House

House Project
Project Crashing
Crashing

This
Thismodel
modelillustrates
illustrateshow
howRISKOptimizer
RISKOptimizercan
canbe
beused
usedwith
with@RISK
@RISKProject.
Project.The
Theproject
projectconsists
consistsof
o
Tasks
sheet.
Resources
have
been
assigned
to
the
tasks
in
Project,
as
indicated
in
the
Resources
Tasks sheet. Resources have been assigned to the tasks in Project, as indicated in the Resources
modeled
modeledwith
withPert
Pertdistributions,
distributions,using
usingthe
theparameters
parametersin
inthe
theModel
Modelsheet.
sheet.IfIfthe
thedecreases
decreasesin
incolu
col
they
are
now,
the
project
is
completed
in
the
"normal"
way.
If
you
run
the
simulation
with
these
they are now, the project is completed in the "normal" way. If you run the simulation with thesev
project
projectduration
durationisisabout
about133
133days
daysand
andthe
themean
meancost
costisisabout
about$58,000.
$58,000.However,
However,the
theproject
projectdur
du
because
of
the
uncertainty.
For
example,
there
is
about
a
40%
that
the
duration
will
exceed
135
because of the uncertainty. For example, there is about a 40% that the duration will exceed 135

The
Thecontractor
contractorisisunder
underpressure
pressureto
tocomplete
completethe
thehouse
housequicker.
quicker.To
Todo
dothis,
this,he
hecan
can"crash"
"crash"any
anyof
o
column
F
of
the
Model
sheet,
up
to
the
maximum
in
column
H.
In
this
case,
each
of
the
Pert
column F of the Model sheet, up to the maximum in column H. In this case, each of the Pertpara
para
explained
explainedin
inthe
thecell
cellcomment
commentin
incell
cellJ3
J3of
ofthe
theModel
Modelsheet,
sheet,this
thisresults
resultsin
inaapenalty
penaltycost
costfor
forexpe
expe
costs,
there
are
bonuses
for
the
contractor
if
he
finishes
stage
1
of
the
project,
and
both
stages
costs, there are bonuses for the contractor if he finishes stage 1 of the project, and both stageso
rows
rows17
17and
and18
18of
ofthe
theModel
Modelsheet.
sheet.Finally,
Finally,the
thecontractor
contractorwants
wantsaa95%
95%chance
chanceof
ofcompleting
completingthe
th
RISKOptimizer
has
been
set
up
to
minimize
the
mean
net
extra
cost
to
the
contractor
RISKOptimizer has been set up to minimize the mean net extra cost to the contractor(penalty
(penaltyco
c
deadline
deadlineconstraint.
constraint.

Two
Twoassumptions
assumptionsof
ofthis
thismodel
modelare
arethat
that(1)
(1)the
theadjustable
adjustablecells,
cells,the
thedecreases,
decreases,are
areallowed
allowedto
tobe
be
penalty
costs
are
linear
functions
of
the
adjustable
cells.
Both
of
these
assumptions
could
be
penalty costs are linear functions of the adjustable cells. Both of these assumptions could berela
rel
of
ofthe
themodel.
model.

Note:
Note: The
TheIndustrial
Industrialedition
editionisisrequired
requiredto
touse
usethe
theRISKOptimizer
RISKOptimizerand
andProject
Projectfeatures
featuresof
of@RISK.
@RISK

t. The
ct.
Theproject
projectconsists
consistsof
ofbuilding
buildingaahouse,
house,as
asindicated
indicatedin
inthe
the
dicated
in
the
Resources
sheet.
The
task
durations
are
all
dicated in the Resources sheet. The task durations are all
t. IfIfthe
et.
thedecreases
decreasesin
incolumn
columnFFof
ofthe
theModel
Modelsheet
sheetare
are0,
0,as
as
e
simulation
with
these
values,
you
should
find
that
the
he simulation with these values, you should find that themean
mean
However,
However,the
theproject
projectduration
durationcan
canbe
besignificantly
significantlylonger
longer
duration
will
exceed
135
days.
duration will exceed 135 days.

is, he
his,
hecan
can"crash"
"crash"any
anyof
ofthe
thetasks
tasksby
bythe
thenumber
numberof
ofweeks
weeksin
in
se,
each
of
the
Pert
parameters
decreases
by
this
amount.
ase, each of the Pert parameters decreases by this amount.As
As
nnaapenalty
penaltycost
costfor
forexpediting.
expediting.In
Inaddition
additionto
tothese
thesepenalty
penalty
roject,
and
both
stages
of
the
project,
by
the
times
indicated
project, and both stages of the project, by the times indicatedin
in
chance
chanceof
ofcompleting
completingthe
theproject
projectwithin
within135
135working
workingdays.
days.
he
hecontractor
contractor(penalty
(penaltycosts
costsminus
minusbonuses),
bonuses),subject
subjectto
tothe
the

eases, are
reases,
areallowed
allowedto
tobe
be any
anydecimal
decimalvalues,
values,and
and(2)
(2)the
the
ssumptions
could
be
relaxed
with
straightforward
modifications
assumptions could be relaxed with straightforward modifications

oject features
roject
featuresof
of@RISK.
@RISK.

ID

Task Name

Duration

Start

1 Build house

121 days

3/4/2013

89.9 days

3/4/2013

Stage 1

Build foundation

5 wks

3/4/2013

Build walls and ceilings

8 wks

4/3/2013

Build roof

6 wks

5/23/2013

Do electrical wiring

5 wks

5/23/2013

Do plumbing

4 wks

5/23/2013

62.3 days

5/23/2013

Install windows

3 wks

5/23/2013

10

Install drywall

3 wks

6/12/2013

11

Put on siding

4 wks

6/12/2013

12

Paint house

5 wks

7/11/2013

8
9

Stage 2

Finish

Predecessors

Resource Names

Cost

8/19/2013

$53,949.25

7/5/2013

$35,777.50

4/3/2013

Excavators

$6,885.00

5/23/2013

Builders

$7,150.00

7/5/2013

Roofers

$7,800.00

6/26/2013

Electricians

$7,702.50

6/21/2013

Plumbers

$6,240.00

8/19/2013

$18,171.75

6/12/2013

Window installers

$2,493.00

7/4/2013

Drywallers

$2,730.00

7/11/2013

Siding installers

$4,758.75

8/19/2013

11

Painters

$8,190.00

3/3/13

3/10/13

3/17/13

3/24/13

3/31/13

4/7/13

4/14/13

4/21/13

4/28/13

5/5/13

5/12/13

5/19/13

5/26/13

6/2/13

6/9/13

6/16/13

6/23/13

6/30/13

7/7/13

7/14/13

7/21/13

7/28/13

8/4/13

8/11/13

8/18/13

8/25/13

9/1/13

9/8/13

9/15/13

9/22/13

9/29/13

10/6/13

ID

Indicators

Resource Name

Type

Excavators

Work

Builders

Work

Roofers

Work

Electricians

Work

Plumbers

Work

Window installers

Work

Siding installers

Work

Drywallers

Work

Painters

Work

Material Label

Initials

Group

Max. Units

Std. Rate

100%

$300.00 /day

100%

$200.00 /day

100%

$250.00 /day

100%

$325.00 /day

100%

$300.00 /day

100%

$180.00 /day

100%

$225.00 /day

100%

$175.00 /day

100%

$300.00 /day

Ovt. Rate

Cost/Use

Accrue At

Base Calendar

$0.00 /hr

$0.00

Prorated

Standard

$0.00 /hr

$0.00

Prorated

Standard

$0.00 /hr

$0.00

Prorated

Standard

$0.00 /hr

$0.00

Prorated

Standard

$0.00 /hr

$0.00

Prorated

Standard

$0.00 /hr

$0.00

Prorated

Standard

$0.00 /hr

$0.00

Prorated

Standard

$0.00 /hr

$0.00

Prorated

Standard

$0.00 /hr

$0.00

Prorated

Standard

Code

Task duration distribution parameters (Pert)

Build house
Minimum
Most
Stage 1
Build foundation
4.00
Build walls and ceili
6.00
Build roof
5.00
Do electrical wiring
4.00
Do plumbing
3.00
Stage 2
Install windows
2.00
Install drywall
2.00
Put on siding
3.00
Paint house
4.00
Bonus parameters
Max duration
Bonus

Stage 1
90
$2,000

Bonuses & costs

Bonus 1
Bonus 2
Penalty cost
Net cost

$2,000
$2,500
$0
-$4,500

Cost for completing project

$53,949

likely

Maximum Decrease

5.00
8.00
6.00
5.00
4.00

8.00
12.00
9.00
8.00
6.00

0.00
0.00
0.00
0.00
0.00

3.00
3.00
4.00
5.00

5.00
5.00
7.00
9.00

0.00
0.00
0.00
0.00

Stages 1, 2
130
$2,500
Deadline constraint
Duration Deadline
121
135

Max decrease

Resource cost

Penalty cost

<=
<=
<=
<=
<=

2
3
2
2
1

$1,500
$1,000
$1,250
$1,625
$1,500

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

<=
<=
<=
<=

1
1
2
2

$900
$1,125
$875
$1,500

$1,250
$1,500
$1,300
$2,000

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

1.000
1.000
1.000

Percentile
95%