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 Construction Project Schedule Risk Analysis and Assessment Using Monte Carlo
Simulation Method
12 1 2
Dezhi Jin , , Zhuofu Wang , Xun Liu \ Jianming Yang , Meigui Han ,
1. Institute of Construction P roject Management, Hohai University,Nanjing, China
2. School of Engineering, Nanjing Agricultural University, Nanjing, China
jindezhi@njau.edu.cn
Abstract-Construction projects are initiated in complex and
dynamic environments resulting in circumstances of high
uncertainty and risk, which are compounded by demanding
time constraints. This paper describes an application of Monte
Carlo simulation method to consider and quantify uncertainty
in construction scheduling. This paper points out
importance of the construction project scheduling risk analysis
and assessment from the perspective of contractor and points
out the limitations of project management network techniques
(CPMlPERT). Based on analyzing the principle of construction
project scheduling risk analysis and assessment using Mote
Carlo simulation method, the evaluating steps of Mote Carlo
simulation method are given. Ultimately, the outcomes of the
paper are illustrated by an instance.
Keywords-construction project; scheduling risk; Me;
assessment
I. INTRODUCTION
In today's construction industry, the engineering
construction project, especially the large investment project,
often has huge investment, long construction period,
technological and economy risk, the great potential impact to
the ecological environment, uncertain factors. So these
characteristics incur that the factual project deviate from the
consequence that people expect by a certain degree. The
losses result from risks increasing with the size and
complexity of construction projects, even determine the
success or failure of the construction projects. The
preparation of the construction project schedule is primarily
based on engineering quantity and resources allocation,
construction quota and other factors. However, these factors
are uncertainty in actual construction. The objective of
project schedule, as one of the three control objectives,
affects the cost targets and quality targets. When the
construction project schedule risk occurs, the contractor in
order to rush the progress is bound to increase the human and
material resources, make the cost of the project will increase,
and the project quality is also easy to problems. When the
progress of the out of control, resulting in significant
schedule delays, so that the project can not be put into
production on schedule to benefit not only to owners to pay
the contractor the tender stated in the annex to the
corresponding amount as damages for breach of schedule
delay costs, but also seriously affect the company's
reputation, the company bid in the future rather than reactive.
In today's construction industry, one of the important
goals is the quantification and minimization of the
978-1-4244-6932-1/10/$26.00 ©2010 IEEE
12
uncertainty associated with construction development in
terms of time. When specifically considering the execution
of a construction project, controlling risks resulting from the
uncertainty is accomplished through the achievement of
reliable project schedules. In reality, failure to fulfill the
the
project objectives within cost and on time is quite common.
As a result of techniques, such as probabilistic scheduling,
and stochastic process (Monte Carlo simulation), being
systematically employed at the start of a project's
development, the uncertainty related to duration is
considerable due to the probability of future complicated
conditions and changing environments. One main concern of
a project manager or decision maker is not to exceed the
approved project's cost and schedule. Indeed, a project
risk control effort is devoted to ensuring that the actual cost does
not deviate from the planned cost and that the project is
completed on schedule.
II. LIMITATIONSOF CPM ANDPERT
A. Limitations o/CPM
The basic assumption of CPM is that each activity'S
duration as well as the logical relationships between
activities is determined in a network schedule. However,
there exist a lot of uncertainty factors such as politics,
economy, meteorological and hydrological conditions,
construction scheme, resource supply, construction
environment and so on, which may cause that construction
site conditions are difficult to be completely accurately
proven and that project implementation will be influenced by
storm, flood, typhoon, etc. These uncertain factors in the
construction project make both the durations of activities and
the logical relationships between them in highly uncertain
status.
Therefore, it is necessary for us to focus on how to
calculate the time parameters and determine whether the
construction project can be completed on time. When the
construction plan can not be realized, the so-called schedule
risk has been formed. As to this kind of network schedule
problem with uncertain activity durations, the basic salvation
methods include PERT and Monte Carlo (MC).
B. Limitations o/PERT
Based on mathematical statistics theory, PERT is often
used to solve network schedule problems with definite
logical relationships and uncertain activity durations. It is
simple, but still with some obvious deficiencies as follows:
597
 (i) It requests that activity durations should obey � the probability models of each random variance are
distribution or normal distribution and that the critical path's constructed, which are done sampling and then each
duration should obey normal distribution. When an actual activity's duration will be determined, this process is
project does not meet the conditions, the calculation equivalent to simulation for one time [7]. Every time when
precision will be obviously influenced. The activity durations doing an experiment, we use sampling technique fIrst and get
in PERT are assumed to be random and obey � distribution. the random data of activity durations, then we can calculate
Therefore, the activity durations can be estimated by three­ the random project duration r; with CPM. After simulating
point method [1]. It is mainly for the calculation convenience for N times, we can get random duration
to assume that the activity durations obey � distribution,
serialization {r; Xi 1,2,.··, N) , and then we make on the
=

which can be only determined by the most optimistic and the

most conservative time. Actually we can also assume the
durations obey triangle distribution, normal distribution or
Gamma distribution, etc. As long as you don't choose a very
extreme random variable, the random distribution of project
duration will not be influenced by it [2-3]. Under these
circumstances, as existing research shows, the project
basically obey normal distribution when there are no more
than 20 critical activities [4]. In PERT, after obtaining all the
activity durations, we can calculate the time parameters,
expected duration and schedule risk by CPM.
(ii) It does not take into account the interaction of paths
in the network diagram, so that the expected duration is
calculated relatively small while the variance is relatively
large. PERT undermines the probability characteristic of
activity durations, which results in low reliability in scheme
implementation. In fact, PERT needs several requirements
such as (a) the activity durations are independent random
variables and (b) only one path dominates while the other
paths will hardly become critical paths i.e. the probability
random values of project duration, and get its expected value
and variance as well as the schedule risk under required
duration. Z. Xu and Y. C. Feng made a statistical analysis on
the simulation results of total duration and obtained a
histogram, which was approximately regarded as the
probability density function curve of total duration [8].
C. Steps of schedule risk assessment using MC method
Based on the research results of Z. F. Wang and D. X.
Chen [9], we can get the general steps of schedule risk
assessment using MC method as follows:
(i) Determine the distribution type of activities, such as �
distribution, and determine the simulation times N .
(ii) Calculate the three time estimations of activity
durations, denoted as a, b and m .
(iii) According to the distribution of activity durations,
get the sampling time ui of each activity by sampling,
namely the random time Ui •

can be neglected. In practical projects, we may encounter

problems with considerations of several critical paths, for
(iv) Calculate the project duration 1; with CPM
which some people put forward several salvation algorithms. according to the sampling time of each activity U i •

In this respect, Bajis Dodin did some research [5-6].

(v) Repeat steps 3 and 4 and achieve {r; Xi = 1,2,.··,N)
III. ADVANTAGES, ApPLICATION PREMISE AND (vi) Make statistical analysis on {r;} and get the expected
CALCULATION STEPSOFMc METHOD value and standard deviation of duration.
(vii) Calculate the schedule risk using (1) and (2)
A. Advantages according to the known or assumed required duration.
MC method can overcome the shortcomings of PERT, it
is suitable for all kinds of distribution of activities, � O'n T2
5, Ts -Te) l
_e-2 dT
distribution is not a must. When the number of simulation is peT =
J (1)
_

big enough, the calculation result has high accuracy. When a u -00 .J27r
n
project has large scale or many activities, the computing
Pr =l-P (2)
quantity is large under a certain requirement of calculation
accuracy. What's more, when the accuracy requirement Where Ts is required duration, Te is the expected
increases one magnitude, the calculation quantity should
increase two magnitudes, which can be realized by computer. duration on the critical path, u is the standard deviation on
n
Clearly, with the development of computer technology, using the critical path, P is completion probability while Pr is
MC method to assess schedule risk of a project has obvious
the schedule risk.
advantage.
B. Basic principle to evaluate schedule risk with MC IV. CASE STUDY

method A certain schedule network graph is shown in Fig. 1, the

MC method assumes that each activity is randomly time estimations of activities in which are calculated as
independent. It is a computer simulation method suitable for shown in Table 1.
all kinds of distribution of activities. Its basic principle is to
do plenty of tests and statistical analysis on computer, firstly,

598
Figure 1. A Certain Schedule Project Network Graph

TABLE I. THE TIME ESTIMATIONS OF ACTIVITIES IN A CERTAIN SCHEDULE NETWORK GRAPH

Activity Optimistic duration (a) Most likely duration Pessimistic duration (b)
(i, j) (m)

1,2 8 10 12

1,3 4 5 6

1,4 4 7 9

1,5 4 5 6

2,3 4 5 7

2,6 16 18 20

3,4 2 4 5

3,7 3 6 9

4,7 2 3 5

5,7 7 8 9

5,8 7 9 10

6,7 14 16 18

6,8 2 3 5

6,9 3 4 5

7,8 6 9 11

8,9 9 11 13

8,10 3 5 8

8,11 2 7 12

8,12 3 5 6

9,10 3 5 7

9,13 17 19 21

10,11 2 4 6

10,14 2 4 5

Activity Optimistic duration (a) Most likely duration Pessimistic duration (b)
(i, j) (m)
11,14 2 7 9

599
 12,14 7 9 10

12,15 8 9 10

13,14 13 15 17

13,15 2 3 4

13,16 2 4 5

14,15 7 9 11

15,16 8 10 12

15,17 2 5 8

15,18 3 7 12

15,19 4 5 6

16,17 2 5 6

16,20 16 18 20

17,18 3 4 6

17,21 3 6 9

18,21 2 3 5

19,21 7 8 9

19,22 7 9 10

20,21 14 16 18

20,22 2 3 5

21,22 8 10 12

Due to determine the critical path need to calculate the

latest finish time (LF) and the earliest fmish time (EF), the
latest start time (LS) and the earliest start time (ES) of each
activity, the progress is complex. For the sake of brevity, by
a simple transformation, network diagrams by solving the
critical path conversion For the sake of the shortest path, and
use the Dijstra algorithm, and then the shortest path is
converted to the critical path [10]. Use the tool of MATLAB
calculates the expected duration and variance of project, the
flowchart as shown in Figure 2.

600
 Determining the times of simulation
Acquiring the parameters of each activity for the
construction project
Constructing the adjacency matrix of critical path
according to the parameters of each activity
Transforming the adjacency matrix of critical path
into the matrix of the shortest path
Calculating the shortest path of project network
using the algorithm method of Dijstra
Transforming the shortest path into critical
path, obtain the total duration of project
NO
Calculating the expected value and variance of
total duration for project
Figure 2. Simulation flow chart of the progress of the project
The results of simulated 10000 times are shown in Table
2 and Fig. 3.
TABLE II. The DURATION and variance of project SIMULATED 10000
TIMES
Simulated times Mean (day) Variance (day)
10000 160.8467 2.3670
Figure 3. The line of chart total duration simulated 10000 times
If the schedule of the construction be simulated 10000
times, can be obtained the mean of construction project
duration is 160.85 days, and the variance is 2.37 days. Given
a required time limit, the probability of completion and the
601
schedule risks can be calculated accordingly. For example,
when the regulated duration of schedule is 155 days, the
completion probability is 0.68%, and that is to say, the risk
of project can not be completed on time is 99.32%.
V. CONCLUSIONS
MC method is a kind of numerical calculation method; it
can only give a feasible solution to the problem, but not a
general solution. In order to get the optimal solution or
satisfactory solution, we need to carry on multiple
simulations. MC method determines the numerical relation
between variables through mathematical models, but not by
peer mathematic method. It is a kind of method to solve
problem by experiment on computer. It can give the fmal
solution to the model test, but cannot get some intermediate
results. In the simulation process of project schedule risk, we
can get some parameters related with project duration, but
cannot get the detailed time parameters of each activity. MC
method requires that each random variable should be
independent. The whole simulation process is a repeated
operation process. The calculation needs to occupy much
computer memory and burden.
ACKNOWLEDGMENT
This paper is supported by agricultural machinery bureau
of Jiangsu province foundation, P roject Number: gxs08007
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