PROJECT PLANNING UNDER UNCERTAINTY
USING SCENARIO ANALYSIS
ABSTRACT
An important component of risk manage-
ment relates to project schedule uncer-
tainty. To address this issue, a scenario
(i.e., macro-level approach) for modeling
and analyzing projects with significant
uncertainty in their network structure
and/or durations of some activities is pre-
sented. This approach requires that a set
of project network scenarios is able to be
identified, each with an assessed proba-
bility of occurrence. These scenarios
might differ according to the results of
uncertain events that could occur during
the course of the project, uncertain activi-
ty durations (whether independent or
dependent), finite loops where repeated
activities can have different durations, or
a combination of these. Advantages of our
approach include the use of standard
methods and software, as well as greater
accessibility to, and likelihood of, the use
of uncertainty analysis in project plan-
ning. Several examples are used to illus-
trate the suggested approach.
Keywords: Project scheduling; risk man-
agement; project network analysis
©2005 by the Project Management Institute
Vol. 36, No. 1, 15-26, ISSN 8756-9728/03
*corresponding author
BRUCE POLLACK-JOHNSON, Department of Mathematical Sciences
Villanova University, Villanova, PA
MATTHEW J. LIBERATORE*, Department of Decision and Information Technologies
Villanova University, Villanova, PA
Background
isk management is one of the nine Knowledge Areas within the Project
R Management Institute’s A Guide to the Project Management Body of
Knowledge (PMBOK® Guide) (Project Management Institute [PMI],
2000). An important component of risk management relates to project sched-
ule uncertainty. Traditionally, project schedule uncertainty has been addressed
by considering the uncertainty related to activity duration. The most well-
known technique is Program Evaluation and Review Technique (PERT), devel-
oped by the U.S. federal government in the late 1950s (Malcolm, Rosenboom,
Clark, & Fazar, 1959). PERT models uncertain activity durations by collecting
optimistic, most likely, and pessimistic duration estimates of all activities.
Although PERT is sometimes used to estimate the expected length of the crit-
ical path, Monte Carlo simulation is more commonly used to estimate the
criticality of different activities and paths, as well as the probability distribu-
tion of the project duration.
The importance of addressing uncertainty related to activity duration can
be seen by considering the results of surveys regarding available project man-
agement software and practitioner use of project network analysis methods.
For example, a 1999 software survey by the Project Management Institute
showed that about 20% of project management software packages had Monte
Carlo simulation capability (PMI, 1999). Also, a more recent survey of proj-
ect management professionals (Pollack-Johnson & Liberatore, 2003) found
that nearly 70% of the respondents used critical path analysis, and 17% used
probabilistic analysis and/or simulation within project management software.
However, project management professionals responding to this survey also
reported a need for research on how to better address uncertain network struc-
tures (Pollack-Johnson & Liberatore, 2003).
Uncertain project network structures can arise in a variety of ways. For
example, in a new product or process development project, it may be uncer-
tain whether quality requirements will lead to one or more re-work cycles. In
a new technology-implementation project, it may be uncertain whether for-
mal staff training activities are required. In a research project, depending upon
the results obtained in the first stage, different sequences of activities may fol-
low. In a pharmaceutical development project, additional testing may be
March 2005 Project Management Journal • 15
required if certain pending legislation
passes.
Simulation packages such as the
Graphical Evaluation and Review
Technique, or GERT, (Pritsker & Happ,
1966; Wiest & Levy, 1977) were devel-
oped to model some probabilistic net-
works similar to the examples
presented above. Even when GERT was
produced and supported, however, it
assumed that repeated activities within
loops had identical duration distribu-
tions (i.e., the same average duration
for each repetition) (Neumann, 1990).
It also assumed independence of dura-
tion distributions (i.e., the time one
activity takes does not influence the
time another takes). The approach we
propose in this paper can handle all of
these situations. GERT is no longer
produced and supported, but many of
its capabilities are now available in
related, general-purpose simulation
software packages called Visual SLAM
and AweSim (Pritsker & O’Reilly,
1999). These packages enable the user
to develop GERT-type project simula-
tion models, but are not specifically
designed for project management as
GERT was, can be difficult to use, and
become even more challenging as the
project network size and complexity
increase.
In addition, the simulation
approach itself is micro-oriented,
since it models the uncertainty at the
activity level. There are situations
where the uncertainty is related to dif-
ferent sequences or combinations of
events occurring or not occurring,
such as in the pharmaceutical pending
legislation example, and, therefore,
can be conceived as relating to differ-
ent project scenarios rather than indi-
vidual activities.
For these reasons, a simpler
approach is needed when there are
important project network uncertain-
ties that must be addressed as part of
the project risk analysis and assess-
ment process. Existing methods are
especially inadequate for loops where
repeated activities do not have identi-
cal duration distributions; for depend-
ent duration distributions; and for
obtaining detailed and summary
(expected) early/late start/finish times,
16 • Project Management Journal March 2005
criticalities, and total slack (float) val-
ues for individual activities, as well as
for common or aggregated activities
across probabilistic branches or within
loops.
The purpose of this paper is to
present a scenario, or macro-level
approach, for modeling and analyzing
projects with significant uncertainty in
their network structure and/or the
durations of some activities. This
approach is applicable for project
schedule risk analysis and contingency
planning. An advantage of our
approach is the use of standard meth-
ods, such as critical path analysis and
probability analysis, and popular soft-
ware packages, such as Microsoft
Project® and Excel®, to solve project-
planning problems with uncertain net-
work structures. The benefits of our
approach are its ability to identify the
same activities in different scenarios
and summarize results for them over-
all, with modest data requirements,
greater simplicity, and comprehensi-
bility. This would lead to a greater like-
lihood of the use of uncertainty
analysis, and some additional insights
into the impact of uncertainty.
First, we present our scenario
approach. Next, some examples of
uncertain networks are presented and
analyzed using our approach.
Conclusions and suggestions for future
study follow.
Project Networks and the Critical Path
A traditional project network in
Activity on Node (AoN) form is
defined as a set of nodes representing
activities that are connected by direct-
ed arcs to represent precedence rela-
tionships. If one activity must occur
directly before a second activity, we say
that the second activity is an immediate
predecessor of the first. Cycles (loops) of
activities within the project network
are not allowed. We assume that there
is only one activity without predeces-
sors (possibly an artificially construct-
ed dummy activity) and is called the
start activity. We also assume that there
is only one activity without successors
(possibly a dummy), which is called
the finish activity. If the original proj-
ect network does not have unique start
or finish activities, we add dummy
activities (with zero duration) for this
purpose.
The length of the longest (but not
necessarily unique) path from the start
activity to the finish activity is the min-
imum project completion time. Such a
path is called a critical path, the activi-
ties along it are called critical path activ-
ities, and we will denote the length of
the path as LCP.
Let us define:
j
activity j
aj = activity j
Pj = set of all immediate
predecessors of activity j
ESj = earliest possible start
time for activity j
EFj = earliest possible finish time
for activity j
LSj = latest possible start time
for activity j (that would not
delay the project finish date)
LFj = latest possible finish time
for activity j (that would not
delay the project finish date)
TSj = total slack for activity j
(the time it could be
individually delayed without
delaying the entire project)
The critical path can be deter-
mined by performing forward and
backward passes through the project
network. The forward pass includes
computing the earliest start (ES) and
the earliest finish (EF) times for each
activity, while the backward pass
requires computing the latest start (LS)
and latest finish (LF) times. Once both
passes are completed, the total slack
(TS) for each activity can be computed.
The total slack of each activity is the
difference between its ES and LS.
Any path from the start activity to
the finish activity consisting only of
activities with a total slack of 0 is called
a critical path. Any activity with a total
slack of 0 is called a critical activity,
since any delay in that activity alone
will delay the whole project (the soon-
est it can be completed) by the same
amount of time. We say that a critical
activity has a criticality of 1, and any
other activity has a criticality of 0.
The Scenario Approach
In this paper, we focus on a sce-
nario approach for analyzing uncertain
project networks. The uncertain net-
work structure is expressed through a
set of network scenarios, each having a
specified probability of occurrence. For
example, if a finite loop is present, the
problem cannot be represented direct-
ly using the standard project network
described in the previous section.
However, using a network scenario
approach, a set of project networks
without loops can be constructed and
analyzed using conventional tech-
niques. A similar approach can be used
when considering probabilistic
branching.
In what follows, we initially
assume that the activity durations are
known with certainty, although the
approach presented can be easily
extended to the case of probabilistic
durations, especially if only a limited
number of activities have significant
uncertainty in their durations.
Let us define:
i
network scenario i
N(i) = network scenario i
p(i) = probability of network
scenario i
oj = probability that activity j
will actually occur
— result of pending legislation that could
d j = expected duration of activity j
(considering its duration to be 0
if it does not occur)
LCP(i) = critical path length for
network scenario i
— ESj = expected early start time for
LCP = expected critical path length
over all network scenarios
The probability that each activity
will occur is just the sum of the proba-
bilities of all scenarios in which that
activity occurs. The calculations of
expected quantities are standard
expected value calculations: the value
in each scenario is multiplied by the
probability of that scenario, and then
all of the results are added together.
Let us also define:
cj (i) = criticality of activity j in
network scenario i
1 if activity j is critical in
= network scenario (only if aj occurs)
0 if not (including if aj does not occur)
— following:
c j = expected criticality of activity j
over all network scenarios
— dj,k = average duration of aj,k
c = expected criticality of
j|occur
activity j, given that aj actually occurs
The expected criticality is calcu-
lated in the same way as the expected
value calculations described earlier.
We will use the subscript “j|occur”
notation to refer to conditional means
(conditioned on activity j actually
occurring) for other quantities as
well. These are standard conditional
expected values, and are calculated in
a manner similar to the other expect-
ed value calculations (the sum of the
values times the probabilities of their
occurring), but only for the scenarios
in which activity j occurs. This total is
then divided by the probability that
activity j occurs to get the condition-
al expected value or mean.
We will use similar notation and
calculations to define:
— Consider the project network given as
TS j|occur = expected total slack of
activity j, given that aj actually
occurs
If activity j occurs in all scenarios, we
can also similarly define and calculate:
— with a probability of 0.5
activity j
—
EFj = expected early finish time
for activity j
— additional testing, duration of 11, with
LSj = expected late start time for
activity j
— diate predecessors of a2 and a3, and is
LF j = expected late finish time for
activity j
(If aj did not occur in some sce-
narios, we could also make these con-
ditional, as above.)
Some projects (see example 2)
could be conceived of as involving
finite loops, so we can use double sub-
script notation to indicate multiple
iterations of the same activity, follow-
ing the pattern below:
aj,k = iteration k of activity j
In such a case, we can define the
—
(considering the duration to be 0
when it does not occur)
—
dj,• = average total duration of all
iterations of activity j (again,
considering the duration to be 0
when it does not occur)
—
ES = average ES of the first of all
j,•
iterations of activity j
—
EF = average EF of the last of all
j,•
iterations of activity j
—
LS = average LS of the first of all
j,•
iterations of activity j
—
LF = average LF of the last of all
j,•
iterations of activity j
(Again, these could be made condi-
tional if necessary.) The calculations
are straightforward, consistent with the
earlier discussion.
Examples
1. Random Event
Table 1. Suppose that this problem
includes a random event, such as the
require an additional testing activity,
a4. There are three possible scenarios:
(Denoted as N(1))—no additional
testing (legislation does not pass),
(Denoted as N(2))—minimal addi-
tional testing, duration of 4, with a
probability of 0.3
(Denoted as N(3))—significant
a probability of 0.2
In scenarios 2 and 3, a4 has imme-
an immediate predecessor of a6.
We can represent this situation
schematically with a modified version
March 2005 Project Management Journal • 17
 aj Pj dj that if the situation had been repre-
A critical path analysis of each of sented by including a4 in the network
a0 --- 0 the three scenarios was performed diagram for all three cases, and just
using Microsoft Project 2002. After giving it a duration of 0 in Scenario 1,
a1 {a 0} 7 analyzing the base case, the remaining then the results for Scenario 1 would
a2 {a 1} 8 two scenarios were analyzed by modi- be incorrect, because the network
fying the base case (adding a4, and structure would force a2 to be a prede-
a3 {a 1} 6 adjusting the predecessors). The results cessor of a6 (when, in reality, it is not).
a5 {a 2} 12 were then copied to Excel, and the Since the duration of a2 is 8 and the
Total Slack column was transformed duration of a3 is 6, the faulty model
a6 {a 3} 9 into numbers for future analytic pur- would indicate that the early start time
a7 {a 5 ,a 6} 5 poses1. The preceding calculations of a6 is 2 weeks later than it is in reali-
were then performed for each scenario, ty. This observation points out the
a8 {a 7} 0 with the results given in Tables 2 importance of specifying each scenario
through 4. Now we can do the calcula- as accurately as possible, and high-
Table 1: Random event network: base case
tion of the expected critical path lights the value of the scenario
length: approach.
of an Activity on Node (AoN) network, —
LCP =0.5(32)+0.3(33)+0.2(40)=33.9
where arrows represent precedence 2. Loops
relations and dotted arrows indicate We can also calculate the expected Let us now consider an example that
uncertain precedence relations (ones criticalities and total slack for each activ- involves finite loops. We start again
that exist in some scenarios, and not ity over all of the scenarios, as defined with a base case project definition, as
others), as shown in Figure 1. earlier. These are given in Table 5. depicted in Table 6. To understand the
The results show that if a4 occurs, full problem situation, imagine that a2
One way of depicting our it is critical, and if significant addition- involves producing some kind of pro-
approach is through the modified al testing is required, there will be a totype, and a3involves testing it. If the
project network shown as Figure 2, substantial project delay. Notice that in test fails (which we will assume has a
where a circular node is a probabilistic the baseline case (Scenario 1), a5 is probability of 0.2), then both activities
branch. critical, but if a4 occurs, then a5 is not will have to be repeated, but the dura-
Using our notation defined in the critical, with a total slack of 1 in tions will be shorter (1 for a2 and 2 for
previous section, as shown in Figure 2, Scenario 2 and 8 in Scenario 3. This a3, as opposed to initial durations of 3
the scenario probabilities are: p(1) = suggests that planning for the project and 4, respectively), since we will just
0.5, p(2) = 0.3, and p(3) = 0.2. Note that can be conditional; once it is known be refining the production process.
activity 4 (a4) is the only activity that whether the pending legislation passes The other 80% of the time, we assume
does not always occur: or not, and therefore whether a4 occurs the prototype passes the test (we
or not, appropriate priority can be assume the probability of failing twice
—
d4 =(0.5)(0)+(0.3)(4)+(0.2)(11)=3.4 given to a5. We should also point out is negligible). In a somewhat similar

a2 a5

a0 a1 a4 a7 a8

a3 a6

Figure 1: Schematic micro-approach project network graph for the random event example

18 • Project Management Journal March 2005

 a2 a5

a0 a1 a7 a8

a3 a6

p(1)=.5
a2 a5

d4(2)=4
p(2)=.3
a0 a1 a4 a7 a8

a3 a6
p(3)=.2

a2 a5

d4(3)=11
a0 a1 a4 a7 a8

a3 a6

Figure 2: Scenario macro-approach diagram for random event example

March 2005 Project Management Journal • 19

 a2 a3

a0 a1 a4 a6 a8 a9

a5 a7

Figure 3: Schematic micro-approach diagram of the loop example

a2,1 a3,1 a2,2 a3,2

a0 a1 a4,1 a4,2 a4,3 a6 a8 a9

a5 a7

Figure 4: Alternative schematic micro-approach diagram for loop example

(1)
N

(2) a2 a4 a5
N
d0 =0 d1=4 d2 =1 d8 = 6 d9 = 0
N (3)
a0 a1 a3 a8 a9
(4)
N d6 =9 d7 = 5

N
(5) a6 a7

(6)
N

Figure 5: Macro-approach diagram for looping Figure 6: Basic network diagram for uncertain activity duration example
and uncertain durations examples

20 • Project Management Journal March 2005

 4 Random Event – Senario 1 prob = 0.5
5 Task Name Duration (wks) Predecessors Early Start Early Finish Late Start Late Finish Total Slack (wks) Criticality
6 Random Event Example 32 5/19/2003 8:00 12/26/2003 17:00 5/19/2003 8:00 12/26/2003 17:00
7 A0 0 5/19/2003 8:00 5/19/2003 8:00 5/19/2003 8:00 5/19/2003 8:00 0 1
8 A1 7 2 5/19/2003 8:00 7/4/2003 17:00 5/19/2003 8:00 7/4/2003 17:00 0 1
9 A2 8 3 7/7/2003 8:00 8/29/2003 17:00 7/7/2003 8:00 8/29/2003 17:00 0 1
10 A3 6 3 7/7/2003 8:00 8/15/2003 17:00 8/11/2003 8:00 9/19/2003 17:00 5 0
11 A5 12 4 9/1/2003 8:00 11/21/2003 17:00 9/1/2003 8:00 11/21/2003 17:00 0 1
12 A6 9 5 8/18/2003 8:00 10/17/2003 17:00 9/22/2003 8:00 11/21/2003 17:00 5 0
13 A7 5 6,7 11/24/2003 8:00 12/26/2003 17:00 11/24/2003 8:00 12/26/2003 17:00 0 1
14 A8 0 8 12/26/2003 17:00 12/26/2003 17:00 12/26/2003 17:00 12/26/2003 17:00 0 1
15 A4

Table 2: Random event network: calculations for scenario 1 ( LCP(1) = 32 )

fashion, a4 involves a casting process
that may not work (the cast may break
if the materials are not thick enough).
The original activity is a “quick and
dirty” attempt to do the casting, with
an estimated 60% chance of success. If
the process fails, the activity will be
repeated, but more time will be taken
to do it right (duration of 7 vs. 5). Even
then, we assume a 10% chance of fail-
ure the second time around, forcing a
third repetition of the casting activity,
this time with a duration of 9. We
assume the chances of a third failure
are negligible.
This problem could be dia-
grammed most directly as shown in
Figure 3. Because of these types of
looping, certain activities may end up
being repeated once or twice in this
example. We could always give these
repetitions different activity number
names, but this would not reflect their
connections to each other. As men-
tioned at the end of the previous sec-
tion, we will use double subscripts,
where the first subscript represents
the original initial activity from the
base case, and the second subscript
represents which iteration of that
activity we are discussing. This nota-
tion will apply to all definitions we
have made that involved a subscript
of j, where applicable. (For activities
that are not involved in looping, we
could make all of them have a second
subscript of 1, but that seems unnec-
essarily cumbersome.)
One way to represent this problem
schematically, similar to what we did
for our first example, is shown in
Figure 4.
Let us assume that the two cases
for the first loop (whether the test fails
or not) and the three cases for the sec-
ond loop (whether the casting does
not fail the first time, fails only the first
time, or fails twice) are assumed to be
independent of each other2. Then
there are six different scenarios to con-
sider (three cases in the second loop
for each of the two cases of the first
loop). The probability for each sce-
nario is just the product of the corre-
sponding two probabilities for the two
loops in that scenario. Thus, the proj-
ect could also be conceived as shown
in Figure 5, where N(1), N(2),…, N(6) are
the standard network diagrams for the
six scenarios.
This way of thinking of the prob-
lem again makes it clear that we can do
the overall analysis by simply analyz-
ing each scenario, then combining the
results. We will number the scenarios
so that they have the following inter-
pretations:
• Scenario 1: First loop test is suc-
cessful the first time; second loop

17 Random Event – Senario 2 prob = 0.3

18 Task Name Duration (wks) Predecessors Early Start Early Finish Late Start Late Finish Total Slack (wks) Criticality
19 Random Event Example 33 5/19/2003 8:00 1/2/2004 17:00 5/19/2003 8:00 1/2/2004 17:00
20 A0 0 5/19/2003 8:00 5/19/2003 8:00 5/19/2003 8:00 5/19/2003 8:00 0 1
21 A1 7 2 5/19/2003 8:00 7/4/2003 17:00 5/19/2003 8:00 7/4/2003 17:00 0 1
22 A2 8 3 7/7/2003 8:00 8/29/2003 17:00 7/7/2003 8:00 8/29/2003 17:00 0 1
23 A3 6 3 7/7/2003 8:00 8/15/2003 17:00 7/21/2003 8:00 8/29/2003 17:00 2 0
24 A5 12 4 9/1/2003 8:00 11/21/2003 17:00 9/8/2003 8:00 11/28/2003 17:00 1 0
25 A6 9 5,10 9/29/2003 8:00 11/28/2003 17:00 9/29/2003 8:00 11/28/2003 17:00 0 1
26 A7 5 6,7 12/1/2003 8:00 1/2/2004 17:00 12/1/2003 8:00 1/2/2004 17:00 0 1
27 A8 0 8 12/2/2004 17:00 1/2/2004 17:00 1/2/2004 17:00 1/2/2004 17:00 0 1
28 A4 4 4,5 9/1/2003 8:00 9/26/2003 17:00 9/1/2003 8:00 9/26/2003 17:00 0 1

Table 3: Random event network: calculations for scenario 2 ( LCP(2) = 33)

March 2005 Project Management Journal • 21

 30 Random Event – Senario 3 prob = 0.2
31 Task Name Duration (wks) Predecessors Early Start Early Finish Late Start Late Finish Total Slack (wks) Criticality
32 Random Event Example 40 5/19/2003 8:00 2/20/2004 17:00 5/19/2003 8:00 2/20/2004 17:00
33 A0 0 5/19/2003 8:00 5/19/2003 8:00 5/19/2003 8:00 5/19/2003 8:00 0 1
34 A1 7 2 5/19/2003 8:00 7/4/2003 17:00 5/19/2003 8:00 7/4/2003 17:00 0 1
35 A2 8 3 7/7/2003 8:00 8/29/2003 17:00 7/7/2003 8:00 8/29/2003 17:00 0 1
36 A3 6 3 7/7/2003 8:00 8/15/2003 17:00 7/21/2003 8:00 8/29/2003 17:00 2 0
37 A5 12 4 9/1/2003 8:00 11/21/2003 17:00 10/27/2003 8:00 1/16/2004 17:00 8 0
38 A6 9 5,10 11/17/2003 8:00 1/16/2004 17:00 11/17/2003 8:00 1/16/2004 17:00 0 1
39 A7 5 6,7 1/9/2003 8:00 2/20/2004 17:00 1/19/2004 8:00 2/20/2004 17:00 0 1
40 A8 0 8 2/20/2004 17:00 2/20/2004 17:00 2/20/2004 17:00 2/20/2004 17:00 0 1
41 A4 11 4,5 9/1/2003 8:00 11/14/2003 17:00 9/1/2003 8:00 11/14/2003 17:00 0 1

Table 4: Random event network: calculations for scenario 3 ( LCP(3) = 40)

3 Activity Prob. Occur Exp. Crit. Exp. Crit. Occur Exp. TS Occur we will instead simply summarize the
results in Table 7.
4 A0 1 1 1 0
Notice, for example, that activities
5 A1 1 1 1 0
a2,1 and a3,1 (the first occurrence of the
6 A2 1 1 1 0 prototype production and testing
7 A3 1 0 0 3.5 activities) are critical in scenarios 1, 4,
8 A5 1 0.5 0.5 1.9 and 5, but not in scenarios 2, 3, and 6
9 A6 1 0.5 0.5 2.5 (in which both activities have total
slack values of 2, 11, and 8, respective-
10 A7 1 1 1 0
ly). On the other hand, a4,1 (first occur-
11 A8 1 1 1 0
rence of the casting activity) is exactly
12 A4 0.5 0.5 1 0 the opposite: it is critical in scenarios
Table 5: Random event network: probability of occurrence, expected criticalities, and expected 2, 3, and 6, but not in scenarios 1, 4,
total slack for each activity and 5 (where total slack values of that
activity are 5, 8, and 1, respectively).
casting is successful the first time. 2002 to analyze each of these scenar- Using the probabilities given in
• Scenario 2: First loop test is suc- ios, and passed the results to Excel. Table 7, we can now do the calculation
cessful the first time; second loop Rather than providing the complete of the expected critical path length:
casting fails the first time, but is results for each individual scenario as
successful the second time. in the Random Event example above, —
LCP =0.480(37)+0.288(39)+
• Scenario 3: First loop test is suc- (0.120+0.072)(40)+(0.032+0.008)
cessful the first time; second loop
casting fails the first and second aj Pj dj (48)=38.592
times, but is successful the third We can also calculate the expected
time. a0 --- 0 criticalities and total slack for each activ-
• Scenario 4: First loop test fails a1 {a0} 6 ity over all of the scenarios, as defined
the first time, but is successful the earlier. These are given in Table 8.
second time; second loop casting a2 {a1} 3 In the base case, the first loop is
is successful the first time. a3 {a2} 4 critical. If the first loop is successful,
• Scenario 5: First loop test fails whether or not the second loop fails
the first time, but is successful the a4 {a1} 5 once or twice, the second loop is criti-
second time; second loop casting a5 {a1} 10 cal. If the first loop fails, it is critical
fails the first time, but is successful unless the second loop fails twice (a
the second time. a6 {a3} 11 very low-probability event).
• Scenario 6: First loop test fails a7 {a4,a5} 8 Notice that the loop nature of this
the first time, but is successful the example means that activities 2 and 3
second time; second loop casting a8 {a6 ,a7} 13 sometimes occur twice, and activity 4
fails the first and second times, a9 {a8} 0 can occur as many as three times.
but is successful the third time. Based on the original data, we can
Again, we used Microsoft Project Table 6: Loop network: base case compute the average total time spent

22 • Project Management Journal March 2005

 2 Scenario 1 2 3 4 5 6
3 Probability 0.480 0.288 0.032 0.120 0.072 0.008
4 Critical Path Length 37 39 48 40 40 48
5 Activity Total Slack Criticality Total Slack Criticality Total Slack Criticality Total Slack Criticality Total Slack Criticality Total Slack Criticality
6 A0 0 1 0 1 0 1 0 1 0 1 0 1
7 A1 0 1 0 1 0 1 0 1 0 1 0 1
8 A2, 1 0 1 2 0 11 0 0 1 0 1 8 0
9 A3, 1 0 1 2 0 11 0 0 1 0 1 8 0
10 A4, 1 5 0 0 1 0 1 8 0 1 0 0 1
11 A5 0 1 2 0 11 0 3 0 3 0 11 0
12 A6 0 1 2 0 11 0 0 1 0 1 8 0
13 A7 0 1 0 1 0 1 3 0 1 0 0 1
14 A8 0 1 0 1 0 1 0 1 0 1 0 1
15 A9 0 1 0 1 0 1 0 1 0 1 0 1
16 A2, 2 0 1 0 1 8 1
17 A3, 2 0 1 0 1 8 0
18 A4, 2 0 0 0 1 1 0 0 1
19 A4, 3 0 1 0 1

Table 7: Loop network: calculations for scenarios 1-6

on each of these activities: of that activity can start, averaged over

In other words, the total expected the scenarios, weighted by their proba-
— bilities), as well as early finish and late
d 2 =d2,1+(0.2).d2,2=3+(0.2).1=32 time spent on producing prototypes is
— 3.2 weeks, the total expected time finish times (the earliest and latest
(d 2,2 =0.2)
spent on testing prototypes is 4.4 points in time when the last repetition
— of that activity can finish, averaged over
d 3 =d3,1+(0.2).d3,2=4+(0.2).2=44 weeks, and the total expected time
— spent on casting is 8.7 weeks. the scenarios, weighted by their proba-
(d 3,2 =0.4)
Using the calculations done for bilities) for each of these loop activi-
— our analysis, we can also calculate fig- ties. These calculations were discussed
d 4 =d4,1+(0.4).d4,2+(0.1).d4,3=
ures such as expected early start and at the end of the Modeling Approach
5+(0.4).7+(0.1).9=8.7
— — late start times (the earliest and latest section.
(d 4,2 =2.8, d 4,3=0.9 ) points in time when the first repetition
— — —
ES2,.=6, ES3,.=9, ES4,.=6
3 Activity Prob. Occur Exp. Crit. Exp. Crit. Occur Exp. TS Occur
—
4 A0 1 1.000 1 0 EF2,.=(0.480+0.288+0.032).(9)+
5 A1 1 1.000 1 0 (0.120+0.072+0.008).(14)=10.0
6 A2, 1 1 0.672 0.672 0.992 —
EF3,.=(0.480+0.288+0.032).(13)+
7 A3, 1 1 0.672 0.672 0.992
(0.120+0.072+0.008).(16)=13.6
8 A4, 1 1 0.328 0328 3.432
—
9 A5 1 0.480 0.48 1.592 EF4,.=(0.480+0.120).(11)+
10 A6 1 0.672 0.672 0.992 (0.288+0.0720).(18)+(0.032+0.008).(27)
11 A7 1 0.808 0.808 0.432 =14.16
12 A8 1 1.000 1 0
13 A9 1 1.000 1 0
14 A2, 2 0.2 0.192 0.96 0.32
Using analogous calculations,
we obtain:
15 A3, 2 0.2 0.192 0.96 0.32
— — —
16 A4, 2 0.4 0.328 0.82 0.18 LS2,.=6.992, LS3,.=9.992, LS4,.=9.432,
— —
17 A, 3 0.04 0.040 1 0 LF 2, . =10.992, LF3,.=14.592,
—
Table 8: Network: probability of occurrence, expected criticalities, and expected total slack for and LF4,.=17.592
each activity

March 2005 Project Management Journal • 23

 d3 d4
6 3
11 4 .3
11 5 .1
Table 9: Uncertain durations of activities 3 and 4
This means, for example, that the
expected earliest time we can start pro-
totype production is 6 weeks into the
project, the expected earliest time we
can complete all prototype production
is 10 weeks into the project, the expect-
ed latest time we can start prototype
production is just under 7 weeks into
the project, and the expected latest
time we can complete prototype pro-
duction is just under 11 weeks into the
project. If desired, the actual ES, EF, LS,
d5
8 .8
10
Table 10: Uncertain duration of activity 5
and LF times for each activity in each
scenario could also easily be generated
and reported in a table, for a more
detailed risk analysis.
Activities 0, 1, 8, and 9 (a0, a1, a8,
and a9, respectively) are always critical,
Scenario d3
1 6
2 6
3 11
4 11
5 11
6 11
Table 11: Scenarios for uncertain duration example
due to the structure of the project net-
work. Notice that a4,1 has low expected
criticality (both unconditional and
conditional) and the highest expected
total slack, so it could be given the low-
est priority in scheduling. a5 is similar,
but not as extreme, so it could be given
the second-lowest priority in scheduling.
Also, note that any of the repeated
activities (i.e., the last four activities in
Table 8), if they occur, have very high
24 • Project Management Journal March 2005
Probability
.6
(conditional) expected criticalities;
therefore, they must be given high pri-
ority if they occur.
3. Dependent Activity Durations
In this example, we assume that there is
a network scenario for every combina-
tion of discrete random durations. The
basic structure of this example is shown
in Figure 6. In this case, there are no
activities that occur in some scenarios
and not others. The uncertainty lies
only in the durations of activities 3, 4,
Probability
.2
and 5. These durations are not assumed
to be totally independent, as an illustra-
tion of a more general case. The dura-
tions of activities 3 and 4 are assumed
to be dependent, with the probability
distribution given in Table 9. For exam-
d4 d5 Probability
3 8 .48
3 10 .12
4 8 .24
4 10 .06
5 8 .08
5 10 .02
ple, the three outcomes/probabilities
could correspond to no precipitation,
light precipitation, and heavy precipita-
tion. Activities 3 and 4 will be per-
formed at approximately the same time,
but activity 3’s duration may just
depend on whether or not there is pre-
cipitation (e.g., pouring concrete),
while activity 4’s duration is more sen-
sitive to the severity of the precipitation.
The duration of activity 5 is
assumed to be independent of the
combination of values of activities 3
and 4, with the probability distribu-
tion given in Table 10.
Since the two probability distri-
butions are independent, we have a
total of six different possible scenar-
ios, with probabilities given in Table
11.
Since this example has six scenar-
ios, like the previous example, Figure 5
also represents the macro-level
approach for this problem. From Table
11, we can calculate the expected dura-
tions of the three uncertain activities:
—
d 3 =(0.48+0.12).(6)+(0.24+0.06+
0.08+0.02).(11)=8.0
—
d4 =(0.48+0.12).(3)+(0.24+0.06).(4)+
(0.08+0.02).(5)=3.5
—
d5 =(0.48+0.24+0.08).(8)+(0.12+0.06+
0.02).(10)=8.4
Table 12 shows a summary of the
results for each of these scenarios.
Now we can do the calculation of
the expected critical path length:
—
LCP =(0.48+0.12).24+(0.24+0.06+
0.08+0.02).27=25.2
We can also calculate the expected
criticalities and total slack for each
activity over all of the scenarios, as
defined earlier. These are given in
Table 13.
Activity 3 is critical in all cases
where its duration is longest (11),
regardless of the duration of activities
4 and 5. Activities 4 and 5 are critical
only when activity 3’s duration is
shortest (6), and activity 5’s duration
is longest (10). Note that, in this
example, the conditional expected
total slack is also unconditional, since
all activities occur in every scenario.
Conclusions and Managerial
Implications
This paper presents an alternate
macro-level or scenario approach for
modeling and analyzing projects with
uncertain networks. This approach is
applicable for project schedule risk
 2 Scenario 1 2 3 4 5 6
3 Probability 0.480 0.120 0.240 0.060 0.080 0.020
4 Critical Path Length 24 24 27 27 27 27
5 Activity Total Slack Criticality Total Slack Criticality Total Slack Criticality Total Slack Criticality Total Slack Criticality Total Slack Criticality
6 A0 0 1 0 1 0 1 0 1 0 1 0 1
7 A1 0 1 0 1 0 1 0 1 0 1 0 1
8 A2 2 0 0 1 0 1 0 1 0 1 0 1
9 A3 2 0 2 0 0 1 0 1 0 1 0 1
10 A4 2 0 0 1 4 0 2 0 3 0 1 0
11 A5 2 0 0 1 4 0 2 0 3 0 1 0
12 A6 0 1 0 1 3 0 3 0 3 0 3 0
13 A7 0 1 0 1 0 1 0 1 0 1 0 1
14 A8 0 1 0 1 0 1 0 1 0 1 0 1
15 A9 0 1 0 1 0 1 0 1 0 1 0 1

Table 12: Uncertain activity durations network: calculations for scenarios 1 - 6

analysis and contingency planning.
During the project planning process, a
series of project network scenarios can
be identified, each with an assessed
probability of occurrence. These sce-
narios might differ according to the
results of uncertain events that could
3 Activity
4 A0
5 A1
6 A2
7 A3
8 A4
9 A5
10 A6
11 A7
12 A8
13 A9
Table 13: Uncertain activity durations network: overall expected criticalities and total slack for
each activity
occur during the course of the project,
uncertain (possibly dependent) activi-
ty durations, finite loops, or any com-
bination of these three.
We have presented a scenario
approach for modeling and analyzing
these uncertain project situations. An
advantage of our approach is that it
generalizes standard project network
analysis methods, such as critical path
analysis, to the network scenario level.
Our approach also leads to the devel-
opment of new project network uncer-
tainty measures, including expected
and conditional activity criticality and
slack, as well as aggregated expected
durations, and early and late start and
finish times for repeated activities
resulting from looping or stochastic
branching. A second benefit is greater
accessibility and likelihood of the use
Exp. Crit. Exp. Crit. Occur Exp. TS Occur
1 1
1 1
0.52 0.52
0.4 0.4
0.12 0.12
0.12 0.12
0.6 0.6
1 1
1 1
1 1
of uncertainty analysis in project plan-
ning, since the modest data needs and
straightforward analysis are focused on
key scenarios driving schedule uncer-
tainty. Examples were presented to
illustrate the approach, including ran-
dom events, loops, and dependent ran-
dom activity times.
The scenario method proposed
here is a direct extension of existing
project scheduling procedures, and
uses software and techniques familiar
to (and easily accessible by) almost all
project managers. This approach pro-
vides exact results, as well as simplicity,
and offers advantages in analyzing and
interpreting the impact of uncertainty,
especially when the number of critical
uncertainties is relatively small. The
proposed approach can handle uncer-
tain activity durations and finite loops
with varying durations for each repeti-
tion, allows the durations of activities
0
to be dependent upon others, and pro-
vides the ability to summarize critical
0
path analysis information about
0.96
repeated and uncertain activities. For
1.2 these reasons, we believe that our
2.3 approach is more manageable and
2.3 comprehensive than existing methods
1.2
for project managers analyzing the
effects of uncertainty on their project
0
schedule.
0
0 References and Notes
Malcolm, D. G., Rosenboom, J.
H., Clark, C. E., & Fazar, W. (1959).
Application of a technique for research
and development project evaluation.
Operations Research, 7(5), 646-669.
Neumann, K. (1990). Stochastic
project networks: Temporal analysis,
scheduling, and cost minimization.
Berlin: Springer-Verlag.
Pollack-Johnson, B., & Liberatore,
M. J. (2003). Analytical techniques in
project planning and control: Current
practice and future research directions.
Unpublished manuscript, Villanova,
PA: Villanova University, Department
of Decision and Information
Technologies.

March 2005 Project Management Journal • 25

 Pritsker, A. A. B., & Happ, W. W.
(1966). GERT: Graphical evaluation
and review technique — part 1.
Fundamentals. Journal of Industrial
Engineering, 17, 267-274.
Pritsker, A. A. B., & O’Reilly, J. J.
(1999). Simulation with Visual SLAM and
AweSim, New York: John Wiley & Sons.
Project Management Institute.
(2000). A guide to the project manage-
ment body of knowledge (PMBOK®
guide). Newtown Square, PA: Author.
Project Management Institute.
(1999). Project management software
survey. Newtown Square, PA: Author.
Wiest, J. D., & Levy, F. K. (1977). A
management guide to PERT/CPM with
GERT/PDM/DCPM and other networks
(2nd ed.). Englewood Cliffs, NJ:
Prentice-Hall.
1 For details about any of the
Microsoft Project or Excel calculations
performed in this article, please con-
tact the authors.
2 These could also be made
dependent using the proposed
approach, as the third example
demonstrates.

BRUCE POLLACK-JOHNSON earned a BA in sociology with a minor in education from Brandeis University,
an MA in Applied Mathematics from Temple University, and an MS and PhD in Operations Research from
the University of Pennsylvania. He has taught at Oberlin College, and is currently an Associate Professor
of Mathematical Sciences at Villanova University. He has published dozens of papers on project man-
agement, forecasting, educational modeling, and on teaching applied mathematics, as well as a two-vol-
ume text on business calculus and finite mathematics (partially funded by grants from FIPSE, NSF, and
Prentice Hall). His current research is on modeling uncertainty in project scheduling. He is a member of
INFORMS and MAA.

MATTHEW J. LIBERATORE, PhD, is the John F. Connelly Chair in Management and Professor of Decision and
Information Technologies at Villanova University. He previously served as Chair of the Department of
Management and as Associate Dean. Dr. Liberatore has published over sixty journal articles in the fields
of project management, management science, information systems, and research and engineering man-
agement. He recently co-authored a text, Decision Technology: Modeling, Software, and Applications,
published by Wiley. Dr. Liberatore serves on the editorial boards of the American Journal of Mathematical
and Management Sciences and IEEE Transactions on Engineering Management. He is a member of PMI,
INFORMS, and the Decision Sciences Institute.

26 • Project Management Journal March 2005