{"id":27876,"date":"2015-02-03t16:42:32","date_gmt":"2015-02-03t21:42:32","guid":{"rendered":"\/\/www.deco-dalles.com\/?p=27876"},"modified":"2019-10-17t16:55:33","modified_gmt":"2019-10-17t20:55:33","slug":"monte-carlo-schedule-simulations-101","status":"publish","type":"post","link":"\/\/www.deco-dalles.com\/monte-carlo-schedule-simulations-101\/","title":{"rendered":"monte carlo 101: how monte carlo schedule simulations work"},"content":{"rendered":"<p>the term monte carlo simulation just has that aura and feel about it&#8230;&#8230; it sounds complex. but in reality it&#8217;s not as complex as we think. let&#8217;s see if we lay it out for you in straightforward terms.<\/p>\n<h2>what is a monte carlo simulation?<\/h2>\n<p>a monte carlo simulation is simply a way to understand how inputs into a system might affect the outputs. let&#8217;s say you\u00a0have a box of coins that you pour out onto a table. once they all drop, you count tails and heads and come up with a ratio that you plot on a graph. then you do this same experiment 1000 times to see what the results and the graph look like. this process uses a monte carlo method.<\/p>\n<p>now, if you programmed a computer to\u00a0model this same process and you ran the model 1000 times or more, graphing the results, you would have a monte carlo simulation.<\/p>\n<h2>monte carlo and scheduling<\/h2>\n<p>now in scheduling, let&#8217;s assume that our schedule is a model and that the <a title=\"cpm scheduling 101: how primavera scheduling works\" href=\"\/\/www.deco-dalles.com\/cpm-scheduling-101-primavera-scheduling-works\/\">cpm scheduling<\/a> algorithm that we run to calculate the project&#8217;s finish date is our simulation.<\/p>\n<p>let&#8217;s then try to understand our duration estimates using this monte carlo method. so let&#8217;s find a way to vary our activity durations, then run the simulation (aka cpm scheduling) to see what happens.<\/p>\n<p>we can vary our durations by changing them from a single value to a range of values &#8211; from most likely duration to least likely duration and somewhere in the middle.<\/p>\n<p>so now our project&#8217;s activities each look like this:<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-7880 size-full\" title=\"monte carlo risk analysis\" src=\"\/\/www.deco-dalles.com\/wp-content\/uploads\/2015\/02\/monte-carlo2.png\" alt=\"monte carlo risk analysis\" width=\"504\" height=\"147\" \/><\/p>\n<h3>the simulation, simplified<\/h3>\n<p>now, let&#8217;s take job 1, use the <strong>best-case number<\/strong>, and run cpm scheduling. what&#8217;s our finish date? oh!<\/p>\n<p>now, let&#8217;s take job 1, use the <strong>expected\u00a0number<\/strong>, and run cpm scheduling. what&#8217;s our finish date? wow.<\/p>\n<p>now, let&#8217;s take job 1, use the <strong>worst-case\u00a0number<\/strong>, and run cpm scheduling. what&#8217;s our finish date? hmm.<\/p>\n<p>and so on&#8230;.<\/p>\n<h3>making the simulation even better<\/h3>\n<p>to give richer results, let the computer try every number between best-case and worst-case, choosing one at random.<\/p>\n<p>and to make the results even richer, program the computer to pick a set of random\u00a0durations for each job, (within the range [best-case to worst-case]) and run cpm scheduling. plot the finish date of the project on a graph.<\/p>\n<p>repeat a lot of times (1,000x, 100,000x or more). then, plot a distribution of calculated project finish dates.<\/p>\n<p>and you get something that looks like this.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-7885 size-full\" title=\"monte carlo scheduling simulation\" src=\"\/\/www.deco-dalles.com\/wp-content\/uploads\/2015\/02\/monte-carlo-analysis.jpg\" alt=\"monte carlo scheduling simulation\" width=\"518\" height=\"405\" \/><\/p>\n<h3>what are the benefits of monte carlo simulations?<\/h3>\n<p>a monte carlo schedule simulation provides a project&#8217;s decision-maker with a scope of possible results and the probabilities each outcome might happen. it gives you\u00a0the extreme possibilities\u2014the results of going-for-broke and for making more\u00a0conservative decisions\u2014along with all possible ramifications for middle-of-the-road decisions.<\/p>\n<p style=\"text-align: center;\"><span id=\"hs-cta-wrapper-834efcba-ffe7-461a-9e9d-6062486283c9\" class=\"hs-cta-wrapper\"><span id=\"hs-cta-834efcba-ffe7-461a-9e9d-6062486283c9\" class=\"hs-cta-node hs-cta-834efcba-ffe7-461a-9e9d-6062486283c9\"><!-- [if lte ie 8]><\/p>\n\n\n\n\n\n<div id=\"hs-cta-ie-element\"><\/div>\n\n\n<![endif]--><a href=\"http:\/\/cta-redirect.hubspot.com\/cta\/redirect\/297539\/834efcba-ffe7-461a-9e9d-6062486283c9\" target=\"_blank\" rel=\"noopener noreferrer\"><img decoding=\"async\" id=\"hs-cta-img-834efcba-ffe7-461a-9e9d-6062486283c9\" class=\"hs-cta-img aligncenter\" style=\"border-width: 0px;\" src=\"https:\/\/no-cache.hubspot.com\/cta\/default\/297539\/834efcba-ffe7-461a-9e9d-6062486283c9.png\" alt=\"new call-to-action\" \/><\/a><\/span><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>the term monte carlo simulation just has that aura and feel about it&#8230;&#8230; it sounds complex. but in reality it&#8217;s&#8230;<\/p>\n","protected":false},"author":5,"featured_media":27982,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","_kad_post_transparent":"","_kad_post_title":"","_kad_post_layout":"","_kad_post_sidebar_id":"","_kad_post_content_style":"","_kad_post_vertical_padding":"","_kad_post_feature":"","_kad_post_feature_position":"","_kad_post_header":false,"_kad_post_footer":false,"footnotes":""},"categories":[188],"tags":[274],"content-topics":[],"class_list":["post-27876","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-software-and-technology","tag-risk-management"],"acf":[],"yoast_head":"<!-- this site is optimized with the yoast seo premium plugin v24.0 (yoast seo v24.0) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>monte carlo 101: how monte carlo schedule simulations work<\/title>\n<meta name=\"description\" content=\"what is a monte carlo schedule simulation and how does it work? 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