an estimate leads to uncertainty on the other aspects. If

the effort needed to complete the scope is uncertain - for instance the number of hours

of work needed to complete an analysis - the time and resources needed will be

uncertain. If the timing of when an activity starts or ends is uncertain, the resource

availability and amount of effort required may change. If the resource assigned to an

NOTES

activity is uncertain, the number of hours required to complete the activity and the

timing of the availability of the resource will be uncertain.

However, the good news is that not all project activities are uncertain. In many cases,

the activity is one that is well defined and the organization routinely accomplishes it.

When possible a project team is formed so that an expert is doing the work and the

availability of the expert is predictable. In those cases an accurate estimate can be

quickly generated.

We will discuss three types of activities and what type of estimating approach should

be used with each of them. Those are the Stable Activities, the Dependent Activities,

and the Uncertain Activities. Of course there is a fourth category which is the

unknown activity. These can't be estimated but must be accounted for in the project

reserves. A Traditional or Discovery project often will have a small reserve (or

possibly none at all) - at least for that portion of the project that is approved. Whereas

an Adaptive or Extreme project may need a large reserve. Also, as complexity

increases typically the level of reserve increases since there is a greater possibility of

unrecognized activities.

The techniques will include Analogous, Parametric Modeling, 3 Point Estimate,

Expert Judgment, Published Data Estimates, Vendor Bid Analysis, Reserve Analysis,

Bottom up Analysis, and Simulation. Finally, how to estimate a project when the key

boundary condition is the End Date or the Total Cost of the project and the effort is

tailored to fit this constraint.

Stable Activities

Stable Activities are those that are well understood and predictable. For activities in

this category, the estimating is usually straightforward. One will typically use

90

analogous, expert judgment, a parametric model, or published estimating data for

these types of activities. Based upon the information available to the project team

members, use the appropriate technique and set the estimate.

Dependent Activities

Dependent Activities are those activities where the time or effort is highly dependent NOTES

upon some project attribute or characteristic that is not yet know or knowable at the

time the original estimate is furnished. For instance, the amount of time needed to

complete testing will depend upon whether the test is successful on the first try or

whether a retest is required. For these types of activities, an assumption is made that

will drive the estimated effort, time and resources. This assumption is a risk and

should be tracked on the Risk Register. If the assumption is incorrect, the time or

money required to do the activity may be very different from the estimate. If a

conservative estimate is used, this is a positive risk. If an aggressive estimate is used,

this is a negative risk.

Uncertain Activities

Uncertain Activities are the most difficult to estimate. There is often very little data to

support a precise estimate. In addition, there are many factors that could affect the

estimate so one can't just make one assumption and track that in his risk register. An

example of an Uncertain Activity is a requirements definition task on a Complex

project. There are numerous stakeholders who have different opinions of what is

needed. Getting all of them to agree on the requirements will be an iterative process

with the number of iterations being completely unpredictable. Yet if this task is not

done well, there are likely to be major problems later in the project getting the

stakeholders to agree that the project deliverables have been met. Uncertain Activities

typically are listed in the Risk Register since the timing and cost are impossible to

estimate accurately.

91

Analogous Estimating

activities. This technique uses the experience from previous projects and extrapolates

NOTES

that onto the current project. This technique is appropriate for those cases where the

type of work is similar and the resources doing the work are the same between

projects. Its advantage is that it is quick and, when the conditions are appropriate, it is

usually fairly accurate. The disadvantage is that the organization must have similar

projects for comparison.

formula is developed for estimating the time or resources needed to perform a project

activity. The formula is usually based upon a great deal of historical experience. A

PMO will often develop the parametric model based upon having done lessons

learned on many projects. A classic example from construction projects is the

parametric model for estimating resources and time based upon the number of square

feet of new construction. The advantage of parametric model estimating it is quick

and accurate. The disadvantage is that models don't exist for activities until there is a

large experience base for the activity.

3 Point Estimating

embedded within an estimate. In this technique three estimates are generated for the

project activity using three different sets of assumptions. The first estimate is a best

case or optimistic estimate. The second estimate is a worst case or pessimistic

estimate. The third estimate is between the other two and is the most likely estimate.

The way those estimates are developed is by using one of the other techniques such as

92

Analogous or Parametric Model. However, because of the high degree of uncertainty

due to the risk assumptions, the three estimates are used to create a boundary on

expectations for the activity. A variation on this technique, the PERT analysis, uses a NOTES

weighted average of these estimates to create a PERT estimate. When using this

approach, the most likely estimate is normally what is put in the project plan but the

optimistic and pessimistic estimates are used during the reserve analysis. Also, an

activity that has a great deal of difference between the optimistic and pessimistic

estimates is an uncertain activity and should be tracked in the Risk Register. The

advantage of this technique is that it provides boundaries on expectations. The

disadvantages are that it takes more work - since three estimates must be created not

one - and the most likely is still very much a guess - the actual could be significantly

better or worse.

project. This technique looks to the expert to create an estimate based upon their

understanding of the project requirements. Many, if not most, project estimates are

created in this fashion. The advantage of this is that it is quick and if the expert is

knowledgeable, it is often the most accurate estimate for uncertain activities. The

disadvantages are that you may not have an expert available and even if you do, the

expert often can provide no solid rationale for their estimate beyond, "That's what I

think it will take to do this."

93

Published Data Estimating

Published Data Estimating is an excellent technique for those activities for which

there is published data. In this technique, the activity is compared to the activities for

NOTES

which data exists and the actual cost or durations of the closest comparable activity is

selected from the data and used as the estimate. The advantage of this technique is

that it is very accurate when the project conditions match the conditions under which

the published data was generated. The disadvantages are that data does not exist for

many activities and that the published data that does exist is based upon the

characteristics of the organizations that compiled and published the data - which may

not correspond with your organization's characteristics.

The Vendor Bid Analysis is a technique used when working with suppliers on

uncertain activities. The analysis considers the assumptions the vendor worked with

and does a sensitivity assessment on those assumptions. In addition, for effort that the

buying organization does not have experience with, they can contract with a

consulting firm that has experience to do a "Should Cost" analysis. This "Should

Cost" estimate is compared to the suppliers quote to identify any shortcomings. The

advantage of this technique is that it exposes supplier risk that can be accounted for in

the reserve analysis and it increases the confidence in the supplier's approach. The

disadvantages are that this can take a fair amount of time and if a consultant is used to

create a "Should Cost" it adds to the cost of the project.

Reserve Analysis

considers the level of uncertainty and risk in the project and establishes a reserve pool

94

of time, resources, or possibly performance that can be drawn upon to offset the un

estimated issues that arise.

NOTES

Bottom up Analysis

estimate. This technique requires the project team to decompose the work into very

small work packages. Generally, the smaller the project activity, the easier it is to

estimate because the work scope is very small. All of these estimates of small

activities are added up into subgroups and finally into the project total. The advantage

of this technique is that the estimate is usually more accurate since the work is better

understood. The disadvantage of this technique is that it is very time consuming, and

it may be impossible to decompose activities that cannot be easily defined.

Project Simulation

Reserve Analysis to understand the likely project outcomes. This requires that the

project be entered into a project management software application, being careful to

identify all relationships between activities. For those activities that have uncertainty,

the degree of uncertainty must be modeled and entered into the project management

software also. The method for doing this will vary based upon the software being

used. A simulation add-on is then used to run the software through a Monte Carlo

routine. The result will be a distribution of project time lines and costs. Based upon

the organization's risk sensitivity, the overall project time line and budget can be set.

The advantage of this approach is that it provides a global perspective on overall time

line and cost uncertainty. The disadvantages are that it can take months to do this on a

large project and the resulting estimates are only as good as the assumptions that are

allowed by the software.

95

Estimating Based Upon Project End Date

In some cases, the project end date is set even before the scope and deliverables are

defined. In those cases, a high-level time line is created starting from the end date and

NOTES

going backward to the present time. Given the amount of time allocated for the major

activities, the project team considers the needed deliverables and available resources

during the time period. Essentially, the schedule side of the triangle is fixed and the

scope and resource sides are varied so as to create a viable project. Often this will

require an iterative estimating approach. Once the high level plan is established,

estimates for the activities are developed and then iterations are done varying

resources and scope until a viable estimate can be created. The Risk Register will be

dominated by schedule risk items. Sometimes, an estimate cannot be created. In those

cases, the project should not even be initiated, since it is doomed.

In some cases, the project total cost is set even before the scope and schedule are

defined. In those cases, a high-level allocation of the budget is created between the

likely project deliverables. Each major activity is then estimated and if the estimate is

greater than the allocated cost, the timing of resources or scope and deliverables are

varied until the project is able to meet the budget goals. This is often an iterative

process that may take much iteration until it completes.

3.3 Contingency

When estimating the cost for a project, product or other item or investment, there is

always uncertainty as to the precise content of all items in the estimate, how work

will be performed, what work conditions will be like when the project is executed and

so on. These uncertainties are risks to the project. Some refer to these risks as

"known-unknowns" because the estimator is aware of them, and based on past

96

experience, can even estimate their probable costs. The estimated cost of the known-

unknowns is referred to by cost estimators as cost contingency. Contingency "refers

to costs that will probably occur based on past experience, but with some uncertainty

NOTES

regarding the amount. The term is not used as a catchall to cover ignorance. It is poor

engineering and poor philosophy to make second-rate estimates and then try to satisfy

them by using a large contingency account. The contingency allowance is designed to

cover items of cost which are not known exactly at the time of the estimate but which

will occur on a statistical basis."

The cost contingency which is included in a cost estimate, bid, or budget may be

classified as to its general purpose that is what it is intended to provide for. For a class

1 construction cost estimate, usually needed for a bid estimate, the contingency may

be classified as an estimating and contracting contingency. This is intended to provide

compensation for "estimating accuracy based on quantities assumed or measured,

unanticipated market conditions, scheduling delays and acceleration issues, lack of

bidding competition, subcontractor defaults, and interfacing omissions between

various work categories." Additional classifications of contingency may be included

at various stages of a project's life, including design contingency, or design definition

contingency, or design growth contingency, and change order contingency

AACE International, the Association for the Advancement of Cost Engineering, has

defined contingency as "An amount added to an estimate to allow for items,

conditions, or events for which the state, occurrence, or effect is uncertain and that

experience shows will likely result, in aggregate, in additional costs. Typically

estimated using statistical analysis or judgment based on past asset or project

experience. Contingency usually excludes:

capacities, building sizes, and location of the asset or project

2) Extraordinary events such as major strikes and natural disasters

3) Management reserves

97

4) Escalation and currency effects

Some of the items, conditions, or events for which the state, occurrence, and/or effect

is uncertain include, but are not limited to, planning and estimating errors and

omissions, minor price fluctuations, design developments and changes within the

scope, and variations in market and environmental conditions. Contingency is

NOTES

generally included in most estimates, and is expected to be expended". A key phrase

above is that it is "expected to be expended". In other words, it is an item in an

estimate like any other, and should be estimated and included in every estimate and

every budget. Because management often thinks contingency money is "fat" that is

not needed if a project team does its job well, it is a controversial topic.

In general, there are four classes of methods used to estimate contingency”.These

include the following:

1) Expert judgment

2) Predetermined guidelines (with varying degrees of judgment and

empiricism used)

3) Simulation analysis (primarily risk analysis judgment incorporated in a

simulation such as Monte-Carlo)

4) Parametric Modeling (empirically-based algorithm, usually derived through

regression analysis, with varying degrees of judgment used).

While all are valid methods, the method chosen should be consistent with the first

principles of risk management in that the method must start with risk identification,

and only then are the probable cost of those risks quantified. In best practice, the

quantification will be probabilistic in nature (Monte-Carlo is a common method used

for quantification).

Typically, the method results in a distribution of possible cost outcomes for the

project, product, or other investment. From this distribution, a cost value can be

selected that has the desired probability of having a cost under run or cost overrun.

Usually a value is selected with equal chance of over or under running. The

98

difference between the cost estimate without contingency and the selected cost from

the distribution is contingency. Contingency is included in budgets as a control

account. As risks occur on a project, and money is needed to pay for them, the

NOTES

contingency can be transferred to the appropriate accounts that need it. The transfer

and its reason is recorded. In risk management, risks are continually reassessed during

the course of a project, as are the needs for cost contingency.

A Milestone is a reference point that marks a major event in a project and is used to

monitor the project's progress. The milestones for a project should present a clear

sequence of events that will incrementally build up to the completion of the approved

project. As you complete each milestone, you can update the status from the

Milestones tab of your project.

signify an important decision or the derivation of a critical piece of information,

which outlines or affects the future of a project. In this sense, a milestone not only

signifies distance traveled (key stages in a project) but also indicates direction of

travel since key decisions made at milestones may alter the route through the project

plan.

specific terms for the point at which approval is made regarding starting or continuing

an acquisition to the next phase. Milestones established by DOD Instruction 5000.2

are 'Milestone A' for Technology Development, 'Milestone B' for System

Development and Demonstration, and 'Milestone C' for Production and Deployment.

Program schedules would also have milestones (lower case) reflecting major events

in the system development life cycle (such as System Requirements Review), key

items (such as documents needed for a Request for Proposal), items of external

approval, and project-specific points of accomplishment.

99

3.5 Gantt chart

The basic purpose of a Gantt chart is to break a large project into a series of smaller

tasks in an organized way. The chart shows when each task should begin and how

long it should take. The left-most column lists each of the tasks in chronological order

NOTES

according to their start time. The remaining columns show the timeline (often shown

in weeks, but use whatever units are convenient for your project). For each row, a

task is listed and a line in drawn through the timeline for the weeks during which that

task will be addressed.

Following is a simple example of what a Gantt chart looks like. In this chart, a rough

outline of what tasks are to be accomplished up to the first design review on October

9.

This is not given to show you how you should organize your own teams time so much

as to provide a sample Gantt chart for illustrative purposes. Notice how some tasks

take longer than others, so some weeks have more than one associated task. For

example, on the time period beginning September 18th, the team will be continuing

the information gathering started a week prior and begin shopping around for a

product for the reverse engineering exercise on October 2.

• Information Gathering: user interviews, expert interview, personal

experience, patent search, market research, reverse engineering

100

• Problem Definition: problem statement, characteristics of problem,

characteristics of solution

• Divergence: brainstorming, morphological analysis, functional decomposition

• Transition: Pugh chart, QFD, sketch models, user feedback NOTES

• Convergence: analysis, detailed configuration, optimization, user feedback

• Prototyping: build rough prototype, test rough prototype, plan the build,

collect materials, start machining, physical testing, user testing

• Documentation: proposal, progress report, final report, presentations

3.6 (PERT)

Network Analysis

Routing is the first step in production planning. In small projects, routing is very

simple. Sequence of operations is almost decided and the operations can be

performed one after the other in a given sequence. But in large project, this is rather a

difficult problem. There may be more than one routes to complete a job. The

function of production manager is to find out the path which takes the least time in

completing the project.

In a big project, many activities are performed simultaneously. There are many

activities which can be started only at the completion of other activities. In such

cases a thorough study is required to collect in complete details about the project and

then to find out a new, better and quicker way to get the work done in a decent way.

In such cases, the first step is to draw some suitable diagram showing various

activities and their positions in the project. It should also explain the time to be taken

in completing the route from one operation to the other. It also defines the way in

which the delay in any activity can affect the entire project in terms of both money

and time. Such a diagram is called network diagram. In the words of James L.

Riggs ‘ A network is a picture of a project, a map of requirements tracing the work

from a departure points to the final completion objective. It can be a collection of all

the minute details involved or only a gross outline of general functions.

101

Important Characteristics in a Network Analysis

(i) The objective is to be finished within the specified time otherwise

there is a penalty.

NOTES

(ii) Various activities are to be completed in an order, however, a

number of activities are performed simultaneously while there are man

by other activities which can be started only when some other

activities are completed.

(iii) The cost of any activity is proportional to its time of completion.

(iv) There can be hurdles in the process and the resources to be allocated

may be limited. A network graph consists of a number of points or

nodes, each of which is connected to one or more of the other nodes by

routes or edges. It is a set of operations and activities describing the

time orientation of a composite project.

Slack signifies the freedom for rescheduling or to start the job. It can be calculated

by the difference between EFT and LFT for any job. A job for which the slack time

is zero is known as critical job. The critical path can be located by all those activities

or events for which slack time is either zero or float time is the least. The

abbreviations EFT and LFT given in the above line have the following explanation.

EFT (Earliest Finish Time) This is the sum of the earliest start time plus the time of

duration for any event.

LFT (Latest Finish Time). It is calculated from the LFT of the head event. For its

calculation total project time is required. The total project time is the shortest

possible time required in completing the project.

Floats. Floats in the network analysis represent the difference between the maximum

time available to finish the activity and the time required to complete it. There are so

many activities where the maximum time available to finish the activity is more than

the total time required to complete it. This difference is known as floats.

102

Floats may be total, free, and independent:

A) Total Float. Total float is the maximum amount by which duration time of an

activity can be increased without increasing the total duration time of the project.

NOTES

Total float can be calculated as follows:

(i) First, the difference between Earliest Start Time (EST) of tail event

and Latest Finish Time (LFT) of head event for the activity shall be

calculated.

(ii) Then, substract the duration time of the activity from the value

obtained in (i) above to get the required float for the activity.

The total float can be helpful in drawing the following conclusions:

(a) If total float value is negative, it denotes that the resources for

completing the activity are not adequate and the activity, therefore,

cannot finish in time. So, extra resources or say critical path needs

crashing in order to reduce the negative float.

(b) If the total float value is zero, it means the resources are just sufficient to

complete the activity without any delay.

(c) If the total float value is positive, it points out that total resources

are in excess of the amount required or the resources should be reallocated to avoid

the delay otherwise the activity will be delayed by so much time.

103

(B) Free Float.

It is that the fraction from total float of an activity which can be used for rescheduling

the activity without affecting the succeeding activity. If both tail and head events are

given their earliest times, i.e., EST and EFT the free can be calculated by deducting

NOTES

head slack from total float, i.e.,

Free Float = Total flat – Slack time of the head event.

It is the time by which an activity can be rescheduled without affecting the other

activities – preceding or succeeding. It may be calculated as follows:

= Earliest Start Time (EST) – Earliest Finish Time (EFT) of the activity. Or

Independent float – Free Float – Slack Time of tail event.

The basic difference between slack and float time is that a slack is used with

reference to events whereas float is used with reference to activity.

(i) Total float can affect both the previous and the subsequent activities.

(ii) Total float can be used without affecting the subsequent activities.

(iii) Independent float can be used in allocating the resources elsewhere

and increasing the time of some non-critical activities.

(iv) Negative float signifies reduction in target time to finish the work in

time.

One of the main features of PERT and related techniques is their use of a network or

precedence diagram to depict major project activities and their sequential

relationships. There are two slightly different conventions for constructing these

104

network diagrams. Under one convention, the arrows designate activities; under the

other convention, the nodes designate activities. These conventions are referred to as

activity-on-arrow (AOA) and activity-on-node (AON). Activities consume

NOTES

resources and /or time. The nodes in the AOA approach represent the activities

starting and finishing points, which are called events. Events are points in time.

Unlike activities, they consume neither resources not time. The nodes in an AON

diagram represent activities.

In the AOA diagram, the arrows represent activities and they show the sequence in

which certain activities must be performed (eg., Interview precedes Hire and Train);

in the AON diagram, the arrows show only the sequence in which certain activities

must be performed while the nodes represent the activities. Activities in AOA

networks can be referred to in either of two ways. One is by their endpoints (eg.,

activity 2-4) and the other is by a letter assigned to an arrow (e.g., activity c). Both

methods are illustrated in this chapter. Activities in AON networks are referred to by

a letter (or number) assigned to a node. Although these two approaches are slightly

different, they both show sequential relationships – something Gantt charts don’t.

Note that the AON diagram has a starting node, S, which is actually not an activity

but is added in order to have a single starting node.

Despite these differences, the two conventions are remarkably similar, so you should

not encounter much difficulty in understanding either one. In fact, there are

convincing arguments for having some familiarity with both approaches. Perhaps the

most compelling is that both approaches are widely used. However, any particular

organization would typically use only one approach, and employees would have to

work with that approach. Moreover, a contractor doing work for the organization

may be using the other approach, so employees of the organization who deal with the

contractor on project matters would benefit from knowledge of the other approach

A path is a sequence of activities that leads from the starting node to the ending node.

For example, in the AOA diagram, the sequence 1-2-4-5-6 is a path. In the AON

diagram, S-1-2-6-7 is a path. Note that in both diagrams there are three paths. One

105

reason for the importance of paths is that they reveal sequential relationships. The

importance of sequential relationships cannot be overstated: If one activity in a

sequence is delayed (i.e., late) or done in-correctly, the start of all following activities

on that path will be delayed.

NOTES

Another important aspect of paths is the length of a path: How long will a particular

sequence of activities take to complete? The length (of time) for any path can be

determined by summing the expected times of the activities on that path. The path

with the longest time is of particular interest because it governs project completion

time. In other words, expected project duration equals the expected time of the

longest path. Moreover, if there are any delays along the longest path, there will be

corresponding delays in project completion time. Attempts to shorten project

completion must focus on the longest sequence of activities. Because of its influence

on project completion time, the longest path is referred to as the critical path, and its

activities are referred to as critical activities.

Paths that are shorter than the critical path can experience some delays and still not

affect the overall project completion time as long as the ultimate path time does not

exceed the length of the critical path. The allowable slippage for any path is called

slack, and it reflects the difference between the length of a given path and the length

of the critical path. The critical path, then, has zero slack time.

The critical path analysis is an important tool in production planning and scheduling.

Gnatt charts are also one of the tools of scheduling but they have one disadvantage

for which they are found to be unsuitable. The problem with Gnatt Chart is that the

sequence of operations of a project or the earliest possible date for the completion of

the project as a whole cannot be ascertained. This problem s overcome by this

method of Critical Path Analysis.

106

CPM is used for scheduling special projects where the relationship between the

different parts of projects is more complicated than that of a simple chain of task to be

completed one after the other. This method (CPM) can be used at one extreme for the

very simple job and at other extreme for the most complicated tasks. NOTES

A CPM is a route between two or more operations which minimizes (or maximizes)

some measures of performance. This can also be defined as the sequence of activities

which will require greatest normal time to accomplish. It means that the sequence of

activities which require longest duration are singled out. It is called at critical path

because any delay in performing the activities on this path may cause delay in the

whole project. So, such critical activities should be taken up first.

find the sequence of activities with the largest sum of duration times, and thus find

the minimum time necessary to complete the project. The critical series of activities

is known as the ‘Critical Path’.”

Under CPM, the project is analyzed into different operations or activities and their

relationship are determined and shown on the network diagram. So, first of all a

network diagram is drawn. After this the required time or some other measure of

performance is posted above and to the left of each operation circle. These times are

them combined to develop a schedule which minimizes or maximizes the measure of

performance foe each operation. Thus CPM marks critical activities in a project and

concentrates on them. It is based on the assumption that the expected time is actually

the time taken to complete the object.

The main objects of CPM are

(i) To find the difficulties and obstacles in the course of production process.

(ii) To assign time for each operation.

(iii) To ascertain the starting and finishing times of the work.

107

(iv) To find the critical path and the minimum duration time for the project as

a whole.

Situations where CPM can be effectively used

NOTES

(a) In production planning.

(b) Location of and deliveries from a warehouse.

(c) Road systems and traffic schedules.

(d) Communication network.

Advantages of CPM

(i) It provides an analytical approach to the achievement of project

objectives which are defined clearly.

(ii) It identifies most critical elements and pays more attention to these

activities.

(iii) It assists avoiding waste of time, energy and money on unimportant

activities.

(iv) It provides a standard method for communicating project plans,

schedules and cost.

Thus CPM technique is a very useful analysis in production planning of a very

large project.

There are so many modern techniques that have developed recently for the planning

and control of large projects in various industries especially in defense, chemical and

construction industries. Perhaps, the PERT is the best known of such techniques.

PERT is a time-event network analysis technique designed to watch how the parts of

a program fit together during the passage of time and events. This technique was

108

developed by the special project office of the U.S. Navy in 1958. It involves the

application of network theory to scheduling problems. In PERT we assume that the

expected time of any operation can never be determined exactly.

NOTES

Major Features of PERT or Procedure or Requirement for PERT

(i) All individual tasks should be shown in a network. Events are

shown by circles. Each circle represents an event – an event – a

subsidiary plan whose completion can be measured at a given time.

(ii) Each arrow represents an activity – the time-consuming elements

of a programme, the effort that must be made between events.

(iii) Activity time is the elapsed time required to accomplish an event.

(a) t1 (Optimistic time) : It is the best estimate of time if

everything goes exceptionally well.

(b) t2 (Most likely time) : It is an estimated time what the project

engineer believes necessary to do the job

or it is the time which most often is

required if the activity is repeated a

number of times.

(c) t3 (Pessimistic time) : It is also an activity under adverse

conditions. It is the longest time and

rather is more difficult to ascertain.

The experiences have shown that the best estimator of time out of several estimates

made by the project engineer is:

t1 + 4t2 +t3

t=

6

109

The variance of t is given by: 2

V(t) =

( )

t3 - t1

NOTES

Here it is assumed that the time estimates follow the Beta distribution.

The next step is to compute the critical path and the slack time.

A critical path or critical sequence of activities is one which takes the longest time to

accomplish the work and the least slack time.

Advantages of PERT

PERT is a very important of managerial planning and control at the top concerned

with the overall responsibility of a project. PERT has the following merits.

(i) PERT forces managers and subordinate managers to make a plan for

production because time event analysis is quite impossible without

planning and seeing how the pieces fit together.

(ii) PERT encourages management control by exception. It concentrates

attention on critical elements that may need correction.

(iii) It enables forward-working control as a delay will affect the

succeeding events and possibly the whole project. The production

manager can somehow make up the time by shortening that of some

other event.

(iv) The network system with its sub-systems creates a pressure for action

at the right spot and level and at the right time.

(v) PERT can be effectively used for rescheduling the activities.

110

Limitations in using PERT

(i) It is a time-consuming and expensive technique. NOTES

(ii) It is based on Beta Distribution and the assumption of Beta Distribution

may not always be true.

(iii) PERT is not suitable when program is nebulous and a reasonable estimate

of time schedule is not possible.

(iv) It is not useful for routine planning of recurring events such as mass

production because once a repetitive sequence is clearly worked out,

elaborate and continuing control is not required.

(v) The expected time and the corresponding variance are only estimated

values.

Although these techniques (PERT and CPM) use the same principles and are based

on network analysis yet they in the following respects from each other:

(i) PERT is appropriate where time estimates are uncertain in the duration of

activities as measured by optimistic time, most likely time, and pessimistic

time, whereas CPM (Critical Path Method) is good when time estimates

are found with certainty. CPM assumes that the duration of every activity

is constant and therefore every activity is critical or not.

(ii) PERT is concerned with events which are the beginning or ending points

of operation while CPM is concerned with activities.

(iii) PERT is suitable for non-repetitive projects while CPM is designed for

repetitive projects.

(iv) PERT can be analyzed statistically whereas CPM not.

(v) PERT is not concerned with the relationship between time and cost,

whereas CPM establishes a relationship between time and cost and cost is

proportionate to time.

111

3.8 Linear programming

some situation, and finding the "best" value obtainable under those conditions. A

typical example would be taking the limitations of materials and labor, and then

NOTES

determining the "best" production levels for maximal profits under those conditions.

In "real life", linear programming is part of a very important area of mathematics

called "optimization techniques". This field of study(or at least the applied results of

it) are used every day in the organization and allocation of resources. These "real life"

systems can have dozens or hundreds of variables, or more.

inequalities (called the "constraints") to form a walled-off area on the x,y-plane

(called the "feasibility region"). Then you figure out the coordinates of the corners of

this feasibility region (that is, you find the intersection points of the various pairs of

lines), and test these corner points in the formula (called the "optimization equation")

for which you're trying to find the highest or lowest value.

Formulation of LPP

Elixir paints produces both interior and exterior paints from two raw materials M1

and M2. The following table provides the data. The market survey restricts the market

daily demand of interior paints to 2 tons. Additionally the daily demand for interior

paints cannot exceed that of exterior paints by more than 1 ton. Formulate the LPP.

112

Solution:

The general procedure for formulation of an LPP is as follows

NOTES

1. To identify and name the decision variables.

determined. In this example the quantity (In tons) of exterior (EP) and interior paints

(IP) to be produced under the given constraints to maximize the total profit is to be

found. Therefore the EP and IP are the decision variables. The decision variables EP

and IP can be assigned name such as EP = x1 and IP =x2.

Our objective is to maximize the profits by producing the right quantity of EP and IP.

For every ton of EP produced a profit Rs 5000/- and for every ton of IP a profit of Rs

4000/- is made. This is indicated as 5 and 4 in table 1.1 as profit in thousands of

rupees. We can use the values of 5 and 4 in our objective equation and later multiply

by a factor 1000 in the final answer. Therefore the objective equation is framed as

Max (Z) = 5 x1 + 4 x2. Where x1 and x2 represent the quantities (in tons) of EP and

IP to be produced.

In the problem statement there are constraints relating to the raw materials used and

there are constraints relating to the demand for the exterior and interior paints. Let us

first examine the raw material constraints. There are two types of raw materials used

namely M1 and M2. The maximum availability of M1 every day is given as 24 tons

and the problem (refer table 1.1) states that 6 tons of M1 is required for producing 1

ton of exterior paint. Now the quantity of exterior paint to be produced is denoted as

x1, so if 6 tons of M1 is required for producing 1 ton of exterior paint, to produce x1

tons of exterior paint (6 * x1) tons of M1 is required. Similarly the problem states that

4 tons of M1 is required for producing 1 ton of interior paint. Now the quantity of

interior paint to be produced is denoted as x2, so if 4 tons of M1 is required for

producing 1 ton of interior paint, to produce x2 tons of exterior paint (4 * x2) tons of

113

M1 is required. But the total quantity of M1 used for producing x1 quantity of

exterior paint and x2 quantity of interior paint cannot exceed 24 tons (since that is the

maximum availability). Therefore the constraint equation can be written as 6 x1 +4 x2

< = 24

NOTES

In the same way the constraint equation for the raw material M2 can be framed. At

this point I would suggest that you must try to frame the constraint equation for raw

material M2 on your own and then look into the equation given in the text. To

encourage you to frame this equation on your own I am not exposing the equation

now but am showing this equation in the consolidated solution to the problem.

Well now that you have become confident by framing the second constraint equation

correctly (I am sure you have), let us now look to frame the demand constraints for

the problem. The problem states that the daily demand for interior paints is restricted

to 2 tons. In other words a maximum of 2 tons of interior paint can be sold per day. If

not more than 2 tons of interior paints can be sold in a day, it advisable to limit the

production of interior paints also to a maximum of 2 tons per day (I am sure you

agree with me).

Since the quantity of interior paints produced is denoted by x2, the constraint is now

written as x2 <= 2

Now let us look into the other demand constraint. The problem states that the daily

demand for interior paints cannot exceed that of exterior paints by more than 1 ton.

This constraint has to be understood and interpreted carefully. Read the statement

carefully and understand that the daily demand for interior paints can be greater than

the demand for exterior paints but that difference cannot be more than 1 ton. Again

we can conclude that based on demand it is advisable that if we produce interior

paints more than exterior paints, that difference in tons of production cannot exceed 1

ton. By now you are familiar that the quantities of exterior paint and interior paint

114

produced are denoted by x1 and x2 respectively. Therefore let us frame the constraint

equation as the difference in the quantities of paints produced.

x2 - x1 <=1

In addition to the constraints derived from the statements mentioned in the problem,

NOTES

there is one more standard constraint known as the non-negativity constraint. The

rationale behind this constraint is that the quantities of exterior and interior paints

produced can never be less than zero. That is it is not possible to produce negative

quantity of any commodity. Therefore x1 and x2 must take values of greater than or

equal to zero. This constraint is now written as x1, x2 are > = 0. Thus we have

formulated (that is written in the form of equations) the given statement problem.

The objective equation is Max (Z) = 5 x1 + 4 x2

Subject to the constraints: 6 x1 +4 x2 < = 24

x1 +2 x2 < = 6

x2 <= 2

x2 - x1 <=1

x1, x2 are > = 0 (Non-Negativity constraint). We have successfully formulated the

given statement problem

The transportation model uses the principle of 'transplanting' something, like taking a

hole from one place and inserting it in another without change. First it assumes that to

disturb or change the idea being transported in any way will damage and reduce it

somehow. It also assumes that it is possible to take an idea from one person's mind

into another person's so that the two people will then understand in exactly the same

way. The transportation model is a valuable tool in analyzing and modifying existing

transportation systems or the implementation of new ones. In addition, the model is

effective in determining resource allocation in existing business structures.

115

The model requires a few keys pieces of information, which include the following:

• Origin of the supply

• Destination of the supply

• Unit cost to ship

NOTES

The transportation model can also be used as a comparative tool providing business

decision makers with the information they need to properly balance cost and supply.

The use of this model for capacity planning is similar to the models used by engineers

in the planning of waterways and highways.

This model will help decide what the optimal shipping plan is by determining a

minimum cost for shipping from numerous sources to numerous destinations. This

will help for comparison when identifying alternatives in terms of their impact on the

final cost for a system. The main applications of the transportation model mention in

the chapter are location decisions, production planning, capacity planning and

transshipment. Nonetheless, the major assumptions of the transportation model are

the following :

2. Shipping cost per unit is the same no matter how many units are shipped

3. Only one route is used from place of shipment to the destination

from multiple sources to multiple destinations. A transportation model is used to

determine how to distribute supplies to various destinations while minimizing total

shipping cost. In this case, a shipping plan is produced and is not changed unless

factors such as supply, demand, or unit shipping costs change. The variables in this

model have a linear relationship and therefore, can be put into a transportation table.

The table will have a list of origins and each one's capacity or supply quantity period.

It will also show a list of destinations and their respective demands per period. Also,

it will show the unit cost of shipping goods from each origin to each destination.

116

Transportation costs play an important role in location decision. The transportation

problem involves finding the lowest-cost plan for distributing stocks of goods or

supplies from multiple origins to multiple destinations that demand the goods. The

transportation model can be used to compare location alternatives in terms of their

impact on the total distribution costs for a system. It is subject to demand satisfaction NOTES

at markets supply constraints. It also determines how to allocate the supplies available

form the various factories to the warehouses that stock or demand those goods, in

such a way that total shipping cost is minimized.

Assignment model

The assignment problem is one of the fundamental combinatorial optimization

problems in the branch of optimization or operations research in mathematics. It

consists of finding a maximum weight matching in a weighted bipartite graph. In its

most general form, the problem is as follows:

There are a number of agents and a number of tasks. Any agent can be assigned to

perform any task, incurring some cost that may vary depending on the agent-task

assignment. It is required to perform all tasks by assigning exactly one agent to each

task and exactly one task to each agent in such a way that the total cost of the

assignment is minimized. If the numbers of agents and tasks are equal and the total

cost of the assignment for all tasks is equal to the sum of the costs for each agent (or

the sum of the costs for each task, which is the same thing in this case), then the

problem is called the linear assignment problem. Commonly, when speaking of the

assignment problem without any additional qualification, then the linear assignment

problem is meant.

The Hungarian algorithm is one of many algorithms that have been devised that solve

the linear assignment problem within time bounded by a polynomial expression of the

number of agents. The assignment problem is a special case of the transportation

problem, which is a special case of the minimum cost flow problem, which in turn is

a special case of a linear program. While it is possible to solve any of these problems

117

using the simplex algorithm, each specialization has more efficient algorithms

designed to take advantage of its special structure. If the cost function involves

quadratic inequalities it is called the quadratic assignment problem.

Suppose that a taxi firm has three taxis (the agents) available, and three customers

NOTES

(the tasks) wishing to be picked up as soon as possible. The firm prides itself on

speedy pickups, so for each taxi the "cost" of picking up a particular customer will

depend on the time taken for the taxi to reach the pickup point. The solution to the

assignment problem will be whichever combination of taxis and customers results in

the least total cost. However, the assignment problem can be made rather more

flexible than it first appears. In the above example, suppose that there are four taxis

available, but still only three customers. Then a fourth dummy task can be invented,

perhaps called "sitting still doing nothing", with a cost of 0 for the taxi assigned to it.

The assignment problem can then be solved in the usual way and still give the best

solution to the problem. Similar tricks can be played in order to allow more tasks than

agents, tasks to which multiple agents must be assigned (for instance, a group of more

customers than will fit in one taxi), or maximizing profit rather than minimizing cost.

Queuing Models

Delays and queuing problems are most common features not only in our daily-life

situations such as at a bank or postal office, at a ticketing office, in public

transportation or in a traffic jam but also in more technical environments, such as in

manufacturing, computer networking and telecommunications. They play an essential

role for business process re-engineering purposes in administrative tasks. “Queuing

models provide the analyst with a powerful tool for designing and evaluating the

performance of queuing systems.”

Whenever customers arrive at a service facility, some of them have to wait before

they receive the desired service. It means that the customer has to wait for his/her

turn, may be in a line. Customers arrive at a service facility (sales checkout zone in

ICA) with several queues, each with one server (sales checkout counter). The

118

customers choose a queue of a server according to some mechanism (e.g., shortest

queue or shortest workload). Sometimes, insufficiencies in services also occur due to

an undue wait in service may be because of new employee. Delays in service jobs

beyond their due time may result in losing future business opportunities. Queuing NOTES

theory is the study of waiting in all these various situations. It uses queuing models to

represent the various types of queuing systems that arise in practice. The models

enable finding an appropriate balance between the cost of service and the amount of

waiting.

Single queuing nodes are usually described using Kendall's notation in the form

A/S/C where A describes the time between arrivals to the queue, S the size of jobs

and C the number of servers at the node. Many theorems in queue theory can be

proved by reducing queues to mathematical systems known as Markov chains, first

described by Andrey Markov in his 1906 paper. Agner Krarup Erlang, a Danish

engineer who worked for the Copenhagen Telephone Exchange, published the first

paper on what would now be called queuing theory in 1909. He modeled the number

of telephone calls arriving at an exchange by a Poisson process and solved the M/D/1

queue in 1917 and M/D/k queuing model in 1920. In Kendall's notation M stands for

Markov or memoryless and means arrivals occur according to a Poisson process D

stands for deterministic and means jobs arriving at the queue require a fixed amount

of service k describes the number of servers at the queuing node (k = 1, 2,...).

If there are more jobs at the node than there are servers then jobs will queue and wait

for service. The M/M/1 queue is a simple model where a single server serves jobs that

arrive according to a Poisson process and have exponentially distributed service

requirements. In an M/G/1 queue the G stands for general and indicates an arbitrary

probability distribution. The M/G/1 model was solved by Felix Pollaczek in 1930, a

solution later recast in probabilistic terms by Aleksandr Khinchin and now known as

the Pollaczek–Khinchine formula. After World War II queueing theory became an

area of research interest to mathematicians.

119

Work on queueing theory used in modern packet switching networks was performed

in the early 1960s by Leonard Kleinrock. It was in this period that John Little gave a

proof of the formula which now bears his name: Little's law. In 1961 John Kingman

gave a formula for the mean waiting time in a G/G/1 queue: Kingman's formula. The

matrix geometric method and matrix analytic methods have allowed queues with

NOTES

phase-type distributed inter arrival and service time distributions to be considered.

Problems such as performance metrics for the M/G/k queue remain an open problem.

There are two types of multi channel problems. The first type occurs when the system

has more service centers, and the queues to every of them are isolated and an element

cannot pass from one queue to the other. The second type of waiting-queue problem

is said to be of multiple exponential channels or of several service channels in

parallel, when the element in queue can be served equally well by more than one

station.

The queuing problems in multi-channel problems should be considered rather as

several problems of the single-channel type. Fig. 1 illustrates a valid case; the

formation of each queue is independent from the others. When an element has

selected the concrete queue, it becomes part of the single-channel system.

The probability of the arrivals in queue A is independent from the probability of the

arrivals in queue B (and C) due to different characteristics of the routes. On the other

hand, in multiple exponential channels type each one of the stations can deliver the

120

same type of service and is equipped with the same type of facilities. The element

which selects one station makes this decision without any external pressure from

anywhere. Due to this fact, the queue is single. The single queue (line) usually breaks

into smaller queues in front of each station. Fig. 2 schematically shows the case of a

single line (which has its mean rate ) that randomly scatters itself toward four NOTES

stations (S = 4), each of which has an equal mean service rate

time consuming to conduct real study or experiment to know more about situation or

problem. The available analytical methods cannot be used in all situations due to

large number of variables or large number of interrelationships among the variables

and the complexity of relationship; it is not possible to develop an analytical model

representing the real situation. Some times, even building of model is possible but its

solution may not be possible.

Under such situations simulation is used. It should be noted that simulation does not

solve the problem by itself, but it only generates the required information or data

needed for decision problem or decision-making.

Simulation modeling is the process of creating and analyzing a digital prototype of a

physical model to predict its performance in the real world. Simulation modeling is

121

used to help designers and engineers understand whether, under what conditions, and

in which ways a part could fail and what loads it can withstand. Simulation modeling

can also help predict fluid flow and heat transfer patterns.

NOTES

multiple physical prototypes to analyze designs for new or existing parts. Before

creating the physical prototype, users can virtually investigate many digital

prototypes. Using the technique, they can:

• Select materials that meet weight, strength, and budget requirements

• Simulate part failure and identify the loading conditions that cause them

• Assess extreme environmental conditions or loads not easily tested on

physical prototypes, such as earthquake shock load

• Verify hand calculations

• Validate the likely safety and survival of a physical prototype before testing’s

experiment, and performing simulation analysis are:

Step 2. Formulate the problem.

Step 3. Collect and process real system data.

Step 4. Formulate and develop a model.

Step 5. Validate the model.

Step 6. Document model for future use.

Step 7. Select appropriate experimental design.

Step 8. Establish experimental conditions for runs.

Step 9. Perform simulation runs.

Step 10. Interpret and present results.

Step 11. Recommend further course of action.

122

Although this is a logical ordering of steps in a simulation study, much iteration at

various sub-stages may be required before the objectives of a simulation study are

achieved. Not all the steps may be possible and/or required. On the other hand,

additional steps may have to be performed. The next three sections describe these NOTES

steps in detail.

no degree of randomness, and consist mostly of equations, for example difference

equations. These simulations have known inputs and they results in a unique set of

outputs. In opposite we know stochastic (probability) simulation, which include

random variables. Simulation is a process of imitation or generating reality or things

that we cannot, or for some reasons didn’t accomplish in the real world. Simulation is

an indispensable problem-solving methodology for the solution of many real-world

problems. Deterministic simulation models are usually designed to capture some

underlying mechanism or natural process.

They are different from statistical models (for example linear regression) whose aim

is to empirically estimate the relationships between variables. The deterministic

model is viewed as a useful approximation of reality that is easier to build and

interpret than a stochastic model. However, such models can be extremely

complicated with large numbers of inputs and outputs, and therefore are often

noninvertible; a fixed single set of outputs can be generated by multiple sets of inputs.

Thus taking reliable account of parameter and model uncertainty is crucial, perhaps

even more so than for standard statistical models, yet this is an area that has received

little attention from statisticians.

123

Probabilistic simulation

specifying inputs as probability distributions. If the inputs describing a system are

uncertain, the prediction of future performance is necessarily uncertain. That is, the

NOTES

result of any analysis based on inputs represented by probability distributions is itself

a probability distribution.

qualified statement ("if we build the dam, the salmon population could go extinct"),

the result of a probabilistic simulation of such a system is a quantified probability ("if

we build the dam, there is a 20% chance that the salmon population will go extinct").

Such a result (jn this case, quantifying the risk of extinction) is typically much more

useful to decision-makers who might utilize the simulation results.

necessary to propagate (translate) the input uncertainties into uncertainties in the

results. A variety of methods exist for propagating uncertainty. One common

technique for propagating the uncertainty in the various aspects of a system to the

predicted performance (and the one used by GoldSim) is Monte Carlo simulation.

In Monte Carlo simulation, the entire system is simulated a large number (e.g., 1000)

of times. Each simulation is equally likely, and is referred to as a realization of the

system. For each realization, all of the uncertain parameters are sampled (i.e., a single

random value is selected from the specified distribution describing each parameter).

The system is then simulated through time (given the particular set of input

parameters) such that the performance of the system can be computed. This results in

a large number of separate and independent results, each representing a possible

“future” for the system (i.e., one possible path the system may follow through time).

The results of the independent system realizations are assembled into probability

distributions of possible outcomes.

124

3.11 Dynamic programming

programming is a method for solving complex problems by breaking them down into NOTES

simpler sub problems. It is applicable to problems exhibiting the properties of

overlapping sub problems and optimal substructure (described below). When

applicable, the method takes far less time than naive methods that don't take

advantage of the sub problem overlap (like depth-first search).

The idea behind dynamic programming is quite simple. In general, to solve a given

problem, we need to solve different parts of the problem (sub problems), then

combine the solutions of the sub problems to reach an overall solution. Often when

using a more naive method, many of the sub problems are generated and solved many

times. The dynamic programming approach seeks to solve each sub problem only

once, thus reducing the number of computations: once the solution to a given sub

problem has been computed, it is stored or "memorized": the next time the same

solution is needed, it is simply looked up. This approach is especially useful when the

number of repeating subproblems grows exponentially as a function of the size of the

input.

Dynamic programming algorithms are used for optimization (for example, finding the

shortest path between two points, or the fastest way to multiply many matrices). A

dynamic programming algorithm will examine all possible ways to solve the problem

and will pick the best solution. Therefore, we can roughly think of dynamic

programming as an intelligent, brute-force method that enables us to go through all

possible solutions to pick the best one. If the scope of the problem is such that going

through all possible solutions is possible and fast enough, dynamic programming

guarantees finding the optimal solution. The alternatives are many, such as using a

greedy algorithm, which picks the best possible choice "at any possible branch in the

road". While a greedy algorithm does not guarantee the optimal solution, it is faster.

125

Fortunately, some greedy algorithms (such as minimum spanning trees) are proven to

lead to the optimal solution.

For example, let's say that you have to get from point A to point B as fast as possible,

NOTES in a given city, during rush hour. A dynamic programming algorithm will look into

the entire traffic report, looking into all possible combinations of roads you might

take, and will only then tell you which way is the fastest. Of course, you might have

to wait for a while until the algorithm finishes, and only then can you start driving.

The path you will take will be the fastest one (assuming that nothing changed in the

external environment).

On the other hand, a greedy algorithm will start you driving immediately and will

pick the road that looks the fastest at every intersection. As you can imagine, this

strategy might not lead to the fastest arrival time, since you might take some "easy"

streets and then find yourself hopelessly stuck in a traffic jam.

in an optimal dynamic programming solution, however many problems require more

sophisticated dynamic programming algorithms. Some of these may be recursive as

well but parameterized differently from the naive solution. Others can be more

complicated and cannot be implemented as a recursive function with memorization.

1) State the importance of milestones in project management

2) Explain the significance of GANTT chart.

3) What is linear programming?

4) Why is PERT and CPM important for project management?

126

- Managing-Lag-Utilizing-a-Time-Delay-Activity-in-P6.pdfUploaded byNadim Jilani
- US Federal Reserve: 200802papUploaded byThe Fed
- Optimal network reconfiguration of electrical distribution systemsUploaded byapi-3697505
- 6-1bUploaded byyuyu2k
- Gas lift 2Uploaded byMaryam Rezaei
- Problems in Operations Research Principles and SolutionsUploaded byQais
- AIAA_2010_Malak_Galvan ManuscriptUploaded bye_galvan
- Project MgmtUploaded bypal198810
- 5.Maths and Sci - Ijms -Selection - PaulrajUploaded byiaset123
- OptimizationUploaded bySubodh Kumar
- Operations ResearchUploaded byGokul Chandrappa
- Chap 03 - Project ManagementUploaded bySahir Khan
- PM and Engineering EconomicsUploaded bysonygabriel
- MB0044Uploaded byprasadamin
- MC0079 Fall Drive Assignment 2012Uploaded bySneha Latha
- 01-xabaid01Uploaded bylrdseeker
- A Model of Resilient Supply Chain Network DesignUploaded bySiddiqi
- systems eng. & analysisUploaded byKhairunnisaSalsabila
- Mon 17.30 Predictive Control Down at Plc Level RossiterUploaded byquinteroudina
- Optimal Design of Water Distribution Networks OverviewUploaded byIman Saberi
- 32 Ch1 QuestionsUploaded byChloe Tham
- Binder1 74.pdfUploaded byAbdul Rahman
- g.txtUploaded byIvan Kokorin
- buffer allocation problemUploaded byDocente Fede Tecnologico
- 10.1061@ASCECP.1943-5487.0000666Uploaded bysadjad azizi
- Solved Problem - Critical Path MethodUploaded byDarshan Mudanahalli
- Inventory Decisions in Dell's Supply Chain Interfaces 2004Uploaded byAaron Martin
- ACP 2016 V2 WhichissentfinallyUploaded byAmina Ben
- Cable Tension Op Tim IzationUploaded byDipak Borsaikia
- 2008 Linear Programming Bounds University Bordeaux.pdfUploaded bydanut89

- Health Care MktgUploaded bynicevenu
- Hospital AccountingUploaded bynicevenu
- Hospital Acc FrontUploaded bynicevenu
- Human AnatomyUploaded bynicevenu
- Health Prgrm Mgt Unit 1Uploaded bynicevenu
- Human Anatomy FrontUploaded bynicevenu
- Pmob Re ReviewUploaded bynicevenu
- unit 5Uploaded bynicevenu
- unit 4Uploaded bynicevenu
- unit 3Uploaded bynicevenu
- unit 2Uploaded bynicevenu
- unit 1Uploaded bynicevenu
- Hrm Hospital Unit 1Uploaded bynicevenu
- Hrm Hospital Front FrontUploaded bynicevenu
- UNIT VUploaded bynicevenu
- Health Prgrm Mgt Unit 4Uploaded bynicevenu
- UNIT IIIUploaded bynicevenu
- UNIT IIUploaded bynicevenu
- health prgrm mgt front.docUploaded bynicevenu
- Health Marketing and Public Relations FrontUploaded bynicevenu

- Sensitivity-Based Reactive Power ControlUploaded byjhongeralpe
- Modern Optimization Techniques in Power SystemsUploaded bykannanchammy
- RLshits.docxUploaded byAndengg Dalisay
- Studying Complex Adaptive Systems John h. HollanUploaded byAlessandro Cerboni
- PS2-GE_Opt-QsUploaded bynitchie
- Convex Optimization for Machine LearningUploaded byratnadeepbimtac
- Dynamic Feed ControlUploaded bynitinhadpe
- 4 Optimization of Wind Turbine Blades Using Genetic AlgorithmUploaded bymirak_ma
- Eprl PublicationsUploaded byEmman Joshua Busto
- MMS SYLLABUSUploaded byraj4mather
- A Geometric Method for Kinematics of Delta Robot and its Path Tracking Control.pdfUploaded byJameszouqun
- M.tech Final Sylabus BokkUploaded bystalinrajesh143
- Process Systems Engineering a Retrospective View With Question for the Future SARGENT 2004Uploaded byAndreita Camacho
- Linear Programming FormulationUploaded byusmani.yusuf
- gas liftUploaded byari
- RtoUploaded byjmacias1962
- Intro FormulationUploaded byTushar Gupta
- Managerial EconomicsUploaded bymailme_add1234
- 1-s2.0-S2352864815000577-mainUploaded bySarindran Ramayes
- Chapter 1. 1D Plasticity Models v1.0Uploaded byCarlos Agelet De Saracibar
- TRADING SYSTEM LAB Product Guide Version 1Uploaded bymonty-sen-8771
- International Refereed Journal of Engineering and Science (IRJES)Uploaded bywww.irjes.com
- Linear%20Programming-1 (1).pptUploaded byCarlos Williamson
- BinUploaded bysaeed
- Chapter 1 the Game of ChessUploaded byendoftimes2
- APPLICATIONS OF ARTIFICIAL IMMUNE SYSTEM: A REVIEWUploaded byijfcstjournal
- Camacho Et Al-2015-Optimal Control Applications and MethodsUploaded byEvans Ejegi
- Allocation of Agricultural Land to the Major Crops of Saline Track by Linear Programming Approach a Case StudyUploaded byIJSTR Research Publication
- Phase Stability Analysis of Liquid Liquid EquilibriumUploaded byJosemarPereiradaSilva
- Application of Simplex MethodUploaded byiabureid7460

## Much more than documents.

Discover everything Scribd has to offer, including books and audiobooks from major publishers.

Cancel anytime.