PTL PM

1. What is meant by CPM?

The Critical Path method is a mathematically based algorithm for scheduling a set of project activities. It is an important tool
effective project management. Used in forms of projects including construction, research, plant maintenance.
2. What is meant by Uncertainty? List the ways of managing uncertainty.
Uncertainty : Quantification of the doubt about the measurement result.
Ways of Managing Uncertainty:
 Account for variation during project planning.
 Autonomy must balance with organizational discipline
 Companies must cut ruthless projects
 Managers must be flexble.
3. Explain Risk Management.
Risk Management is the greatest loss and greatest probability of occurring are handled first and risks with lower loss
are handled in descending order.

4. Outline the concept of Gantt Charts.

A Gantt chart is a horizontal bar chart developed as a production control tool in 1917 by Henry L. Gantt, an American engineer a
social scientist. Frequently used in project management, a Gantt chart provides a graphical illustration of a schedule that helps
plan, coordinate, and track specific tasks in a project.

5. List the steps in CPM.

 Define the required tasks and put them down in sequenced ordered list.
 Create a flowchart or other diagram showing each task in relation to others.
 Identify the critical and non critical relationship among tasks
 Determine the expected completion or execution time for each task.
 Locate or devise alternatives(back up) for the most critical paths.
6. What is meant by PERT?
A PERT chart is a project management tool used to schedule, organize, and coordinate tasks within a project. PERT
stands for Program Evaluation Review Technique, a methodology developed by the U.S. Navy in the 1950s to manage
the Polaris submarine missile program.
7. Explain Linear Programming.
Linear programming method is a type of constrained optimization method of project
selection. In this method, you look towards reducing the project cost by efficiently
reducing the duration of the project.
8.. What are the differences between Linear and Parallel Activities?
Linear programming:
 Linear programming method is a type of constrained optimization
method of project selection.The crash time of the activity enables you to reduce the activity time or
the project as a whole.
Parallel Activity:
Two or more tasks that can be performed simultaneously, without affecting the performance of the either one.
Operating parallel project tasks allows a project team to complete multiple steps at once and deliver a comple
assignment within a short time frame.
9. How would you explain Cost Estimate?
Cost estimate is the approximation of the cost of a program,project or projection.The cost estimate is the
product of the cost estimating process. The cost estimate has a single total value and may have identifiable
component values.
10. List the steps in preparing your project budget.
Define a Project,Collecting Budget Plan,Consolidating the data,Adding Intangiables.
11. Explain Budget Uncertainty?
Uncertainty is the quantification of doubt about the measurement result. The uncertainty budget is an aid for
specifying the expanded measurement uncertainty.
The individual measurement uncertainty factors are summarised, usually in tabular form, in the measurement
uncertainty budget.
12. Define Chaos.
Whereas projects subject to unforeseen uncertainty start out with reasonably stable assumptions and goals, projects
subject to chaos do not.
13. What is meant by Project Simulation?
Project Simulation is the imitation of the operation of a real world process or system over time. Simulation can
be used to show the eventual real effects of alternative conditions and courses of action.It requires a model be
developed and model represents the key charactertistics or functions of selected physical or abstract system.
14. Explain the term Scheduling.
Scheduling is the process of deciding how to commit resources between a variety of possible tasks. Time can
be specified or floating as a part of a sequence of events.
15. Why is Field Expediting required?
Field expediting means inspection and control of the expeditor on site. This gives client a comprehensive
review of exact current status of their order and an educated projection of future planning and status.
16. Define Crashing.
Shortest possible time for which an activity can be schedule.It is achieved by shifting more resources towards
the completion of that activity, resulting on decreased activity.
17. How do you allocate Scare Resources?
Land,Labor,Capital are the “Scare resources”.Allocation of resources is a central theme in econonmics and
essential study of how resources are allocated and is associated with economic efficiency and maximization of
utility.
18. What is the objectives of Goldratt's Critical Chain?
a.Identify the bottleneck of the system
b. Exploit Bottleneck by changing process
c. Subordinate: Subordiante the through put of all other work centres to the work
centre
d. Elevate: Invest in work centre-to increase its throughput
e. Inertia: start the process over on line to determine the new bottleneck
 PART- B

1. WORK BREAKDOWN STRUCTURE HELPS IN PROJECT PLANNING STATE THE

IMPORTANT CONSIDERATIONS IN DRAFTING A WBS

 WBS forces the team to create detailed steps

 groundwork for schedule and budget
 WBS creates accountability
 WBS creation breeds commitment
 The work-breakdown structure provides a common framework for the natural development of the
overall planning and control of a contract and is the basis for dividing work into definable
increments from which the statement of work can be developed and technical, schedule, cost, and
labor hour reporting can be established.
 A work breakdown structure permits summing of subordinate costs for tasks, materials, etc., into
their successively higher level "parent" tasks, materials, etc.
 For each element of the work breakdown structure, a description of the task to be performed is
generated. This technique (sometimes called a system breakdown structure[6]) is used to define and
organize the total scopeof a project.
 The WBS is organized around the primary products of the project (or planned outcomes) instead of
the work needed to produce the products (planned actions). Since the planned outcomes are the
desired ends of the project, they form a relatively stable set of categories in which the costs of the
planned actions needed to achieve them can be collected.
 A well-designed WBS makes it easy to assign each project activity to one and only one terminal
element of the WBS.
 Rules
o First :100 percent rule
 Breakdown structure should include 100 percent of the goal oriented work required by
the project.
 WBS should focus on outcome of the project
 Structure should strive to include only mutually exclusive elements in the tree.

o The WBS provides a common framework for natural development of overall planning and
control of a contract and basis for dividing work into definable increments from which the
statement of work can be developed and technical , schedule, cost and labor hour reporting can
be established.
o A WBS breakdown structure permits summing of subordinate costs for tasks,materials,etc.
o For each element of WBS ,description of the task to be performed is generated.(This Technique
is used to define and organize the total scope of a project.
o WBS is organized around the primary products of the project instead of the work needed to
produce the products planned actions.
o Since planned outcomes are desired ends of the project,they form a relatively stable set of
categories in which the costs of planned actions needed to achieve them can be collected.
o A well designed WBS makes it easy to assign each project activity to one and only one terminal
element of the WBS.
o WBS helps map requirements from one level of system specification to another .


The figure on the left shows a work breakdown structure construction technique that demonstrates the
100% rule and the "progressive elaboration" technique.
 At WBS Level 1 it shows 100 units of work as the total scope of a project to design and build a
custom bicycle. At WBS Level 2, the 100 units are divided into seven elements. The number of
units allocated to each element of work can be based on effort or cost; it is not an estimate of task
duration.
 The three largest elements of WBS Level 2 are further subdivided at Level 3. The two largest
elements at Level 3 each represent only 17% of the total scope of the project.
 These larger elements could be further subdivided using the progressive elaboration technique
described above.
 WBS design can be supported by software (e.g. a spreadsheet) to allow automatic rolling up of
point values. Estimates of effort or cost can be developed through discussions among project team
members. This collaborative technique builds greater insight into scope definitions, underlying
assumptions, and consensus regarding the level of granularity required to manage the projects.

WBS Numbering

WBS elements are usually numbered, and the numbering system may be arranged any way you choose.
The conventional numbering system is shown in the figure. The shaded box shown in the above slide could
be numbered 1.2.2.3, which would tell you it was in the second box in level 2, the second box in level 3,
and the third box in level 4.

WBS Dictionary
  The WBS dictionary describes what is in each WBS element, and it may also say what is not in an
element, if that is unclear. Here is a sample of a WBS dictionary description:

WBS Element 1.5.4.5. - Systems Integration Test Equipment Planning - This element includes the effort to
identify requirements and specify types and quantities of test equipment needed to support the System
Integration and Test process. It does not include the design or procurement of such equipment, which is
covered in Element 1.5.4.6.

Mapping WBS for Cost Management

 In a product-oriented WBS, functional categories of work may form "cost accounts" within a WBS
element.
 Cost account managers are responsible for a functional area’s contribution to a WBS element. Cost
accounts from several departments or functions may combine into one WBS element.
 Internal department planning for a cost account will be made up of individual work packages.
 A work package will typically have its own budget and schedule.
 Work packages should be small enough to be executed by individuals or small groups in a single
department, and they should be of relatively short schedule duration.
 A small project might define a maximum work package size as two weeks of effort. Larger projects
will assemble larger work packages that can be appropriately managed and controlled.

The project manager will have to decide to what degree employment of various details of WBS
implementation will benefit the efficient management of the project.

On a very small project, a formal WBS may serve no useful purpose, but it can become valuable if project
size or complexity start to increase.

STATE THE IMPORTANT CONSIDERATIONS IN DRAFTING A WBS

IMPORTANT CONSIDERATIONS-WBS

Each discrete work package (individual elements of the WBS given to a person or organisation to do and be responsible
for) should have:

1. summary and detailed description;

2. the inputs that are required (to do the work of the work package);
 3. the major tasks to be done;
4. estimates of resources by task;
5. any outputs that will be produced (e.g. specifications etc, including quantities where relevant);
6. any deliverables that will be produced;
7. standards etc that must be employed or complied with;
8. assumptions and risks.
It should be fundamental to:

 defining and capturing the unique scope of any project;

 organising responsibilities around discrete packages of work;
 improving estimating and planning of projects;
 providing the ideal structure for developing and managing project budgets; and
finally
 a product based WBS is the ideal structure upon which to base an earned value
management process/system.
2. Mention the Concept of Risk Management Framework and various Process groups
in Risk Management, along with Risk Mitigation

Risk Management Framework Process

Risk Management is a critical and continuous process, and appropriate Risk Assessments
should be undertaken, reviewed and managed throughout the Procurement Journey.

 Risks and issues identified should be documented in a Risk & Issue Register.
 All risks and issues should have clear mitigating actions, appropriate owners and a
review date. Risks and issues may be fed into a central organisational risk register so
that any overlap can be recognised.
Risks & Issues
A risk can be defined as an uncertain outcome (either positive or negative) that may
affect the course of a procurement exercise at a future date.

According to standard ISO 31000 “Risk Management-Principles and guidelines on implementation:, the
process of risk management consists of several steps as follows:
Establishing the context:
This involves:
1. Identification of risk in a selected domain of interest
2. Planning the remainder of the process.
a. the social scope of risk management
b. the identity and objectives of stakeholders
c. the basis upon which risks will be evaluated, constraints.
3. defining a framework for the activity and an agenda for identification
4. developing an analysis of risks involved in the process
5. mitigation or solution of risks using available technological, human and organizational resources

RISK MANAGEMENT PROCESS

Risk management is a planned and systematic process consisting of 4 defined stages:

 1.RISK IDENTIFICATION
The initial identification of risks and issues with the potential to impact on the objectives of
a given procurement exercise is essential in terms of understanding.

Sources of risk can be divided into four categories:

 Strategic/Corporate
 Programme
 Project
 Operations
Many risks will be generic across all procurement exercises conducted by an organisation
however there will also be project specific risks that you must consider.
Once risks are identified they should be documented in the risk register as detailed above.

Risks are about events that, when triggered, cause problems or benefits. Hence, risk identification can
start with the source of our problems and those of our competitors (benefit), or with the problem itself.
 Source analysis – Risk sources may be internal or external to the system that is the target of risk
management (use mitigation instead of management since by its own definition risk deals with factors of
decision-making that cannot be managed).
Examples of risk sources are: stakeholders of a project, employees of a company or the weather over an
airport.
 Problem analysis– Risks are related to identified threats. For example: the threat of losing money, the
threat of abuse of confidential information or the threat of human errors, accidents and casualties. The
threats may exist with various entities, most important with shareholders, customers and legislative bodies
such as the government.
Common risk identification methods are:
 Objectives-based risk identification– Organizations and project teams have objectives. Any event that may
endanger achieving an objective partly or completely is identified as risk.
 Scenario-based risk identification – In scenario analysis different scenarios are created. The scenarios may
be the alternative ways to achieve an objective, or an analysis of the interaction of forces in, for example, a
market or battle.
 Taxonomy-based risk identification – The taxonomy in taxonomy-based risk identification is a breakdown of
possible risk sources. Based on the taxonomy and knowledge of best practices, a questionnaire is
compiled. The answers to the questions reveal risks.
 Common-risk checking ] – In several industries, lists with known risks are available. Each risk in the list can
be checked for application to a particular situation.
 Risk charting – This method combines the above approaches by listing resources at risk, threats to those
resources, modifying factors which may increase or decrease the risk and consequences it is wished to
avoid. Creating a matrix under these headings enables a variety of approaches. One can begin with
resources and consider the threats they are exposed to and the consequences of each. Alternatively one
can start with the threats and examine which resources they would affect, or one can begin with the
consequences and determine which combination of threats and resources would be involved to bring them
about.

2.RISK ASSESSMENT
The purpose of risk assessment is to assess the probability of risks occurring and their
potential impact.

Probability (or likelihood) Impact

The evaluated chance of a particular outcome
actually happening (including a consideration of
the frequency with which the outcome may
arise).
The evaluated effect or result of a particular
outcome actually happening (usually
considered in terms of effect in cost,
schedulingand
quality).

The risk assessment can be assisted by using a risk probability framework. Example
criteria for assessing probabilityand impactare also available to help with this stage of
the Risk Management process.
3. RISK CONTROL:
Control
 Once risks have been identified and assessed they must be addressed and
controlled.
 The response must be proportionate to the level of the risk that will have been
determined as part of the risk assessment.
 The table suggests four types of response that may be used to address risks at
different levels.
Tolerate
 Risks should only be tolerated if the result of their assessment is low or very
low.
 The cost of taking an action may be disproportionate to the potential benefit
gained. This does not mean no action should be taken at all.
 You should continue to monitor the risk and note any changes in the situation
that may result in an increased level of risk.
Treat

 The purpose of 'treating' a risk is to reduce the risk to an acceptable level for
the organisation. It is likely that a large number of risks will belong to this
category.
 There are many courses of action an organisation could take to 'treat'risks.

Transfer

 Before deciding to transfer a risk to a third party, you should consider who is best
placed to manage the risk.
 It may be that the risk is best managed internally within your organisation.
 It is also possible that transferring risk to a supplier will result in a significant
cost to your organisation and this should be considered before taking this course
of action.
 Also remember that whilst you can transfer responsibility for an action, you
cannot transfer accountability.

Review & Rethink Strategy

 If the assessed level of a risk is very high, you may need to reconsider your
approach.
 In some circumstances it may be necessary to stop the current course of action
and start over.
 It should be noted that the option to terminate activities should be exercised as a
 last resort, where other courses of actions have not mitigated the risk to an
acceptable level.

4. RISK MONITORING
 One of the most common approaches to monitoring risks is the use of a risk
register.
 The risk register should be set up at the start of the project and reviewed at each
stage of the procurement and contract management process e.g. Strategy, ESPD,
ITT, Contract Award, and Contract Review Meetings.

Risk monitoring should be a continuous process.

A risk register should contain the following information as a minimum:

 Risk identification number

 Risk Owner
 Description of Risk
 Results of assessment (Probability/Impact) and date of assessment
 Mitigating Actions - what are you going do to address the risk
 Date when the risks will next be reviewed

The ownership of risk must be clearly defined within the risk register and agreed with the individual
owners. This will ensure understanding of roles,responsibilities and ultimate accountability. Individual
owners should have the capability, authority and experience to deal with risk/s allocated to them.
The risk mitigation step involves development of mitigation plans designed to manage, eliminate, or reduce
risk to an acceptable level. Once a plan is implemented, it is continually monitored to assess its efficacy
with the intent of revising the courseof-action if needed.

VARIOUS PROCESS GROUPS-RISK MANAGEMENT

RISK AVOIDANCE:
This includes not performing an activity that could carry risk.
Example :
 Not buying a property /business in order to not take on legal liability that comes with it.
 Not flying inorder not to take the risk that airplanes were to be hijacked.
 Avoidance- may be answer to risks but potential gain that accepting retaining the risk may have allowed.
 Not entering a business to avoid risk of loss also avoids profitability of earning profits.
HAZARD PREVENTION:
 refers to prevention of risks in an emergency.
  Elimination of hazard is main thing, if it takes too long it it too costly.
RISK REDUCTION:
 Reducing severity of loss or the likelihood of loss from occurring.
 Examples: sprinklers are designed to put out a fire to reduce the risk of loss by fire.
 This methods may cause greater loss by water damage and therefore may not be suitable.
 Acknowledging in risk can be positive or negative, optimization risks means finding balance between
negative risk and benefit of operation or activity, between risk reduction and effort applied.
 Modern software development methodologies reduce risk by developing and delivering software
incrementally .
 Outsourcing could be an example of risk reduction if the out sourcer can demonstrate higher capability at
managing or reducing risks.
RISK SHARING:
 “SHARING WITH ANOTHER PARTY TH EBURDEN OF LOSS OR BENEFIT OF GAIN
FROM A RISK AND MEASURES TO REDUCE A RISK “
 Risk transfer is often used inplace of risks sharing in the mistaken belief that you can transfer a
risk to a third party thorough insurance or outsourcing.
 Buyer of the contract retains legal responsibility for the losses transferred meaning that insurance
may be described more accurately as post event compensatory mechanism.
 Insurance policy provides that if an accident occurs involving the policy holder then some
compensation may be payable to policy holder that is commensurate to suffering /damage.
RISK RETENTION:
 Involves accepting loss or benefit of gain from a risk when it occurs.
 It is a variable strategy for small risks where the cost of insuring against risk would be greater
over time than the total losses sustained.
 All risks that are avoided or transferred are retained by default.
 This risks includes large either cannot be insured against or the premiums would be
infeasible.
 Example: war is an example since most property and risks are not insured against war. So loss
attributed by war is retained by insured.
 Potential loss risk over the amount insured is retained risk.
CONCEPT OF RISK MITIGATION AND BENEFITS OF RISK MANAGEMENT PLAN.
A systematic reduction in the extent of exposure to a risk and/or the likelihood of its occurrence. Also called
risk reduction.

The risk mitigation plan captures the risk mitigation approach for each identified risk event and the actions the
project management team will take to reduce or eliminate the risk. If a risk event does occur, then the partnering
company absorbs some or all of the negative impact of the event.
Risk Mitigation, within the context of a project, can be defined as a measure or set of measures taken by a
project manager to reduce or eliminate the risks associated with a project. ... The project manager takes complete
authority of reducing the probability of occurrence of risks while executing a project.

Mitigating Monetary Risks

 Cost-based risk factors are difficult to estimate.
 The experienced manager developes an intuition about decisions so that those that will increase the costs
of deploying a task can be avoided.
 A safer bet used by project managers is the use of sophisticated cost estimation techniques.
 Some of the techniques such as Critical Path Method (CPM)/Program Evaluation and Review Technique
(PERT) are used to oversee deployment of a task or a set of tasks and in analyzing the risks involved.
 Advanced techniques such as Expected Monetary Value (EMV) provide an insight on financial gain or
loss if an event does or does not occur.
Mitigating Scheduling Risks
 Executing the right task at the right time helps to lower the risk of not meeting the project due date.
 Tasks can be assigned to individuals in two ways.
 The first one is to calculate the estimated processing time of each of the tasks and executing the tasks
based on the Shortest Processing Time (SPT).
 The second one is to define due dates for each of the tasks and process them based on the Earliest Due
Date (EDD).
 A project manager is the best judge here as to which method he would like to use in scheduling the tasks
and delegating them to the individuals associated with the execution of the project.
 An advanced method of decreasing the risks while scheduling work-based tasks is by using the Monte
Carlo Simulation method.

Risk Mitigation strategies is strategy whereby the project team takes action to reduce the probability of
risk occurring. This does not remove the risk or potential impact, but rather reduces the likehood of
becoming real.

The four types of risk mitigating strategies include risk avoidance, acceptance, transference and limitation.
 Avoid: In general, risks should be avoided that involve a high probability impact for both financial loss and
damage.
 Transfer: Risks that may have a low probability for taking place but would have a large financial impact
should be mitigated by being shared or transferred, e.g. by purchasing insurance, forming a partnership, or
outsourcing.
 Accept: With some risks, the expenses involved in mitigating the risk is more than the cost of tolerating the
risk. In this situation, the risks should be accepted and carefully monitored.
 Limit: The most common mitigation strategy is risk limitation, i.e. businesses take some type of action to
address a perceived risk and regulate their exposure. Risk limitation usually employs some risk acceptance
and some risk avoidance.
THE BENEFITS OF RISK MANAGEMENT PLAN
 See risks that are not apparent.
 Provide insights and support to the Board of Directors.
 Get credit for cooperation.
 Build a better defense to class-actions.
 Reduce business liability.
Frame regulatory issues.

1. It’s easier to spot projects in trouble

Risk management practices let you see where projects need attention, and which projects these are. Dovetailing
perfectly with any existing Project Management Office processes you already have in place, good risk
management can give you the context for understanding the performance of a project and contribute to any
health checks, peer reviews or audits.

2. There are fewer surprises

Leaders typically don’t like surprises! A robust approach to managing risk allows teams to better communicate
about project challenges in a more timely way. Risk management practices let the team spot concerns far earlier.

Early awareness of potential problems means that the right people can intervene to mitigate a problem before it
becomes too severe to do anything about. It also avoids the ‘project manager as hero’ scenario, and lots of
firefighting, which is generally an expensive and high-effort way to fix problems. Managing risks before they
materialize makes for fewer sensational headlines but a smoother, more efficient and cost-effective way of
running your business.

3. There’s better quality data for decision making

Senior leaders have access to better quality and more helpful data which enables them to make better decisions
more grounded in the reality of a project.

Being able to access risk information in real time through a project management dashboard means that decisions
are made based on the latest data, not a report that is already out of date before it reaches the Exec team.

4. Communication is elevated
Good risk management elevates the conversation. It creates a point of discussion between project teams and key
senior stakeholders, prompting them to discuss the difficult topics and deal with potential causes of conflict.
Suppliers are involved in the conversations too, as risk responses necessarily touch on their activities. Including
them in risk management discussions can create more positive working relationships with their key personnel,
because they’ll see that their success is tied to the success of the project and that there is willingness to work as a
whole team to do something about it.

The conversation can be framed in what is good for the project and the enterprise, instead of either being too
caught up in the detail or affected by internal politics. An increase in dialogue, and the content of that dialogue,
brings the team closer together as a working group.

5. Budgets rely less on guesswork

contingency budget for this project -- 10%.”

Project risk management means that contingency budgets can be more accurately estimated and rely less on the
professional guesstimates of the project team. By incorporating risk management into schedule planning and
cost planning you can create scenarios to better inform what you should be budgeting in terms of extra time,
resource and money.

Overall this will lead to fewer cost and time overruns and better quality plans.

6. The expectation of success is set

Knowing that risk is being actively managed sets an expectation for project success. With the framework in
place to deliver despite the known risks, and open communication about the project’s challenges with senior
managers, everyone begins work knowing that success is the expected outcome.

This changes the whole mindset of the team: knowing they are working on something destined to deliver great
results for the company improves morale, supports productivity and hopefully engenders and environment where
success is achieved!
7. The team remains focused
With risks being actively tracked and managed, the project team can maintain a focus on the critical outcomes.
Risk management supports this because it serves to highlight where project outcomes may not be achieved,
focusing the team on what to do about that particular concern to get the project back on track
3.Mention steps involved in creating a project budget. What are the uncertainties
associated with budget?
CREATING A PROJECT BUDGET.
Step 1 :Set Pay rates
Step 2 : Enter per-use costs
Step 3 :Enter fixed costs
Step 4 : Set Task types
Step 5 :assign resources

FIVE STEPS TO PREPARE BUDGET(FRAMING)

Step:1Set Pay Rates

– For Each Resource (project)specify standard pay

– Task Based on hours(resources)
– Overtime hours on a taskovertime rate
• Projecting Cost ,Project multiply std of assigned resources by how
many hours( Minutes, days, weeks, months or year) that resource
assigned to task.
• Programmer costs Rs.500 per hour and assigned 10 works for one
task(cost would beRs.5000).
• Project multiplies amt of time spend working on the task by assigned
resource(standard)

– MATERIALRESOURCES:
• Name of material resources and specific std rate applied to number
materials units assigned to a task.
• Software-->StandardrateRs.600/license
• Assign ->10 Licenses (Units) to a task, cost is Rs.6000
STEP2:Per-UseCosts

•Per Use cost -> Lump sum cost for resource,

•Every time assign resource to a task(lump sum or per cost is applied)
•Combined peruse costs +standard rates
•Large Setup cost (piece of equipment),pay for by hour
afterward(use per-use cost and standard rate –piece of
equipment)
• Per cost value is added to total cost for resources.(along to timely hour)
STEP 3: Enter Fixed Cost
• Allow you to assign costs (task level, summary task level /project level)
• No need to assign resources to see cost calculation (fixed costs)
SET4:SET TASK TYPES

• Critical
• TO calculate hours of work=Duration*Units(Scheduling Formula)
• Or Duration =work/Units
• Work= No. of hours effort needed to complete a task
 • Units–percentage of resource that is allocated to work on the task.
• 50% resource of one person resource = half of resource„ s
Working time is spend on the task.
• If you assign 1 person( a work resource) to a task  10 day duration
• Work =10 Days (Duration)*100%(Units)=10 days(80 hours)
• IFYouassign2peopletothat10daytask
• Work=10 days(Duration) * 200%( 2 people assigned full
time)=20days(160hoursofwork)
• If Resources increases after initial assignment.
• Task 10 days, 1 person - 80hours required
• Using default setting in Project, assign a 2ndPerson to task
full time. Duration=Work/Units.
• Duration= 80 hours/200 %(units)=40 hours or 1 week
STEP:5 ASSIGNRESOURCES
• Last Step
• Add resource to the project , by Resources sheet
• After Adding Resources ,Assign resources to tasks
• Assign resources by using task form
Use Resource by using Assign Resource Dialog Box
UNCERTAINITIES IN BUDGET:
Uncertain events by their source (technical issues, market, people, cost, schedule and quality).
Characteristics of uncertainty in Projects:
I. Variation.
II. Foreseen uncertainty
III. UnForeseen Uncertainity
IV. Chaos
VARIATION

Variation comes from many small influences and yields a range of values on a particular activity — activity X
may take between 32 and 34 weeks, for example.
 At the start of projects characterized by variation, managers know the sequence and nature of activities
and have clearly defined objectives.
 The project plan is detailed and stable, but schedules and budgets vary from their projected values. A
shifting schedule causes the critical path (the train of activities that determines overall project duration)
to move, forcing project managers to monitor variations across the board, not just critical activities.
 In a construction project, for example, myriad events (worker sickness, weather, delayed parts delivery,
unanticipated difficulty of tasks) influence budget, schedule and specifications. Such influences are too
small to plan for and monitor individually, but the project team could plan for and monitor the resulting
variations in expense and time.

Foreseen Uncertainty

Foreseen uncertainties are identifiable and understood influences that the team cannot be sure will occur. Unlike
variation, which comes from combined small influences, foreseen uncertainty is distinct and may require full-
blown risk management with several alternative plans.
for example:
 Pharmaceutical development typifies foreseen uncertainty.
 It is geared toward detecting and managing risks, primarily in the form of drug side effects.
 A developer of a new drug can anticipate possible side effects because they have appeared previously in
related drugs.
 It then can outline contingency plans to change the prescribed dosage or restrict usage to certain
indications or well-controlled circumstances.
 The side effect is the foreseen uncertainty.
 The contingency plan may never be used, but it is there if the side effect occurs.

Unforeseen Uncertainty

 unforeseen uncertainty can’t be identified during project planning.

 There is no Plan B.
 The team either is unaware of the event’s possibility or considers it unlikely and doesn’t bother creating
contingencies. Unforeseen uncertainty is not always caused by spectacular out-of-the-blue events,
however.
 It also can arise from the unanticipated interaction of many events, each of which might, in principle, be
foreseeable.
 Unforeseen uncertainty occurs in any project that pushes a technology envelope or enters a new or
partially known market.
for example;
Johnson and Johnson Baby care soap marketed as nonclinical soap .But lot of complaints have come against the company
regarding allergic of baby care products which possess a threat and unforeseen uncertaint.

Chaos

Whereas projects subject to unforeseen uncertainty start out with reasonably stable assumptions and goals,
projects subject to chaos.
 Even the basic structure of the project plan is uncertain, as is the case when technology is in upheaval or
when research, not development, is the main goal.
 Often the project ends up with final results that are completely different from the project’s original intent.
For example, in 1991, Sun Microsystems conceived of Java as software to drive a controlling device for
household appliances. It wasn’t until 1995 that Java became hugely successful as a programming language for
Web pages. Ironically, a decade after Java’s conception, we are finally seeing consumer-appliance applications
for it.

4. Discuss the procedure of CPM Analysis with the help of a simple example.
How would you compute a Critical Path?

• The critical path method (CPM), or critical path analysis (CPA), is an algorithm
for scheduling a set of project activities.
• It is commonly used in conjunction with the program evaluation and review
technique (PERT).
• The critical path method (CPM) is a project modelling technique developed in the
late 1950s by Morgan R. Walker of DuPont and James
E. Kelley Jr. of Remington Rand.
• CPM is used in construction, aerospace and defence, software development,
research projects, product development, engineering, and plant maintenance,
among others.
• major skyscraper development was in 1966 while constructing the former
World Trade Center Twin Towers in NYC.
• Although the original CPM program and approach is no longer used,
• the term is generally applied to any approach used to analyze a project network
logic diagram.
• The essential technique for using CPM: is to construct a model of the project
that includes the following:
• A list of all activities required to complete the project (typically
categorized within a work breakdown structure),
• The time (duration) that each activity will take to complete,
• The dependencies between the activities and,
• Logical end points such as milestones or deliverable items.
• CPM calculates the longest path of planned activities to logical end points or to the end of
the project.
• the earliest and latest that each activity can start and finish without making the project
longer and which have "total float" .
• a critical path is the sequence of project network activities which add up to the longest
overall duration, regardless if that longest duration has float or not.
• This determines the shortest time possible to complete the project.
• E.G:
• if a project is testing a solar panel and task 'B' requires 'sunrise', there could be a
scheduling constraint on the testing activity so that it would not start until the
scheduled time for sunrise. This might insert dead time (total float) into the
schedule on the activities on that path prior to the sunrise due to needing to wait
for this event.
• individual tasks on the critical path prior to the constraint might be able to be delayed
without elongating the critical path.
• A project can have several, parallel, near critical paths; and some or all of the tasks
could have 'free float' and/or 'total float'.
• An additional parallel path through the network with the total durations shorter
than the critical path is called a sub-critical or non- critical path.
• Example can be Your Choice with Critical path network

• Activities A, B, C, D, and E comprise the critical or longest path, while Activities

F, G, and H are off the critical path with floats of 15 days, 5 days, and 20 days
respectively. Whereas activities that are off the
 critical path have float and are therefore not delaying completion of the project,
those on the critical path will usually have critical path drag, i.e., they delay project
completion.
– If a critical path activity has nothing in parallel, its drag is equal to
its duration. Thus A and E have drags of 10 days and 20 days
respectively.
– If a critical path activity has another activity in parallel, its drag is
equal to whichever is less: its duration or the total float of the
parallel activity with the least total float.
– s since B and C are both parallel to F (float of 15) and H (float of
20),
– B has a duration of 20 and drag of 15 (equal to F's float),
– while C has a duration of only 5 days and thus drag of only 5.
– Activity D, with a duration of 10 days, is parallel to G (float of 5) and
H (float of 20) and therefore its drag is equal to 5, the float of G.

THERE ARE SIX STEPS IN THE CRITICAL PATH METHOD:

Step 1: Specify Each Activity. ...

Step 2: Establish Dependencies (Activity Sequence) ...
Step 3: Draw the Network Diagram. ...
Step 4: Estimate Activity Completion Time. ...
Step 5: Identify the Critical Path. ...
Step 6: Update the Critical Path Diagram to Show Progress.

Key Steps in the Critical Path Method

There are six steps in the critical path method:

Step 1: Specify Each Activity

Using the work breakdown structure, you need to identify each activity (or task) involved in the project.
This activity specification list should only include higher-level activities. When detailed activities are
used, the critical path analysis may become too complex to manage and maintain.

A work breakdown structure breaks down projects into manageable sections.

The first step is to identify the main deliverables of a project. Then you can start breaking down the high-
level activities into smaller chunks of work.

You can choose how to display your work breakdown structure. Some people use a tree structure, while
others use lists or tables. An outline is one of the easiest ways to represent a work breakdown structure.

Step 2: Establish Dependencies (Activity Sequence)

Some activities will depend on the completion of others. Listing the immediate predecessors of each
activity will help you identify the correct order. To correctly identify activities and their precedence, ask
yourself these three questions for each activity on your list from step one:

Which task should take place before this task happens?

Which tasks should be finished at the same time as this task?
Which tasks should happen right after this task?
Step 3: Draw the Network Diagram
Network diagram Critical Path
Once you have identified the activities and their dependencies, you can draw the critical path analysis
chart (CPA), known as the network diagram. The network diagram is a visual representation of the order
of your activities based on dependencies.

This critical path diagram used to be drawn by-hand, but there are now software programs that can create
this diagram for you.

Step 4: Estimate Activity Completion Time

Using past experience or the knowledge of an experienced team member, you must now estimate the
time required to complete each activity. If you are managing a smaller project, you will most likely
estimate time in days. If you are working with a complex project, you may have to measure time in
weeks.

If you don’t feel comfortable using your best-guess estimates, you can use the 3-point estimation method,
which is designed to put more weight on the most realistic timeframe.

In three-point estimation, you must come up with three time estimates for every task, based on prior
experience or best guesses. The estimation method is presented in formulas in order to calculate the time
duration more accurately.

a = the best-case estimate

m = the most likely estimate
b = the worst-case estimate

These three values identify what happens in an optimal state, what is the most likely, and what happens
in the worst case scenario.

Once you’ve identified these values, you can use them in two different formulas. The first is used to find
the Weighted Average, which puts more weight on the “Most Likely” value. The formula is as below. E
stands for Estimate, and the 4 and 6 represent the standard method to place more weight on the most
realistic value.

E = (a + 4m + b) / 6
The second way of using these values is known as Triangular Distribution. The main difference is that
this method doesn’t put more weight on the “Most Likely” value. The formula is as below. E stands for
Estimate, and the 3 represents the standard method.

E = (a + m + b)/3

Step 5: Identify the Critical Path

The critical path method
There are two ways you can now identify the critical path. You can eyeball your network diagram and
simply identify the longest path throughout the network -- the longest sequence of activities on the path.
Be sure to look for the longest path in terms of longest duration in days, not the path with the most boxes
or nodes.

You can also identify critical activities with the Forward Pass/Backward Pass technique, identifying the
earliest start and finish times, and the latest start and finish times for each activity.

If you have multiple critical paths, you will run into network sensitivity. A project schedule is considered
sensitive if the critical path is likely to change once the project begins. The more critical paths in a
project, the higher the probability of a change in schedule.

Step 6: Update the Critical Path Diagram to Show Progress

As the project progresses, you will learn the actual activity completion times. The network diagram can
then be updated to include this information (rather than continuing to use estimations).

By updating the network diagram as new information emerges, you may recalculate a different critical
path. You will also have a more realistic view of the project completion due date and will be able to tell
if you are on track or falling behind.
 5. Mention the Principles of Goldratt’s Critical Chain Project Management and the three
buffers suggested by him. Concept and allotment of resources
Principles :

Ensure resource bottleneck on critical path is always busy and stays focused.

Kept on Task(minimize multitasking)

Be ready for assignment

Critical Chain Book introduces increasingly complex situation until two common project
situations.
 A Bottleneck resource on critical path and non-critical path
 Multiple projects contending for constrained resource.
 Time estimates are just that- estimates (cannot be treated as absolute times)
CONCEPT:

Methodology –Planning, executing and managing projects in a single and multi project environments.
Introduced by Dr.Eli Goldraftt (“ Critical Chain “)
Task based on individual providing values, feel will give them 80- 90% chance of completing step ,
further padded up by manager creating length of time as much as 200% of actual time.
Triggering the ‘student syndrome’ in resources assignment to task.(Have more time to complete the task.
Encouraging multitasking and early completion.

 Series of steps to establish principles and pointing out problems with how time estimate are
normally done.

 Critical chain
 Trying to attain his tenture at university business school.
 Plot-Maintain interest in the subject.
 The Plot of the Novel is Fourfold:
1. A Professor trying to become tentured
2. A Business school’s struggle to improve enrollment
3. Teaching philosophy
4. Applying the theory of constrains to project management.
o Task based on individual providing values, feel will give them 80- 90% chance of
completing step , further padded up by manager creating length of time as much
as 200% of actual time.
o Triggering the ‘student syndrome’ in resources assignment to task.(Have more
time to complete the task.
o Encouraging multitasking and early completion.
THEORY OF CONSTRAINTS PRIMER
i. THE Book presents a primer for Theory of Constraints.(lecture by a
professor after sabbatical to large audience using Theory Of
Constraints)
ii. The book enumerates the five principle steps –Theory of Constraints.
iii. Identify- Identify the bottleneck of the system
iv. Exploit-Exploit this bottleneck( changing process, equipment
maintenance procedure,training, policies
v. Subordinate: Sub ordinate the throughput of all other work centers to
this work center.
vi. Elevate : Invest in this work center to increase its throughput- Add
Equipment and Man power
vii. Inertia: Start the process over on the Line-to determine New
 bottleneck

 This theory points out conflict with respect to an axiom in Theory Of Constraints states if two
concepts are in direct conflict, there is an assumption as part of those concepts that is incorrect.

RESOURCES INFLUENCES:
 Ensure resource bottleneck on critical path is always busy and stays focused.
 They Should be:
 Kept on Task(minimize multitasking)
 Be ready for assignment
 Critical Chain Book introduces increasingly complex situation until two common project
situations.
 A Bottleneck resource on critical path and non-critical path
 Multiple projects contending for constrained resource.
 Time estimates are just that- estimates (cannot be treated as absolute times)
RESOURCE CONSTRAINTS:
 Project with single bottlenecked resource on multiple paths.
 When Resource is over utilized on multiple paths its Tasks need to be considered when
determining project duration.(critical Chain)
 Critical Chain-aggregate of critical path and constrained resource level tasks.

THREE TYPES OF BUFFER/STRATEGIC POINTS

o Project Buffers
o Feeding Buffers
o Resource buffers
Project Buffer:
 Inserted at the end of project network btw the last task and
completion date.
 Any delay on longest chain of dependent tasks consume some buffer
with complete date unchanged.
 Recommended to half the size of safety time taken out, resulting in
project that is Planned to be 75% of a “Traditional “Project network.
Feeding Buffers:
 Inserted between last task on feeding path and the critical chain.
 Feeding buffer recommended to be half the size of safety time taken
out of the feeding path.
Resource buffers:
 Appropriate people and skills are available to work on critical chain
tasks as soon as needed.
 GOLDRATT'S CRITICAL CHAIN IN ALLOTMENT OF RESOURCES IN A PROJECT

1. Planning
Critical Chain: Longest chain (not path) of dependent tasks.
dependent refers-resources, resource contention across tasks/project
Resource contention in sequence and logical dependencies of task.
Estimations: To reduce the behaviours and wasting time –too much on embedded
safety,
CCPM recommends task estimates are cut to half length of
normal duration
Safety: Safety buffer to manage impact of variation and uncertainty around
projects.
Safety at a task level is aggregated and moved to strategic points in project flow.
Three types of Buffer/Strategic Points
Project Buffer
Feeding Buffers
Resource buffers
Project Buffer:
Inserted at the end of project network btw the last task and completion
date.
Any delay on longest chain of dependent tasks consume some buffer with
complete date unchanged.
Recommended to half the size of safety time taken out, resulting in project
that is Planned to be 75% of a “Traditional “Project network.
Feeding Buffers:
Inserted between last task on feeding path and the critical chain.
Feeding buffer recommended to be half the size of safety time taken out of
the feeding path.
Resource buffers:
Appropriate people and skills are available to work on critical chain tasks
as soon as needed.
2. EXECUTION
Priorities – all resource are given clear and aligned priorities to its associated
buffer and hence project as whole.
Resource with more than one task open should normally be assigned to complete
any task.
Completion: resources on a task are encouraged to follow the roadrunner
approach.
When work available –progessed at fastest possible speed untill completion
Task duration estimates resource to meet aggressive durations.
3. REVIEW:
Project completed with buffer fully consumed on the day it was estimated and
committed.
Project managers determine corrective actions necessary to recover buffer time at
projects where buffering consumption is occurring faster than the project
progressing
4. REMAINING DURATION:
Tasks are monitored on remaining duration(not percentage complete)
No Of days estimate until task will be complete, remaining duration stays-static
or increases.
Resource Managers: watching buffers– where a blockage or potential delay is
occurring and take decisive action quickly to recover.
6. GIVE A DETAILED ANALYSIS ON PROJECT EXPEDITING AND ITS IMPLICATIONS.

Expediting is a concept in purchasing and project management for securing the quality
and timely delivery of goods and components.
Procurement department/External Expeditor controls:
 Progress of manufacturing at supplier concerning quality,
 Packing, conformity with std and set timeline.
 Required goods arrive appointed in agreed quality at
agreed location.
Expediting : needed in large scale projects.
 E.G: Power Plant Engineering, Refinery
installation
 Delay caused by late delivery or inferior
quality-leads to expensive and unsatisfied
clients
 To mange cost and potential risk , third party
expediter used supplier and customer
THIRD PARTY EXPEDITER(OIL N GAS INDUSTRY, ENERGY AND INFRASTRUCTURE INDUSTRY)

 Experts from companies specialization in this field, who keep

track of the following
 Deadlines, Supervisor on site, proper packaging of
components.
 After inspection notify parties and bank about their findings,
when everything is agreed the bank will transfer of price of
goods to supplier.

Supplier is paid immediately (when components leave his factory) n customer/

bank knows the goods will be delivered correctly.
EXPEDITING EXISTS –SEVERAL LEVELS

 PRODUCTION CONTROL:
 Expeditor visits factory for production up to standards of
country goods to be send.
 Necessary for Food and Power Plant components.
Regular Audits for ISO 9001 have been made.
 QUALITY CONTROL:
Components are tested
With the function required and whether made to
measurements and standards of customer.
Quality control –testing for compliance with standards of
destination country.(ASME)
 PACKING TRANSPORT SURVEY:
Lowest and used level of expediting
Goods are counted and packaging controlled and
withstanding adversities of transport(pre shipment
inspection)
 PROJECT MANAGEMENT:
Goods , deadlines, milestones, supplier of project is
monitored.
 Monitors crucial procurement parts of subject.
Different levels of expediting require –different skills, specialist and Labs
(One or several expeditors in the levels, rest offer expediting services
on all levels.)
Large companies- use own expeditors (who perform all four levels) Third
party used- neutral party needed or in house capacity overstretched.
FIELD EXPEDITING:

inspection and control of the expeditor on site.

Client gets comprehension review of exact current status, projection of
future planning.
Identify possible problems and bottlenecks-lead to potential delays.
Desk Expediting: Telephone expediting

Monitor order progress with manufactures-producing companies

Milestone Project –Desk Expediting helps to check project is still
within agreed schedule
Quick and easy way to be informed about current status.
Desk Expediting carried out with the help of field
expediting-verifying actual status.

Implications of Expediting:
 Expediting can be time intensive and this can produce a drain in resources.
 it’s a common process and is symptomatic of various issues within the supply chain.
 Despite expediting being time intensive the costs of using an expediter can be typically absorbed against the cost
of late delivery – often the cost of the expediter is insignificant when compared to penalty clauses bestowed by
customer contracts.
 It improves performance of the suppliers by regularly evaluating their supply quality.
 It improves product quality to minimize product loss,rejects,charge backs and recalls at theend.
 It drives the continued improvement of quality systems and performances to ensure that process are carried out
effectively and on time.

 It protects sales revenue by helping to prevent late shipments,poor quality,wasted materials or empty
consignments.
 Strengthen and protect manufacturers brand image and reputation. It makes the working crew and the
 manufacturer ready to face for the problems that may arise at the lateral stages of the process and need to be
addressed immediately.
 By prior knowledge the manufacturers will be ready with the appropriate solutions.It also gives invaluable details
about the condition of the systems/components, safety concerns, maintenance recommendations and much more.

7.Elucidate the benefits and objectives of Project Simulation.

A simulation is an imitation of the operation of a real-world process or system. The act of simulating something
first requires that a model be developed; this model represents the key characteristics, behaviors and functions of
the selected physical or abstract system or process. The model represents the system itself, whereas the
simulation represents the operation of the system over time.
 Simulation is used in many contexts, such as simulation of technology for performance
optimization, safety engineering, testing, training, education, and video games.
 Often, computer experiments are used to study simulation models.
 Simulation is also used with scientific modelling of natural systems or human systems to gain insight
into their functioning, as in economics.
 Simulation can be used to show the eventual real effects of alternative conditions and courses of action.
 Simulation is also used when the real system cannot be engaged, because it may not be accessible, or it
may be dangerous or unacceptable to engage, or it is being designed but not yet built, or it may simply
not exist.
 Key issues in simulation include acquisition of valid source information about the relevant selection of
key characteristics and behaviours, the use of simplifying approximations and assumptions within the
simulation, and fidelity and validity of the simulation outcomes. Procedures and protocols for model
verification and validation are an ongoing field of academic study, refinement, research and development
in simulations technology or practice, particularly in the field of computer simulation.
 Historically, simulations used in different fields developed largely independently, but 20th century
studies of systems theory and cybernetics combined with spreading use of computers across all those
fields have led to some unification and a more systematic view of the concept.
 Physical simulation refers to simulation in which physical objects are substituted for the real thing (some
circles[4] use the term for computer simulations modelling selected laws of physics, but this article does
not). These physical objects are often chosen because they are smaller or cheaper than the actual object
or system.
  Interactive simulation is a special kind of physical simulation, often referred to as a human in the
loop simulation, in which physical simulations include human operators, such as in a flight
simulator, sailing simulator, or a driving simulator.
 Continuous simulation is a simulation where time evolves continuously based on numerical integration
of Differential Equations.
 Human in the loop simulations can include a computer simulation as a so-called synthetic environment.
 Simulation in failure analysis refers to simulation in which we create environment/conditions to identify
the cause of equipment failure. This was the best and fastest method to identify the failure cause.

Computer simulation
 A computer simulation (or "sim") is an attempt to model a real-life or hypothetical situation on a
computer so that it can be studied to see how the system works. By changing variables in the
simulation, predictions may be made about the behaviour of the system. It is a tool to virtually
investigate the behaviour of the system under study. [1
 Computer simulation has become a useful part of modeling many natural systems
in physics, chemistry and biology,[1] and human systems in economics and social
science (e.g., computational sociology) as well as in engineering to gain insight into the operation of
those systems. A good example of the usefulness of using computers to simulate can be found in the field
of network traffic simulation. In such simulations, the modelbehaviour will change each simulation
according to the set of initial parameters assumed for the
 Several software packages exist for running computer-based simulation modeling (e.g. Monte
Carlo simulation, stochastic modeling, multimethod modeling) that makes all the modeling almost
effortless.
Computer science
 In computer science, simulation has some specialized meanings: Alan Turing used the term "simulation"
to refer to what happens when a universal machine executes a state transition table (in modern
terminology, a computer runs a program) that describes the state transitions, inputs and outputs of a
subject discrete-state machine.[citation needed] The computer simulates the subject machine. Accordingly,
in theoretical computer science the term simulation is a relation between state transition systems, useful
in the study of operational semantics.
 Less theoretically, an interesting application of computer simulation is to simulate computers using
computers. In computer architecture, a type of simulator, typically called an emulator, is often used to
execute a program that has to run on some inconvenient type of computer (for example, a newly
designed computer that has not yet been built or an obsolete computer that is no longer available), or in a
tightly controlled testing environment (see Computer architecture simulator and Platform virtualization).
 Simulators may also be used to interpret fault trees, or test VLSI logic designs before they are
constructed. Symbolic simulation uses variables to stand for unknown values.
 In the field of optimization, simulations of physical processes are often used in conjunction
with evolutionary computation to optimize control strategies.

Automobiles

 An automobile simulator provides an opportunity to reproduce the characteristics of real vehicles in a

virtual environment.
 It replicates the external factors and conditions with which a vehicle interacts enabling a driver to feel as
if they are sitting in the cab of their own vehicle.
 Scenarios and events are replicated with sufficient reality to ensure that drivers become fully immersed
in the experience rather than simply viewing it as an educational experience.
 The simulator provides a constructive experience for the novice driver and enables more complex
exercises to be undertaken by the more mature driver.
  For novice drivers, truck simulators provide an opportunity to begin their career by applying best
practice. For mature drivers, simulation provides the ability to enhance good driving or to detect poor
practice and to suggest the necessary steps for remedial action. For companies, it provides an opportunity
to educate staff in the driving skills that achieve reduced maintenance costs, improved productivity and,
most importantly, to ensure the safety of their actions in all possible situations.
Biomechanics
 An open-source simulation platform for creating dynamic mechanical models built from combinations of
rigid and deformable bodies, joints, constraints, and various force actuators.
 It is specialized for creating biomechanical models of human anatomical structures, with the intention to
study their function and eventually assist in the design and planning of medical treatment.
 A biomechanics simulator is used to analyze walking dynamics, study sports performance, simulate
surgical procedures, analyze joint loads, design medical devices, and animate human and animal
movement.
 A neuro mechanical simulator that combines biomechanical and biologically realistic neural network
simulation. It allows the user to test hypotheses on the neural basis of behavior in a physically accurate 3-
D virtual environment.
City and urban
 A city simulator can be a city-building game but can also be a tool used by urban planners to understand
how cities are likely to evolve in response to various policy decisions.
 Any Logic is an example of modern, large-scale urban simulators designed for use by urban planners.
City simulators are generally agent-based simulations with explicit representations for land
use and transportation. UrbanSim and LEAM are examples of large-scale urban simulation models that
are used by metropolitan planning agencies and military bases for land use and transportation planning.
Classroom of the future
 The "classroom of the future" will probably contain several kinds of simulators, in addition to textual and
visual learning tools. This will allow students to enter the clinical years better prepared, and with a higher
skill level.
 The advanced student or postgraduate will have a more concise and comprehensive method of
retraining—or of incorporating new clinical procedures into their skill set—and regulatory bodies and
medical institutions will find it easier to assess the proficiency and competency of individuals.
 The classroom of the future will also form the basis of a clinical skills unit for continuing education of
medical personnel; and in the same way that the use of periodic flight training assists airline pilots, this
technology will assist practitioners throughout their career
 The simulator will be more than a "living" textbook, it will become an integral a part of the practice of
medicine.
 The simulator environment will also provide a standard platform for curriculum development in
institutions of medical education.
Communication satellites
Modern satellite communications systems (SatCom) are often large and complex with many interacting parts
and elements. In addition, the need for broadband connectivity on a moving vehicle has increased dramatically
in the past few years for both commercial and military applications.
To accurately predict and deliver high quality of service, satcom system designers have to factor in terrain as
well as atmospheric and meteorological conditions in their planning. To deal with such complexity, system
designers and operators increasingly turn towards computer models of their systems to simulate real world
operational conditions and gain insights into usability and requirements prior to final product sign-off.
Modeling improves the understanding of the system by enabling the SatCom system designer or planner to
simulate real world performance by injecting the models with multiple hypothetical atmospheric and
environmental conditions. Simulation is often used in the training of civilian and military personnel.
This usually occurs when it is prohibitively expensive or simply too dangerous to allow trainees to use the real
equipment in the real world. In such situations they will spend time learning valuable lessons in a "safe" virtual
environment yet living a lifelike experience (or at least it is the goal).
Often the convenience is to permit mistakes during training for a safety-critical system.
Digital Lifecycle

Simulation of airflow over an engine

 Simulation solutions are being increasingly integrated with CAx (CAD, CAM, CAE....) solutions and
processes.
 The use of simulation throughout the product lifecycle, especially at the earlier concept and design
stages, has the potential of providing substantial benefits.
 These benefits range from direct cost issues such as reduced prototyping and shorter time-to-market, to
better performing products and higher margins.
 However, for some companies, simulation has not provided the expected benefits.
 The research firm Aberdeen Group has found that nearly all best-in-class manufacturers use simulation
early in the design process as compared to 3 or 4 laggards who do not.
 The successful use of simulation, early in the lifecycle, has been largely driven by increased integration
of simulation tools with the entire CAD, CAM and PLM solution-set. Simulation solutions can now
function across the extended enterprise in a multi-CAD environment, and include solutions for managing
simulation data and processes and ensuring that simulation results are made part of the product lifecycle
history.
 The ability to use simulation across the entire lifecycle has been enhanced through improved user
interfaces such as tailorable user interfaces and "wizards" which allow all appropriate PLM participants
to take part in the simulation process.
Disaster preparedness[edit]
 Simulation training has become a method for preparing people for disasters.
 Simulations can replicate emergency situations and track how learners respond thanks to a lifelike
experience. Disaster preparedness simulations can involve training on how to handle terrorism attacks,
natural disasters, pandemic outbreaks, or other life-threatening emergencies.
 One organization that has used simulation training for disaster preparedness is CADE (Center for
Advancement of Distance Education). CADE [67] has used a video game to prepare emergency workers
for multiple types of attacks.
.
Economics[edit]
 In economics and especially macroeconomics, the effects of proposed policy actions, such as fiscal
policy changes or monetary policy changes, are simulated to judge their desirability.
 A mathematical model of the economy, having been fitted to historical economic data, is used as a proxy
for the actual economy; proposed values of government spending, taxation, open market operations, etc.
are used as inputs to the simulation of the model, and various variables of interest such as the inflation
rate, the unemployment rate, the balance of trade deficit, the government budget deficit, etc. are the
outputs of the simulation.
 The simulated values of these variables of interest are compared for different proposed policy inputs to
determine which set of outcomes is most desirable.
Engineering, technology, and processes
 Simulation is an important feature in engineering systems or any system that involves many processes.
 For example, in electrical engineering, delay lines may be used to simulate propagation delay and phase
shiftcaused by an actual transmission line. Similarly, dummy loads may be used to
simulate impedance without simulating propagation, and is used in situations where propagation is
unwanted.
 A simulator may imitate only a few of the operations and functions of the unit it simulates. Contrast
with: emulate
 Most engineering simulations entail mathematical modeling and computer assisted investigation. There
are many cases, however, where mathematical modeling is not reliable.
 Simulation of fluid dynamics problems often require both mathematical and physical simulations. In
these cases the physical models require dynamic similitude. Physical and chemical simulations have also
direct realistic uses, rather than research uses; in chemical engineering, for example, process
simulations are used to give the process parameters immediately used for operating chemical plants, such
as oil refineries.
 Simulators are also used for plant operator training. It is called Operator Training Simulator (OTS) and
has been widely adopted by many industries from chemical to oil&gas and to power industry. This
created a safe and realistic virtual environment to train board operators and engineers. Mimic is capable
of providing high fidelity dynamic models of nearly all chemical plants for operator training and control
system testing.
Equipment
 Due to the dangerous and expensive nature of training on heavy equipment, simulation has become a
common solution across many industries.
 Types of simulated equipment include cranes, mining reclaimers and construction equipment, among
many others.
 Often the simulation units will include pre-built scenarios by which to teach trainees, as well as the
ability to customize new scenarios. Such equipment simulators are intended to create a safe and cost
effective alternative to training on live equipment.
Finance
 In finance, computer simulations are often used for scenario planning.
 Risk-adjusted net present value, for example, is computed from well-defined but not always known (or
fixed) inputs. By imitating the performance of the project under evaluation, simulation can provide a
distribution of NPV over a range of discount rates and other variables. Simulations are also often used to
test a financial theory or the ability of a financial model. [80]
 Simulations are frequently used in financial training to engage participants in experiencing various
historical as well as fictional situations.
 There are stock market simulations, portfolio simulations, risk management simulations or models and
forex simulations. Such simulations are typically based on stochastic asset models. Using these
simulations in a training program allows for the application of theory into a something akin to real life.
Flight
 Flight Simulation Training Devices (FSTD) are used to train pilots on the ground. In comparison to
training in an actual aircraft, simulation based training allows for the training of maneuvers or situations
that may be impractical (or even dangerous) to perform in the aircraft, while keeping the pilot and
instructor in a relatively low-risk environment on the ground. For example, electrical system failures,
instrument failures, hydraulic system failures, and even flight control failures can be simulated without
risk to the pilots or an aircraft.
 Instructors can also provide students with a higher concentration of training tasks in a given period of
time than is usually possible in the aircraft.
 For example, conducting multiple instrument approaches in the actual aircraft may require significant
time spent repositioning the aircraft, while in a simulation, as soon as one approach has been completed,
 the instructor can immediately preposition the simulated aircraft to an ideal (or less than ideal) location
from which to begin the next approach.
 Flight simulation also provides an economic advantage over training in an actual aircraft. Once fuel,
maintenance, and insurance costs are taken into account, the operating costs of an FSTD are usually
substantially lower than the operating costs of the simulated aircraft. For some large transport category
airplanes, the operating costs may be several times lower for the FSTD than the actual aircraft.
 Some people who use simulator software, especially flight simulator software, build their own simulator
at home.
 Some people—to further the realism of their homemade simulator—buy used cards and racks that run the
same software used by the original machine. While this involves solving the problem of matching
hardware and software—and the problem that hundreds of cards plug into many different racks—many
still find that solving these problems is well worthwhile.
 Some are so serious about realistic simulation that they will buy real aircraft parts, like complete nose
sections of written-off aircraft, at aircraft boneyards. This permits people to simulate a hobby that they
are unable to pursue in real life.
Marine
Bearing resemblance to flight simulators, marine simulators train ships' personnel. The most common marine
simulators include:
 Ship's bridge simulators
 Engine room simulators
 Cargo handling simulators
 Communication / GMDSS simulators
 ROV simulators
Simulators like these are mostly used within maritime colleges, training institutions and navies. They often
consist of a replication of a ships' bridge, with operating console(s), and a number of screens on which the
virtual surroundings are projected.
Military
 Military simulations, also known informally as war games, are models in which theories of warfare can
be tested and refined without the need for actual hostilities.
 They exist in many different forms, with varying degrees of realism. In recent times, their scope has
widened to include not only military but also political and social factors (for example,
the NationLab series of strategic exercises in Latin America).
 While many governments make use of simulation, both individually and collaboratively, little is known
about the model's specifics outside professional circles.
Payment and securities settlement system
 Simulation techniques have also been applied to payment and securities settlement systems.
 Among the main users are central banks who are generally responsible for the oversight of market
infrastructure and entitled to contribute to the smooth functioning of the payment systems.
 Central banks have been using payment system simulations to evaluate things such as the adequacy or
sufficiency of liquidity available ( in the form of account balances and intraday credit limits) to
participants (mainly banks) to allow efficient settlement of payments The need for liquidity is also
dependent on the availability and the type of netting procedures in the systems, thus some of the studies
have a focus on system comparisons.
 Another application is to evaluate risks related to events such as communication network breakdowns or
the inability of participants to send payments (e.g. in case of possible bank failure) .This kind of analysis
falls under the concepts of stress testing or scenario analysis.
 To perform stress testing and scenario analysis, the observed data needs to be altered, e.g. some
payments delayed or removed. To analyze the levels of liquidity, initial liquidity levels are varied.
System comparisons (benchmarking) or evaluations of new netting algorithms or rules are performed by
running simulations with a fixed set of data and varying only the system setups.
Project management
 Project management simulation is simulation used for project management training and analysis.
 It is often used as training simulation for project managers. In other cases it is used for what-if analysis
and for supporting decision-making in real projects.
 Frequently the simulation is conducted using software tools.
Robotics
 A robotics simulator is used to create embedded applications for a specific (or not) robot without being
dependent on the 'real' robot.
 In some cases, these applications can be transferred to the real robot (or rebuilt) without modifications.
 Robotics simulators allow reproducing situations that cannot be 'created' in the real world because of
cost, time, or the 'uniqueness' of a resource.
 A simulator also allows fast robot prototyping. Many robot simulators feature physics engines to
simulate a robot's dynamics.
Production
Simulation of production systems is used mainly to examine the effect of improvements or investments in a
production system. Most often this is done using a static spreadsheet with process times and transportation
times. For more sophisticated simulations Discrete Event Simulation (DES) is used with the advantages to
simulate dynamics in the production system. A production system is very much dynamic depending on
variations in manufacturing processes, assembly times, machine set-ups, breaks, breakdowns and small
stoppages. There are lots of software commonly used for discrete event simulation. They differ in usability and
markets but do often share the same foundation.
Sales process
 Simulations are useful in modeling the flow of transactions through business processes, such as in the
field of sales process engineering, to study and improve the flow of customer orders through various
stages of completion (say, from an initial proposal for providing goods/services through order acceptance
and installation).
 Such simulations can help predict the impact of how improvements in methods might impact variability,
cost, labor time, and the quantity of transactions at various stages in the process.
 A full-featured computerized process simulator can be used to depict such models, as can simpler
educational demonstrations using spreadsheet software, pennies being transferred between cups based on
the roll of a die, or dipping into a tub of colored beads with a scoop.
Sports
 In sports, computer simulations are often done to predict the outcome of events and the performance of
individual sportspeople.
 They attempt to recreate the event through models built from statistics.
 The increase in technology has allowed anyone with knowledge of programming the ability to run
simulations of their models. The simulations are built from a series of mathematical algorithms, or
models, and can vary with accuracy. Accuscore, which is licensed by companies such as ESPN, is a well
known simulation program for all major sports. It offers detailed analysis of games through simulated
betting lines, projected point totals and overall probabilities.

 Another way simulations are helping the sports field is in the use of biomechanics.
 Models are derived and simulations are run from data received from sensors attached to athletes and
video equipment.
 Sports biomechanics aided by simulation models answer questions regarding training techniques such as:
the effect of fatigue on throwing performance (height of throw) and biomechanical factors of the upper
limbs (reactive strength index; hand contact time).
 Computer simulations allow their users to take models which before were too complex to run, and give
them answers. Simulations have proven to be some of the best insights into both play performance and
team predictability.
Space shuttle countdown

Firing Room 1 configured for space shuttlelaunches

Simulation is used at Kennedy Space Center (KSC) to train and certify Space Shuttle engineers during simulated
launch countdown operations.
The Space Shuttle engineering community participates in a launch countdown integrated simulation before each
shuttle flight. This simulation is a virtual simulation where real people interact with simulated Space Shuttle
vehicle and Ground Support Equipment (GSE) hardware.

. Some of the Shuttle systems integrated in the simulation are the main propulsion system, main engines, solid
rocket boosters, ground liquid hydrogen and liquid oxygen, external tank, flight controls, navigation, and
avionics.[89] The high-level objectives of the Shuttle Final Countdown Phase Simulation are:
 To demonstrate Firing Room final countdown phase operations.
 To provide training for system engineers in recognizing, reporting and evaluating system problems in a time
critical environment.
 To exercise the launch team's ability to evaluate, prioritize and respond to problems in an integrated manner
within a time critical environment.
 To provide procedures to be used in performing failure/recovery testing of the operations performed in the
final countdown phase.

Weather
 Predicting weather conditions by extrapolating/interpolating previous data is one of the real use of
simulation.
 This kind of simulations help in predicting and forewarning about extreme weather conditions like the
path of an active hurricane/cyclone.
 Numerical weather prediction for forecasting involves complicated numeric computer models to predict
weather accurately by taking many parameters into account.

Imitation of the operation of real world process or system over time.

Model developed-(System itself) Key charactertics Simulation (operation of system)
BENEFITS –simulation:

 Simulation used for

 Performance optimization
 Safety engineering testing, Training,education and video games
 Simulation
 can be used with scientific modeling of natural systems or human systems
 When real cannot be used(dangerous or unacceptable)
 Alternative conditions.
 Physical simulation: physical objects substituted for real
thing(circle computer simulation for law of physics)
 Interactive Simulation: Special Kind of Physical simulation (human
in loop simulation-Driving Simulator
 Synthetic Environment: human in loop simulation
 Simulation can be used in task or situational training areas-React properly,
decision making environment –test, select alternative – for criteria
8. Explain the concept of Project Uncertainty with a detailed note.
 Uncertainty is the quantification of the doubt about the measurement result.
 Uncertainty is an inevitable aspect of most projects , but even the most proficient managers have
difficult handling it.
 Managers use decision mile stones to anticipate outcome, risk management to prevent disasters and
sequential iterations to make sure everyone is making desired product, yet project still ends up with an
overrun schedule, overflowing budget and compromised specifications, etc
 Example: project areas include – personal computer development, telecommunications, internet start
up, air-ship development, building construction.
WHAT UNCERTAINITY LOOKS LOOKS LIKE:

Uncertain events by their source (technical issues, market, people, cost, schedule and quality).
Characteristics of uncertainty in Projects:
V. Variation.
VI. Foreseen uncertainty
VII. UnForeseen Uncertainity
VIII. Chaos
VARIATION
Variation comes from many small influences and yields a range of values on a particular activity — activity X
may take between 32 and 34 weeks, for example.
 At the start of projects characterized by variation, managers know the sequence and nature of activities
and have clearly defined objectives.
 The project plan is detailed and stable, but schedules and budgets vary from their projected values. A
shifting schedule causes the critical path (the train of activities that determines overall project duration)
to move, forcing project managers to monitor variations across the board, not just critical activities.
 In a construction project, for example, myriad events (worker sickness, weather, delayed parts delivery,
unanticipated difficulty of tasks) influence budget, schedule and specifications. Such influences are too
small to plan for and monitor individually, but the project team could plan for and monitor the resulting
variations in expense and time.
Foreseen Uncertainty
Foreseen uncertainties are identifiable and understood influences that the team cannot be sure will occur. Unlike
variation, which comes from combined small influences, foreseen uncertainty is distinct and may require full-
blown risk management with several alternative plans.
for example:
 Pharmaceutical development typifies foreseen uncertainty.
 It is geared toward detecting and managing risks, primarily in the form of drug side effects.
 A developer of a new drug can anticipate possible side effects because they have appeared previously in
related drugs.
 It then can outline contingency plans to change the prescribed dosage or restrict usage to certain
indications or well-controlled circumstances.
 The side effect is the foreseen uncertainty.
 The contingency plan may never be used, but it is there if the side effect occurs.
Unforeseen Uncertainty
 unforeseen uncertainty can’t be identified during project planning.
 There is no Plan B.
  The team either is unaware of the event’s possibility or considers it unlikely and doesn’t bother creating
contingencies. Unforeseen uncertainty is not always caused by spectacular out-of-the-blue events,
however.
 It also can arise from the unanticipated interaction of many events, each of which might, in principle, be
foreseeable.
 Unforeseen uncertainty occurs in any project that pushes a technology envelope or enters a new or
partially known market.
for example;
Johnson and Johnson Baby care soap marketed as nonclinical soap .But lot of complaints have come against the
company regarding allergic of baby care products which possess a threat and unforeseen uncertaint.
Chaos
Whereas projects subject to unforeseen uncertainty start out with reasonably stable assumptions and goals,
projects subject to chaos.
 Even the basic structure of the project plan is uncertain, as is the case when technology is in upheaval or
when research, not development, is the main goal.
 Often the project ends up with final results that are completely different from the project’s original intent.
For example, in 1991, Sun Microsystems conceived of Java as software to drive a controlling device for
household appliances. It wasn’t until 1995 that Java became hugely successful as a programming language for
Web pages. Ironically, a decade after Java’s conception, we are finally seeing consumer-appliance applications
for it.

Creating Uncertainty Profiles

 The greater the uncertainty inherent in a project, however, the more the team may have to redefine the
tasks — or even the structure of the project plan — in midcourse.
 It is much easier to do that if everyone has begun the project with the same assumptions about how
changes will be managed.
 The mechanism that ensures agreement is the uncertainty profile — a qualitative characterization of the
degree to which each type of uncertainty may affect the project.
For example, although the dominant uncertainty an Internet startup faces may be chaos (for example, the
potential for fundamentally changed circumstances), it also may face variation (IT implementation taking longer
than planned), foreseen uncertainty (market entry by a competitor) and unforeseen uncertainty (human-resource
issues).
 The uncertainty profile is the team’s subjective estimate and indicates which uncertainty types are
potentially the most important.
 To help identify the dominant uncertainty types, teams may use hunches based on previous projects or
may adopt more formal approaches, such as statistical analyses, technology and market forecasts,
scenario planning or creativity-management techniques.
 Teams draw from many sources to create the profile. Its form is not as important as its purpose — to
ensure that everyone understands the major uncertainty types faced and how each uncertainty type
influences management style.
Once a profile is created, it can be used to build a project infrastructure to execute a plan (in the case of variation
or foreseeable uncertainty) or to learn from events and adjust (unforeseeable uncertainty or chaos). 3 The project
manager’s role and the planning and monitoring activities change as the uncertainty profile evolves. So
flexibility — and the ability to communicate changes — is key.
MANAGING VARIATION :
Managing Variation
 In projects subject primarily to variation, the project manager is first and foremost a troubleshooter who
can identify deviations and push through solutions to get the project back on track.
 Radical changes to the plan are not the concern as much as how to control slippage in the budget,
schedule and deliverables.
 If no one has planned for variation, the project manager must resort to firefighting to get the project back
on track — a waste of resources and a drain on stakeholders.
 A better approach is to account for variation during project planning and build in buffers at strategic
points in the project .
for example,
 increased capacity or budget reserves.
 Top management must respect those buffers and avoid treating them as bargaining chips to be negotiated
away.
 Once the critical path is established and appropriate buffers are defined, managers need
procedures for monitoring progress and authorizing changes in the project plan, such as
expediting certain tasks
 Formal methods such as statistical control charts let managers monitor variations without
identifying the small, underlying causes.
 They can track performance variables —such as days ahead of or behind schedule, or differences
between the budgeted and current project cost.
 As long as the variable stays within an acceptable range, no action is needed. But once it falls
outside the range, managers must identify causes and take action.
 The project team must have the ability and authority to react, for example, by shifting suppliers’
and subcontractors’ intermediate delivery dates.
 Reacting to significant deviations is more effective than monitoring every small critical-path
variation in an endless battle to stay the course.
EXAMPLE:
 The Mobile Systems Unit (MSU) of Taiwan computer maker Acer learned the importance of that
principle in its development and manufacture of PC notebooks.
 Notebook development happens under extreme time-to-market pressure, and in 1998, MSU development
cycles had shrunk to eight months.
 Missing the market introduction window by only one month on a given model virtually eliminated the
unit’s profit potential for that model.
 MSU saw that missed introductions were due to significant schedule variations with multiple causes.
 Vendors would occasionally not deliver sufficient volumes of a promised new component on time.
 Major customers such as IBM would change their requirements.
 Design problems with the motherboard would cause an additional design loop.
 Negotiations among multiple parties might change internal specifications.
 Relentless pressure on the engineers and insufficiently documented procedures would lead to shortcuts in
testing, causing major rework at a more costly stage.
 Acer attacked the multiple causes on multiple fronts.
 First, MSU management created buffers in the form of slack capacity by killing two projects that were
already delayed.
 That wasn’t easy, because one project was to be a top-of-the-line model and the decision to kill it was
hotly contested.
 (The controversy ultimately prompted Acer to adopt a more focused market-segment strategy.) MSU
then concentrated on improving the way it documented operating procedures so that it could increase
testing coverage and facilitate training of young engineers.
  Those steps reduced the number of correction loops during product development and improved the
quality of the company’s manufacturing ramp-up.
 Acer also concentrated the responsibility for product specifications in one group, reducing negotiation
loops and internally caused specification changes. Over the next two years, MSU more than doubled its
sales and gained significant market share.
Managing Foreseen Uncertainty
 In projects with major sources of foreseen uncertainty, project managers must first identify events that
could affect the project.
 The task could be as simple as making a list of risks or opportunities and identifying different courses of
action to deal with events as they materialize.
 Although critical-path methods are still good for handling complexity, there also must be some way to
represent the potential influence of foreseen uncertainties.
 The decision tree — a graphic that helps managers to consider and communicate the effects of early
decisions on later uncertainties and thus on later decisions — is a useful approach.
 Each branch of the tree represents a contingency plan for a major foreseen uncertainty.
 To track projects featuring unforeseen uncertainty, teams must monitor not only which activities are
complete, but also which branch of the decision tree has materialized.
 The manager shifts from master scheduler and troubleshooter to reactive consolidator of what the team
has achieved so far.
 With unforeseen uncertainty, managers must ensure all parties know the contingencies and, from the
project’s outset, buy into the alternative plans and outcomes.
 During the project, managers must constantly monitor all risks and communicate them to stakeholders.
 It is dangerous to ignore foreseen uncertainty.
for example.
 Consider the case of the pharmaceutical company Alpex (not its real name), which launched Nopane in
Germany in 1995. Nopane was an effective painkiller with blockbuster potential.
 The company knew of several life-threatening potential side effects, which it carefully controlled and
ultimately eliminated during clinical trials. One less dangerous side effect was low blood pressure to the
point of dizziness and fainting.
 Patients could avoid that effect if they kept their pulse rate below 120 beats per minute for five days after
taking Nopane.
 Unfortunately, many patients ignored the warning. After 700,000 packets of Nopane were sold in the
first six months, 500 fainting cases — a few of them well publicized — occurred because patients
exercised too soon after the drug had controlled their pain.
 The German health agency ended up restricting the drug to a small niche, and Alpex lost the chance to
market a blockbuster.
 Alpex could have used more-disciplined management in introducing Nopane.
 The company had seen signs of irresponsible patient behavior and fainting in the U.S. trials and also in
China, where the drug was introduced in 1993, but certain stakeholders argued against the relevance of
the U.S. and Chinese experiences to the German market.
 Alpex developed no formal contingency plans for the low-blood-pressure effect.
 Also, Alpex marketed to doctors, which clouded its vision of the behavior of real customers — patients.
Moreover, an organizational rift stunted effective oversight, and early warning systems broke down.
 High expectations and rigid managerial systems kept the company from fully responding to what should
have been anticipated.
 When the German health agency discovered there had been signs of the side effect during clinical trials,
it reacted strongly.
 That was the end of Nopane’s large-scale potential.
 If stakeholders had agreed on a contingency plan for non-threatening side effects — perhaps testing the
drug outside the hospital under more realistic conditions of patient behavior —the causal link between
exercise and fainting would have been harder to ignore.
Managing Unforeseen Uncertainty
 Unforeseen uncertainty makes contingency planning more difficult because the project team cannot
anticipate everything.
 Because it is impossible to create a complete contingency plan, the plan must evolve as the project
progresses. Teams must go beyond mere crisis management and continually scan for emerging
influences — either threats or opportunities.
 When enough new information arises, they must be willing to learn and then formulate new solutions.
 To deal with unforeseen uncertainty, project managers must move from troubleshooting to opportunistic
orchestrating and networking.
for example.
 the manager of the Ladera Ranch earth-moving project in California notes, “Fifty percent of my job is
managing relationships with our subcontractors, regulatory agencies and landowners.
 Thirty percent is scanning the horizon more than three months out to identify potential problems while
we can still do something about them.
 The final 20% is driving to the site and keeping track of what is really happening.” Tools such as Gantt
charts — graphical representations of the exact timing of all project activities — are inadequate. As the
team manager observes, “A Gantt chart is more a reflection of what happened last week, and what
someone hopes will happen next week.”
 The Ladera Ranch team moves millions of cubic yards of dirt for independent builders in Southern
California needing house pads, streets, water runoff, landscaping and utilities.
 The major objective is to plan the cuts and fills in a way that moves dirt the shortest distances possible.
 Although geological studies exist, the moisture level and exact soil type are unpredictable.
 That’s a problem because moist earth requires more excavation and takes longer to settle before anyone
can build on it.
 A project team might opt to dry the dirt rather than delay selling lots.
 Also, some soil types may require different slopes for stability and that can affect the amount of flat area
available for houses and streets.
 The Ladera Ranch team is forced to deal with unforeseen uncertainty.
 The number of scenarios proliferates with the number of locations considered.
 The team could, in theory, handle that problem as a series of foreseen uncertainties, building a
contingency plan for each scenario. (“If soil is moist and type X at location Y, use Plan A. If it is dry and
type Z, use Plan B.” And so on.) However, that rapidly becomes infeasible because of the
interdependence of cuts and fills across locations. Sometimes, markedly unexpected events — such as
the discovery of prehistoric Indian ruins or a rare animal or plant species — can alter the operation
completely.
 The Ladera Ranch project-management team is run on principles its project leader saw firsthand in the
U.S. Marine Corps: “Every play we run,” he says, “is an option play.
 I want my people to be able to make decisions in the field without having to report back to me every time
something comes up.”
 The team meets weekly to discuss whether the project or target path will change and, if so, how.
 The approach ensures that team members view unforeseen uncertainties as incrementally solvable
problems, not roadblocks or rationales for underperformance.
 With unforeseeable uncertainty, a lot of time and effort must go into managing relationships with
stakeholders and getting them to accept unplanned changes.
 Stakeholders often dig in, so much of the manager’s job is to anticipate and soften resistance by creating
flexible contracts and keeping stakeholders well informed. Top-management support, negotiation
techniques, team-building exercises and the project manager’s charisma can help resolve conflicting
interests.
 The project management team at Ladera Ranch has worked hard to share subcontractors’ risk,
recognizing that taking advantage of a supplier today limits flexibility tomorrow.
  The relationship is characterized by trust and relieves both the management team and the subcontractors
of having to anticipate every little event.
 Without such trust, no subcontractor would cooperate until the project team had drawn up a formal
contract — a barrier to handling unforeseen events. A high degree of flexibility is difficult to obtain and
often is received unenthusiastically.
Managing Chaos
 Even greater flexibility is required in managing projects subject to chaos.
 The management team must work with conceptual models that may be redefined repeatedly as feedback
spurs learning.
 Contingency plans are insufficient because learning may cause a fundamental change in the project
structure, which in turn requires redefining the entire project.
 To keep the chances of success high enough, teams must be willing to try fundamentally different
approaches, either in series or in parallel.
 Tracking is less focused on the current status of the project relative to its target and more on the current
status of learning about basic project assumptions.
 The need for flexibility and iteration obliges project managers to cope with constant change.
 They become entrepreneurs — developing and maintaining close but loose contacts with customers and
opinion leaders.
 In projects characterized by chaos, team managers must have a high degree of autonomy. They must
continually verify the original project idea, quickly run experiments to collect feedback on new ideas and
consolidate what they learn. Rapid prototyping is one way to support such an experimental approach. 6
 However, autonomy must be in balance with organizational discipline. Companies must be ruthless in
cutting projects when the chance of success becomes too small.
 Changing the project’s basic concept requires the involvement of the organization’s leaders and may
force them to make major decisions about what resources to commit and how to set targets.
for example.
IhrPreis.de, a German Internet company launched in 1999, wanted to use the Priceline reverse-auction business
model (which cannot be patented in Europe).
 Despite numerous changes in the selling process to accommodate the preferences of the German
consumer, the company could see by mid-2000 that the consumer-auction boom was faltering.
 Knowing that it could not survive on customer-driven pricing alone, it developed software services for
industrial customers and an Internet-based ticket search engine for travel agents.
 In 2001, the search engine, which dynamically optimizes offers from multiple airline-reservation
systems, had become the most promising of the company’s offerings.
 IhrPreis.de successfully navigated chaotic uncertainty, but there were painful points along the way. One
investor commented, “How can they change the business model this much? It’s like we gave them
money to develop a sausage factory, and now they tell us they have moved into building fighter planes.”
Fortunately, the project managers knew that to survive they would have to do more than control a few
identifiable risks or bring a schedule into line. Had the company not recognized the chaotic market and
taken the steps to deal with it, its evolution would have floundered.
 That much discipline will strain even the most trusting relationships.
 Tying in partners through contracts or dedicated assets may backfire if a radical change nullifies
partners’ participation.
 For projects in chaotic environments, painful redefinitions are inevitable. Successful partners typically
are those that share a long-term vision of the project’s mission.
 The Circored project — a collaboration of U.S. ore provider Cleveland-Cliffs and Lurgi Metallurgy
GmbH — provides an object lesson.
 Cleveland-Cliffs wanted to develop a new market, delivering directly to steel plants rather than to
dealers, and Lurgi had technology that though unproven appeared to be a breakthrough.
 The Circored project started in 1995 with Cleveland-Cliffs, Lurgi and a third partner making plans to
build a plant in Trinidad.
  It soon became clear that Lurgi’s new technology would not meet expectations and would have to be
fundamentally changed.
 As market prices for the product collapsed, the third partner pulled out. Cleveland-Cliffs and Lurgi
wavered.
 They agreed to continue only after an elaborate trust- and team-building effort.
 Lurgi’s efforts to rethink the technology finally bore fruit in March 2001.
 The plant began to produce volume and now has business potential, although world market prices are
still down.
 One manager reflected, “Why did we all agree to go through this pain? Only because we all
underestimated what was ahead of us.
 The risks we thought we were facing turned out to be irrelevant; the problems that did hit us were
unexpected; and the outcome was different from the original idea.”

9. Enumerate the steps involved in allocation of Scare Resources?

 ALLOCATING SCARE RESOURCES-LAND,LABOUR AND

CAPITAL
 Only limited number of resources-Workers,machine,factories,raw material.(No
of different ways it can be used)
E.g: If have Limited supply of Water-Do you drink , take shower,
Water the grass.
E.g: People have limited amount of money- lot of needs and wants
to satisfy
With Rs.3000 – can you buy Food or pay
rent.
E.g: Government –Limited amount of money

Does it pay for schools, social security, military spending or road repair.
Problem arise-because of resources are scarce, human wants are unlimited.
This analysis takes into consideration –accounting cost, economic cost,
opportunity cost and other costs of resource n goods n service.
Allocation of resources is a central theme in economic show resource are
allocated and associated with economic efficiency and maximization of utility.

STEPS in Allocation of Scare Resources:

1. Know Your Scope
determine the scope of the project -----?big or small project, long or short?

 Then Take the right decision on what resources needed and how many of them are
necessary to complete the project.
 The clearer the project scope is, the better to figure out how to allocate your resources.
Therefore, take the time to get the full picture of the project prior to doing any resource
allocation.
2.Identify resources:
  the scope of the project, it’s objective and the tasks necessary to get the work done on time and within
the budget approved, now you have to get your resources together.
 So, see who’s currently available, what equipment you’re going to need or purchase and where are you
going to perform the tasks for this project, and is that space available.
 Before you can allocate resources, you have to have them. So, make a list using the criteria above and
then make sure it fits within the budget allotted for the project.

3. Don’t Procrastinate
 Waiting until something has gone awry means you have to scramble to get it back on track, if that’s even
possible.
 It’s inevitable that resources will need reallocation. What plan have you ever created that was set in
stone? Therefore, in the planning process you should take some time to research where and when you
might have a blocked team member or task dependencies.
 By setting up a resource plan and noting these red-flag warnings, and more importantly figuring out how
you’ll respond to them, beforehand, you’re prepared to handle them when they arise. And they’ll always
arise.

4. Think Holistically
 It’s a problem when you’re so focused on process that you neglect to lift your head up from the project
plan to note what is actually happening.
 This isn’t merely checking your estimates against actual progress in the project, though that is important,
too.
 What you must always be aware of is the state of your resources. For example, what is the schedule for
your team, are any taking vacation time, are they sick, etc.? Also, what is the duration of the lease for site
or equipment?
 Don’t let any of these details get past you because of tunnel vision. Look at the whole project, not just
the various pieces, as captivating as it can be to lose oneself in project metrics.
5. Track Time
 Every job to make sure that a task that can be completed in a day doesn’t take a week. There are ways
to improve time tracking.
 To do this you must keep track of your team’s workload. That requires the right tools to give you real-
time data collected on one page where you can both see and schedule ahead when needed.
 With a dashboard tool, you can see whether your resources are properly allocated and, if not, easily
reschedule them. That way you can balance the workload and run a more efficient project.

6. Use Tools
 Speaking of tools, project management software is a great asset to managing your resources more
productively. With an online tool, you get project data instantly updated.
 You can see where your resources are allocated across a calendar that is color-coded to note whether
they’re on- or off-task, on vacation or sick. Rescheduling to help a team member who is overtasked is a
simple click of the keyboard.
 You can also set up notifications, so when a task is running behind you know about it before it becomes a
problem. And you can automate email notifications to keep team members on schedule without
micromanaging them.
7. Don’t Over-allocate
 Many managers over-allocate, whether because of poor planning or an inability to say no, which doesn’t
help. Instead of bringing in the project on time and within budget, over-allocation threatens team
burnout.
 Be honest.
 If so, stay vigilant and avoid it. If you don’t, there’s a good chance you’ll tarnish team morale and the
quality of their project work.
 It’s unfair to expect so much from your resources that they break. Re-examine your resource plan and
make use it allocated the resources you have for the project evenly.
8. Be Realistic
 While it’s good practice to be prepared for issues that might arise in your project, you don’t want to hog
resources by adding too many people or days to your schedule.
 When you do this, you’re skewing the project estimate and messing with the effectiveness of long-
term planning. It’s going to take from your bottom line.
 Remember when we mentioned comparing your estimated to actual utilization? This is where that
process helps keep you properly allocated. Using a tool, like we noted above, is also key to getting an
accurate sense of how the project is going.
9. Have a Routine
 As a manager, you plan and then you execute and monitor. It’s all very structured. But sometimes things
like resource allocation falls through the cracks, which is only going to come back and haunt you.
 Therefore, you want to set up regular check-ins, say a specific day and time every week, to go through
your resources, check your PM tools and make sure no one over-tasked for the week’s work ahead.
 Another thing you can do is speak with your team members, get a sense of what’s going on with them on
the front lines of the project, ask if they have any issues. By setting up a routine check-in and keeping
updated by your PM software, you get a clear sense of your resources.
10. Know Your Resources
 You can’t manage what you don’t know. You should know the experience and skills and personality very
resource that you’ve tasked or allocated to support the project.
 For example, you should create a profile for each of the members of your project team. What are their
skills and experience? The more you know about them, the better you’ll be able to place them in the
project and assign tasks which they can best perfor
 10.What are objectives of Cost Estimation and improvement.
Cost estimate is the approximation of the cost of a program,project or operation.
The cost estimate is the product of the cost estimating process.Cost estimation is the process of determining
how a particular cost behaves.
Definition: the summation of individuals cost elements, using established methods and valid data, to estimate
the future costs of program, based on what is known today.- US govt accountability office(GAO).

A cost estimate has a single total value and may have identifiable component values.
In the US there were 185,400 cost estimators in 2010.

Cost estimating is one of the three activities performed in project cost management.
 In Cost engineering: it has capital investment cost estimation and operating cost estimation,
with fixed capital and working capital.
 In System: cost estimate to evaluate the required funding and compare with bids or tenders
 In Construction: cost estimate to prepared to submit a bid or tender to compete for a contract
award
 In Facility maintenance and operation: cost estimate is used to establish funding or budgets.

COST ESTIMATE TYPES :

Major areas include:
 Construction cost
 Manufacturing cost
 Software development cost
 Aerospace mission cost
 Resources exploration cost
 Facility operation cost
 Facility maintenance and repair cost
 Facility retirement cost
 Facility rehabilitation and renewal cost.
COST ESTIMATE CLASSIFICATIONS:
1. Order of magnitude (Class :5) :
 An order-of-magnitude estimate is prepared when little or no design information is available
for the project.
 It is called order of magnitude because that may be all that can be determined at an early
stage. In other words, perhaps we can only determine that it is of a 10,000,000 magnitude as
opposed to a 1,000,000 magnitude.
 Various techniques are employed for these estimates, including experience and judgment,
historical values and charts, rules of thumb, and simple mathematical calculations. [38] Factor
estimating is one of the more popular methods. This involves taking the known cost of a
similar facility and factoring the cost for size, place, and time.
 Cost modeling is another common technique. In cost modeling the estimator models the
various parameters of the facility and applies costs to the derived scope.
 Building estimators or architects may use the Uniformat system of breaking down the
building into functional systems or assemblies during the schematic design (SD) phase of
 planning and design. The RS Means Square Foot Costs book organizes building costs according
to the 7 divisions of the UNIFORMAT II classification system.
 The 7 divisions are:

 A Substructure
 B Shell
 C Interiors
 D Services
 E Equipment & Furnishings
 F Special Construction
 G Building Site Work
o
2. DEFINITIVE (CLASS 1):

 A definitive estimate is prepared from fully designed plans and specifications (or nearly so), preferably what
are called contract documents (CD).
 The contract documents also establish the Scope of Work (SOW).
 The standard method is to review and understand the design package and take off (or perform a quantity
survey of) the project scope by itemizing it into line items with measured quantities.

RS Means refers to this as, "Scope out the project," and, "Quantify."
 3. Preliminary :
Budget estimate is used to allocate money into an organization’s budget.
a. Many organisation develops budgets at least two years into future.
i. Budgetary estimates are made one to two years prior to project completion.
ii. Accuracy of budgetary estimates is typically -10 % to completion.
iii. A budgetary estimate that actually costs $100,000 would range between $90,000
to $125,000

COST ESTIMATE MODELS:

 Mathematical algorithms or parametric equations used to estimate the cost of a product or project.
 Results of models – obtain approval to proceed and are factored into business plans,budgets, and other
financial and tracking mechanisms.
 Algorithms are computerized.(They may be standardized or proprietary depending on the type of
business, product, project in question.
 Input parameters (attributes of product, physical resource requirements) and output variable resources
requirements (cost and time)
 Cost estimate includes all details associated with completing a project or program.
 Estimate includes – all materials used, estimated quantity and unit price for each. Preliminary cost
estimates –infrastructure projects –planning, environement documentation .
 Cost estimates for non-infrastructure – consider all anticipated pay items and expenses related to the
activity.
 Typical applications include:
o Construction
o Software development
o Manufacturing
o New product development

ESTIMATE QUALITY:
 Refers to fulfillmentness of quality requirements for the estimate and accordance with formal
quality assurance.
 Published requirements generally have to do with creditbility ,accuracy,confidence level,
precission ,risk,reliability and validity of estimate as well as thoroughness,uniformity
,consistency ,verification and documentation.
 Cost estimate is the approximation of cost of a project or operation , then estimate accuracy is a
measure of how closely the estimate is able to predict the actual expenditures for project or
operation.This can be only know after the project is completed .Example: project estimate was
$1252000 for a specific scope and condition s, at completion the records showed that
$1.172,452 was expended, the estimate was 6.8 % too high.
 If the project ended up having a different scope or conditions, an unadjusted computation does
not fairly assess the estimate accuracy.
 Predictions of the estimate accuracy may accompany the estimate.
 Estimate accuracy is traditionally represented as a +/- % range around the point estimate awith a
stated confidence level that actual cost outcome will fall within his range.Example : definitive
estimate might be that the estimate has s -5/+10% range of accuracy with a a 90% confidence
that final value will fall in that range.
 Accuracy of estimate is measured by how well the estimated cost compares to actual total
installed ost.
 Accuracy of an early estimate depends on four determianants:
1. Who was involved in preparing the estimate
2. How the estimate was prepared
3. What was known about the project
4. Other factors considered while preparing the estimate.
High quality estimates can be produced by rigot 12 steps outlined by US GAO.
 COST ESTIMATING METHODS AND BEST PRACTISES:

 ESTIMATE METHODS may vary by type and class of estimate.

 The method used for most definitive estimates is to fully define and understand scope, take off or quantify
scope and apply costing to scope which canthenbe summed to a total cost.
 Proper documentation and review is important
 Pricing tranforms the cost estimate into what the firm wishes to charge for the scope.
o Characteristcs of effective estimating include:
o Clear identification of task
o Broad participation in preparing estimates.
o Availability of valid data
o Standarsized structure for the estimates
o Provision program uncertainities,
o Recognition of inflation
o Recognition of excluded costs
o Independent review of estimates
o Revision of estimates for significant program changes
 Tools that may be part of costs estimation are cost indexes.
 Factors promote time adjustment of capital costs,following changes in technology,availability of materials
and labor and inflation

CONSTRUCTION COST ESTIMATES:

  A construction general contractor or subcontractor must normally prepare definitive cost estimates
to prepare bids in construction bidding process to compete for award of the contract.
 Earlier estimates are prepared by different methods by estimators and others to support the
planning process and to compare with bids.

 Reduce the risk of project cancellation or failure –get early accurate cost estimates.
 Total metrics specializes in quantifying software development projects early in their lifecycle and
using their functional size as input into software project resources estimates of effort, cost ,team
size and schedule. Industry project data sourced from ISBSG combined with the expert knowledge
base of knowledge PLAN to determine the likely productivity and quality of the project
 Functional size can be determined as soon as the business requirements are identified.
 Our project estimates use an independent “top down” method of estimating which complement the
standard “bottom up” work breakdown methodologies.
 Industry experience shows that functional size based estimates are much more accurate early in the
lifecycles of a project and can be completed in under 3 days of effort as compared to work
breakdown estimates which need detailed project information and take weeks to develop.

cost estimation methods that commonly use and sometimes used in mix term to have a complete and accurate
estimation for a project are as follow:
Expert Judgment Method, involve consulting with cost estimation expert or a group of the experts to use their
experience and understanding of the proposed project to arrive at an estimate of its cost.
Analogous (Parametric) Estimating means that you use the actual time frame from a previous, similar project
as the basis for estimating the time frame for the current project (Taylor, 2009). Comparing the proposed project
to previously completed similar project where the project development information is known. Actual data from
the completed projects are extrapolated to estimate the proposed project.
Top-Down Estimating Method also called Macro Model, an overall cost estimation for the project is derived
from the global properties of the software project, and then the project is partitioned into various low-level
components.
Budgetary Cost Estimating is used when more information is available and often called when financial
commitments must be made to new projects, or major changes to existing projects (Taylor, 2009).
Bottom-up Estimating Method , the cost of each software components is estimated and then combines the
results to arrive at an estimated cost of overall project.
Below tables describe and compare the strength and weakness of three cost estimation methods that
commonly used.

Each cost estimation methods has their own weakness and strength. The weakness in one could be the
strength in another, which made one methods is not better from the others. There is no right or wrong approaches
for methods of selection. The methods or techniques selected refer to the most suitable and fit to needs is simply
made by the estimator to have a better and closer estimated numbers to cost reality.