House

HouseProject
ProjectCrashing
Crashing
This
Thismodel
modelillustrates
illustrateshow
howRISKOptimizer
RISKOptimizercancanbebeused
usedwith
with@RISK
@RISKProject.
Project.The
Theproject
projectconsists
consistsof
ofbuilding
buildingaahouse,
house,asasind
in
the
theTasks
Taskssheet.
sheet.Resources
Resourceshavehavebeen
beenassigned
assignedto tothe
thetasks
tasksininProject,
Project,as asindicated
indicatedininthe
theResources
Resourcessheet.
sheet.The
Thetask
taskdurati
dura
all
allmodeled
modeledwithwithPert
Pertdistributions,
distributions,using
usingthe
theparameters
parametersininthetheModel
Modelsheet.
sheet.IfIfthe
thedecreases
decreasesinincolumn
columnFFof ofthe
theModel
Models
0,0,as they are now, the project is completed in the "normal" way. If you run the simulation with these values,
as they are now, the project is completed in the "normal" way. If you run the simulation with these values, you should you should
the
themean
meanproject
projectduration
durationisisabout
about133
133days
daysand
andthe
themean
meancostcostisisabout
about$58,000.
$58,000.However,
However,the
theproject
projectduration
durationcan
canbe
be
significantly
significantlylonger
longerbecause
becauseof ofthe
theuncertainty.
uncertainty.For
Forexample,
example,there
thereisisabout
aboutaa40%
40%thatthatthe
theduration
durationwill
willexceed
exceed135
135days.
days
The
Thecontractor
contractorisisunder
underpressure
pressureto tocomplete
completethe thehouse
housequicker.
quicker.To Tododothis,
this,he
hecan
can"crash"
"crash"any
anyof ofthe
thetasks
tasksby
bythe
thenumbe
numbe
inincolumn
columnFFofofthe
theModel
Modelsheet,
sheet,upuptotothe
themaximum
maximuminincolumn
columnH. H.InInthis
thiscase,
case,each
eachof ofthe
thePert
Pertparameters
parametersdecreases
decreasesby byt
amount.
amount.As Asexplained
explainedininthe
thecell
cellcomment
commentinincellcellJ3
J3of
ofthe
theModel
Modelsheet,
sheet,this
thisresults
resultsininaapenalty
penaltycost
costfor
forexpediting.
expediting.InInad
ad
these
thesepenalty
penaltycosts,
costs,there
thereare
arebonuses
bonusesfor forthe
thecontractor
contractorififhe
hefinishes
finishesstage
stage11ofofthe
theproject,
project,and
andboth
bothstages
stagesof
ofthe
theproje
proj
times
timesindicated
indicatedininrows
rows1717and
and1818ofofthe
theModel
Modelsheet.
sheet.Finally,
Finally,the
thecontractor
contractorwants
wantsaa95%95%chance
chanceof ofcompleting
completingthetheproje
proj
135
135working
workingdays.
days.RISKOptimizer
RISKOptimizerhashasbeen
beenset
setupuptotominimize
minimizethe themean
meannetnetextra
extracost
costtotothe
thecontractor
contractor(penalty
(penaltycosts
costsmm
bonuses),
bonuses),subject
subjectto tothe
thedeadline
deadlineconstraint.
constraint.
Two
Twoassumptions
assumptionsof ofthis
thismodel
modelare
arethat
that(1)
(1)the
theadjustable
adjustablecells,
cells,the
thedecreases,
decreases,are
areallowed
allowedtotobe
beany
anydecimal
decimalvalues,
values,and
an
penalty
penaltycosts
costsare
arelinear
linearfunctions
functionsof
ofthe
theadjustable
adjustablecells.
cells.Both
Bothof
ofthese
theseassumptions
assumptionscould
couldbe
berelaxed
relaxedwith
withstraightforward
straightforwar
modifications
modificationsof
ofthe
themodel.
model.
Note:
Note: The
TheIndustrial
Industrialedition
editionisisrequired
requiredto
touse
usethe
theRISKOptimizer
RISKOptimizerand
andProject
Projectfeatures
featuresofof@RISK.
@RISK.
 nsists of
onsists ofbuilding
buildingaahouse,
house,as asindicated
indicatedinin
eResources
Resourcessheet.
sheet.The
Thetask
taskdurations
durationsare
are
eases
easesinincolumn
columnFFof ofthe
theModel
Modelsheet
sheetare
are
n with
on withthese
thesevalues,
values,you
youshould
shouldfind
findthat
that
er, the
ver, theproject
projectduration
durationcan
canbe
be
e duration
he durationwill
willexceed
exceed135
135days.
days.
" any
h" anyofofthe
thetasks
tasksby
bythe
thenumber
numberofofweeks
weeks
e Pert
he Pertparameters
parametersdecreases
decreasesby bythis
this
penalty
penaltycost
costfor
forexpediting.
expediting.InInaddition
additionto
to
oject, and both stages of the project,by
ect, and both stages of the project, bythe
the
%%chance
chanceof ofcompleting
completingthetheproject
projectwithin
within
othe
thecontractor
contractor(penalty
(penaltycosts
costsminus
minus

ededto
tobe
beany
anydecimal
decimalvalues,
values,and
and(2)
(2)the
the
dldbe
berelaxed
relaxedwith
withstraightforward
straightforward

@RISK.
@RISK.
ID Task Name Duration Start Finish

1 Build house 121 days 3/4/2013 8/19/2013

2 Stage 1 89.9 days 3/4/2013 7/5/2013

3 Build foundation 5 wks 3/4/2013 4/3/2013

4 Build walls and ceilings 8 wks 4/3/2013 5/23/2013

5 Build roof 6 wks 5/23/2013 7/5/2013

6 Do electrical wiring 5 wks 5/23/2013 6/26/2013

7 Do plumbing 4 wks 5/23/2013 6/21/2013

8 Stage 2 62.3 days 5/23/2013 8/19/2013

9 Install windows 3 wks 5/23/2013 6/12/2013

10 Install drywall 3 wks 6/12/2013 7/4/2013

11 Put on siding 4 wks 6/12/2013 7/11/2013

12 Paint house 5 wks 7/11/2013 8/19/2013

 Predecessors Resource Names Cost 3/3/13 3/10/13 3/17/13 3/24/13 3/31/13

$53,949.25

$35,777.50

Excavators $6,885.00

3 Builders $7,150.00

4 Roofers $7,800.00

4 Electricians $7,702.50

4 Plumbers $6,240.00

$18,171.75

4 Window installers $2,493.00

9 Drywallers $2,730.00

9 Siding installers $4,758.75

11 Painters $8,190.00
4/7/13 4/14/13 4/21/13 4/28/13 5/5/13 5/12/13 5/19/13 5/26/13 6/2/13
6/9/13 6/16/13 6/23/13 6/30/13 7/7/13 7/14/13 7/21/13 7/28/13 8/4/13
8/11/13 8/18/13 8/25/13 9/1/13 9/8/13 9/15/13 9/22/13 9/29/13 10/6/13
ID Indicators Resource Name Type Material Label
1 Excavators Work
2 Builders Work
3 Roofers Work
4 Electricians Work
5 Plumbers Work
6 Window installers Work
7 Siding installers Work
8 Drywallers Work
9 Painters Work
 Initials Group Max. Units Std. Rate Ovt. Rate Cost/Use
E 100% $300.00 /day $0.00 /hr $0.00
B 100% $200.00 /day $0.00 /hr $0.00
R 100% $250.00 /day $0.00 /hr $0.00
E 100% $325.00 /day $0.00 /hr $0.00
P 100% $300.00 /day $0.00 /hr $0.00
W 100% $180.00 /day $0.00 /hr $0.00
S 100% $225.00 /day $0.00 /hr $0.00
D 100% $175.00 /day $0.00 /hr $0.00
P 100% $300.00 /day $0.00 /hr $0.00
 Accrue At Base Calendar Code
Prorated Standard
Prorated Standard
Prorated Standard
Prorated Standard
Prorated Standard
Prorated Standard
Prorated Standard
Prorated Standard
Prorated Standard
Task duration distribution parameters (Pert)
Build house Minimum Most likely Maximum Decrease Max decrease
Stage 1
Build foundation 4.00 5.00 8.00 0.00 <= 2
Build walls and ceilin 6.00 8.00 12.00 0.00 <= 3
Build roof 5.00 6.00 9.00 0.00 <= 2
Do electrical wiring 4.00 5.00 8.00 0.00 <= 2
Do plumbing 3.00 4.00 6.00 0.00 <= 1
Stage 2
Install windows 2.00 3.00 5.00 0.00 <= 1
Install drywall 2.00 3.00 5.00 0.00 <= 1
Put on siding 3.00 4.00 7.00 0.00 <= 2
Paint house 4.00 5.00 9.00 0.00 <= 2

Bonus parameters Stage 1 Stages 1, 2

Max duration 90 130
Bonus $2,000 $2,500

Bonuses & costs Deadline constraint

Bonus 1 $2,000 Duration Deadline Percentile
Bonus 2 $2,500 121 135 95%
Penalty cost $0
Net cost -$4,500

Cost for completing project $53,949

 Resource cost Penalty cost

$1,500 $2,000
$1,000 $1,500
$1,250 $1,750
$1,625 $2,250
$1,500 $2,000

$900 $1,250
$1,125 $1,500
$875 $1,300
$1,500 $2,000

Summary statistics
P(bonus 1) 1.000
P(bonus 2) 1.000
P(meet deadline) 1.000