Gansoucion Management and Economics (1998) 16, 1-18, Estimating project and activity duration: a risk management approach using network analysis NASHWAN DAWOOD Disin of CidBenurn a Bn, Sho of Se ond Techs The Unie of Tui, Micka 751 384, OK ‘ot and gun oma tcc network ay ae Des ud by pou eats made ‘ste iat and produce more cvs role prj Suton. Amuro ce ‘eos hive been deste prev lere whe e aceasta PERT (prow ent snd ei tectiguc, PNET. Ipbabi termed saan vce), NEB, (fur rssby Bowne md) and MCS (Mane Cals slr). ALbagh ene uc ve a mote ran aces penne fin ar tee. -Rnstc ta dnlop 4 etd hat cn acs tne! any depended res et Fc don myo ems gph A tai rn Sed pe tors mode coe and ti nfocnce om sctyvareon tow contig tne sso [ming acy depenence bomen her deeop 3 mpi bel slo oe htt l= Seve vie and vey he mel ‘Keyan Newer za, Monte Carlo subten, PERT, socss eas Background Uncen in nerwor amass as eon used by re shear esateers nan tempt to mod act ars ‘hon varatons more ascurtdy and. produce tore fictive and clble project duran exits. Venaonsofactiy duration do occur due 1 the expo sure of constuction procts 10 mumetous uncon Jub sk tos. Several probabilistic methods hare oun developed to soe the bem of ancereiny Im network analysis. Amongst thee metiods ee Uthumoks, 1987; Chapman, 1990) PERT (program ‘ssluason and review eehnigue), PNET (pete sic ‘enwork vation eee), NRA (aro rb bounds) and MCS (Monte Cato simulation). Diaz and HLdieano (1993) found that PERT os the simplest, method and eis the most opimisicresuks whe IMCS prostce the most commer rely we ‘ever yer of Reorork sn the eatin ie based 08 funvral fancion and computer une” Ranasnghe (954) as ieded an equation © model te uncet- tangy in acti duravon, and develope a quant on fr uncertain in pee dura bon "The esa inthe oes of uncertainty fm network sali which ar buen deveuped oer he ls decade hav refioes the techigucs wed; howeet a amber tf problems sll ext Uncertain in ena is appied (sh sustoal of the project in in rater than2 applying wo projec th the srl ofthe company the basi of the decsion, Obviously, Slere the Uneerainses of project can be combined a. goad Siderstanding of the unceruatie incach poi I osded. Patho, the techiigues ase Sul need ‘enhancing to produce more accurate models of the interactions between incre and acts vane hous Ta this conta i hopes in th search ‘hat unless some form of dependence between sty aritone exis, accurate modeling of uncertain} ‘networks unacanabe, The objective ofthis rere {st explore a methodology, bas on ark manage ‘ent approech, that models variations i the durason Stactiites and ther dependence on Hak factors. Te hypotsesied thar much» methodology ca inprove Droject duration essimates and provide Practisoncr Ut & 00 fr testing several mang sti to fume Jetrinemal cents and their inence Projet duration, The following as have ben prime to achieve the objetive.@) Henly rik fcr ha ate at arto sing 2 erature revi and conducting Ieee foithcomactor i) Model rk factors sd Ste’ durstion variates tnd ety dependence Setween them. (i) Develop a simalsion model 9 enpatnte apd te the ne’ methadoony. (9) RON ‘Spermental wore om eine tues to saat he ‘methods Methodology In this section the proposed methodlogy of model Bag vanations inthe duston facts a tie pendence on Hk factors dace. Te avuned Dawood that tere ae a number of ek factory that might fuse variaion inactivity duration, and "ear Inuence can ier from one at to abot Ta fener, the following ate contre to be the sk factor “Type of sil and ste condition Wenher coniinee “Material and equipment fire Incomplete dat spe Defective design Design changes Fluctuation in nbour productity Aric cbtton Scheontrasers defal Candle ach of the abore fstors can bs modelled wing a repescntatve cation and hve inn ve (0) and a marimar value ()- An MCS, andor umbers for each rk factor are generated fom. pardcular reprscatatie dotsbaton The pe of ‘Sezbaion ean rary fom one avy to another ‘an beep ed for the projec once it has been gener Stet. Ii proposed that ceva tik actors ill ave the seme iataonce onthe proect ees tens for example, typeof i and ste condition, abou product, ee On de other Bane, oter rik ators right be changed with ne and sight fave diferent talses ftom one activity to anther, for example, weather condoms, equipment fale, incomplete Assign, design dee, et In this casey random ‘umber yl be genersted for ash acy foe» Darsclue tine inthe projet calendar Several dite Duvions are used to model ese eto, a show ‘Table 1 (Belg, 199), “able 1 The ibn th pose we ad he parame id ro Osos Revenge Where shee an sil tae tio, the oat 8 arco end a ge “The lover ad uper cares sich ome and appre sndpabaily Bln ire ‘soon scone ‘Weather, soma dttSchastic neon anayis The inne of each re fst om variations of city duro should be enabished. Avan cape, “Table 2 shows a mtzs that ges the infocnce a te Fi factors on varatons of acuity aration. As can Seize cach rok factor has cetin ontnpaton on actoy vations (i fcr {bas 20% nlucnee on ‘ration varios i activity A). "The toa iaaence ‘ofall fetes shouldbe 100% on any ie Atty. Ta reality the sence of fens wil be asst ja ‘nelly tough ksowledge eeiaton. This ll be ‘Tbeaed later inthe Pape. ‘Once cstoution he eos aloes erng a comb raion of hol dats and kee sean ‘heors) t9 ak faery and the inlet Alevloped, the remaining task the caution oF cis duran. der achiee thi the fllowing ‘gant i deveped Dorstion of acne. Mistime + (Maxime ~ MinTine] {URE « Random) © (RF, Random) (RE, = Random) ++ (+ Random) ‘shee MinTime isthe miaimum duration shat can be {Sscpned fo an actiigy MetTine f the mesa ‘heaton dat can be signed oan acti) RE, the Inuene of sk aco wom a patcule ate (oce Aco ator mate), and Random, sandy umber that soul be generated ing represen {he srbaton of tk cor 8 Im order to ilustrte the above equation, Table 3 stoms an evarple of four runs far actly A. Ax ean Ibe sent Ron I al isk aco have tein the very enreme andthe durtion of th acts 20, ‘whigh the maximam. In Ron 2 none of the rik Tactrs has materiale and the durston ofthe acy is the minimum, 10. un 3 shows a duston of 123 days resulted fom 50% materaaton of cach hk factor Final, Run 4 shows the result of having Teo tik factors 1 and 2, wh 100% materaiznton, In ‘order ovat the methodology, a selaton mode tas bern developed wing the Turbo Pascal platform, “The model encprulater sk factor, thei atebuion snd inonces on each actin and the ie of «en Proket. The flowing seston inradaces hypothe Feat case study o state the proposed mathosology, Case study “The case study small cin enginecing prec shown in Table 4 "The rk factors the acted each eso in he projec ad th luce are gen in ‘Table 5. The stbudons representing the poe outcome ofeach rk fact te alan given in Tate 3 [A sustable dneibotion hasbeen alc 0 eh factor sing se information and. judgement, The ‘quater of the ak factors as bee achicred through selecing a probably deution which ‘town the pombe outomes of the varies and the ‘ave Histo! of ach posable outcome. gus 1, Zand 3 show the ditbuton of weather ol and “able 3 An cumple ituste the deep gation avy A of me drt 20 ah min rao 10. Indes sR Ay and Ry weal 29 Ren Rand, “Rand, Red, Randyeva Akio Falenty Min Gate do Sen 1 i BCE ° ° eke € Pletcap Passe 2 sen suse i » Piotcap 5 am store 5 2 Piston ‘ sm Stow 4 a suns 5 rescan tosis Sn 1 » Siere é Fietcan tain spn 5 2 Sse w : Pleacan Pes 5 3 team Spe : ‘Sas Sue 5 5 sitsre PC Span ° Sitsre Sue 2 ‘ ste w inka spn rhs 2 7 Fi ae nt ® “Table $k tices ecg he pe se Hix Daubuion “Men STD An Aa Aw Aa Aa AA het cosh st “Wine 063 022 04D 04D 040040 G0 010 G00 0m 0.0.00 ben rralucniy “Shine 028 02 043 04S 045 090 030 030 030 030 020 420 a | Pe ou oan oa» igure 1 Disbuson of water Figwre 2 Disrbudon of ail3 ewe 3 Dissaion of siiy of upnent 212 esas aill a6 poe 7660 RTH oa 06 (hi, Psi projet duration adil of equipment especialy. The ialunes of ach ik ftor on the sty duration is signed ‘bvomls, the influence of the rk factors should ale the outcome ofthe pret and a ange of exper ‘mental work can be deigncd to vestige the OH fetes, bull be mentioned that the objective this paper is present the methodology and i oper ‘tion. Cnsracton manage shoul beable oust fs cst bench to pinpoint the eflect of 15k factors Se thes projects "The drone that repeet the ‘ak fcr might ifr from proeet fo promot and Utefore the methodology ts dened to tecept a vie range of dsbuckons co sue parce pica Analysis of the resus Having described and quantied the uncon of he isk facors, the seat stage 10 storm. the ‘combined fet of cern on the proc dirt tion and fo identify the factors which concbute % eal oa Pes mie han ee o igure 5 Gumuiiv denbutn or prt dain Risk factors ri ety of wre np Colton coctiient sioncanty tthe total. The resus of he rans ae Compared with Monte Caf silation wing the Bets dstrbuion to model acivy variations. Flgue shoes he rere generated rom 1000 eran ofthe ‘model, the mizumam duration (opti) of the Dwokct 57 dajs and the. maximum darason {essimiste) is 04 days."The meas value of te prooet, Alugaion 78.7 dips with 75 standard deviation sc SOIIS skewness (re. the mean shied wand te pesmi valu). The comlatve density fneton 9 Figure 5 snictes dat around 0 of theres ae tetweon 74and 94 dis Tn oder ani te ls nce ofthe rk factors onthe duration a the pooch, 2 comreition anass between the sk faces and project duration is conducted. Figure 0 shows that Wether and products have a high comeatin (0.68 $n 0.62, espectivy and thi rege stoNg lnueac onthe project duration compared withthe factors "This ype of anafsis shoud help proc, ‘management on focusig on he sk Tators ha nce the projet duration substan4 Doxsvod a 012 wwf auto | Pobsbiliy aw a | 0.06 os “iol ail l | (Tin. SURES aS Fut ps sn igure? Bea datsbton the proce mio os 0 no oo Prosi vl ae #2 ol Pos project dation a ‘fs 1000sun tl yore ae de vera In order compare dhe reste generated from the proposed smethoology with the tradonal PERT Spproach, the model was allowed ta the sae cae sady ang the Bee datebaton. The maximum and ‘num values for each activky tha were ed ine ‘Bes ditabution are sown in Table 4. Figures 7 and 8 show the resus generated fom 1000 ications of the cme study, and the ese are simlar othe proposed methodology; however, the PERT saiaton [ie provdad sak lower standard devon (69) fd higher sewnes of 0.21). The PERT sppecach tas produced an overll expectation of the proce duration without any indication regarding the eases fof such wie outcomes inthe project drs, isk response Having identifi dhe possible outcomes ofthe projet duration, the management nee iden the post bility of reducing the variations an minimizing te 02 om Psble project dation 100. cor, oso 0.60 oo 020 6.00 Pent draon igre Cel tn re din pesmi pst ofthe project duraon. The method ‘logy developed is well sted to tangeing the det imental effect of the ssk factors and consequently Fesueing the impact of suc fcr I he eae stad ison concadet that the weather and prods ie factor havea tong impact on the projet deation, td he intention to reduce te eet fee factore Ts onder to achieve ths it was suaested hat the project used inthe ease study be constucted aver the Sommer his way, the effect ofthe weather can be Iminimized. 1000 iterations were run wing the same Information presented in Table 4 and changing the thean ofthe wenter Gatbuton to (0.2), Figure 9 fad 10 show thatthe posse project durauom has teen sited towards the opm par It ean be een thatthe mean value(s 54 days with shewnes of 0.17 (More experimental work funder ap wit he objet fee of minimising the detmental fect of the ae‘Swetatie ners analysis factor, From Figures 9 and 10 i can be concluded tht the desea fst ofthe ak factors ean be ‘minenized and a more optimise duration can be Droduoed. However, the questi 10 be aked is at trba cst can this be achieved? Management should bheahetncerunte the costbeneti of each option. Ti ut funder evesigation gues It show the rok of 2 set of per mene designed to demonstate the eer of Fang Cerain dk fst wile heeping the rst xed. The ‘Shystive # fo amine the senstiy f dhe projec towards certain ik ctor Figure 11 shows thee ‘tim of the projet durson whe vying oni te Sweater etor and fag the rex of eke Beton, ‘Compared wih Figure 1 (eating al ek cto) he a2 0.10 008 0.065, 04 4 00 Hl Possible projet duration 28 Figure 11 Deut or te poet dion, vaing {he wea cor tanbe fsa, wo ae fae ake AA day average 78 da aad SD 9.2 10 os 0 ont om 000 Posse project duration a results set thatthe spread of data in Figure 11 Smaller (SD 32, min. Of, max 88), however, the Droet al ky, ite sensive wo the Hnuence of eter std needs management atnton £0 counter the uncertain iv he projet Figure 12 shows the ebro ofthe project daraon wile varying nly the soak factory an he spread f ta roduced fuer (SD 3.8, min. 75, max. 80) and the uncer tainty mined. Figure 13 shows the dsibution Ukihe poet duration wil wring only de weather ht soll factory and in Fagore a the fk Cts ‘Sheet producti re varied. The figures stow that the poead of data wider shan a Figures UI and 12, and the projet Highly anceain and sense to ‘Nether an aol factors when they ae combine. a1 6.0 008 0.06 oot 02 no 8 5k f 28 Possible projet duration A i . cll On. sek RB Possible projet duration ture 14 isbn for he po ae rain The ak tng exp pst mera a 10048 Conclusions "The objecte of this ecuch st explore « mathod- ‘logy hat mde voradons, in the datum. of facile and: their dependence on ask feta. ei Typothesind thar rach + methodology can improve pce duration estinater and provide Prctiones ‘ch ool for eesting several mingning siege to {Counter dtnmentlevcats and infeace po. Fectdaration ‘A cae stay has ben use to tart the meth ‘logy anda smalton model hasbeen Seveloped and ‘se eo ncaprlte tht methodology. It cocladed thar dhe resis generated sing the methodology ae ‘very beni to forecasting project dation accurately tnd estimating the enpoct tak factor on prec foram Te should be mtsoned thet the paces! pplication ofthis method oss numer of lita, Br allocaon of the influence nf the ak itr 0 "arations of sey duran needs oniderble emp Fence and jdgement Sdeniving und rodeling Pak Dawood ‘actors is highly dgmental and there i 00m for mi ‘ales and dhe methodology is dependent on isos ata ‘and most consrecton companies do not have accurate corde of contruction ce References ‘Babs, GAR (1990) Ci cota of onion PAD. hom Unveray of Nomina CChypn, E_(1900) Aish capneng approach 19 ome ak sane, a Pt Ding CF ad Haipeons, F.C, (1993) Nondeteminsie Tweking meth ASCE Jou of Conimeen rearing wt Sansome 1190) 10-5, ‘Mma, AA (1067) A volta dase’ ppetch wo ctor shading engienag pce menage, naman Jona of Pout Rech, 20, TF arsine M994) Qualieaion ad manage “ice acy durian eon,