Uncertainty to non-critical tasks for portfolio analysis

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KerryMiller
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Location: USA, MI

Uncertainty to non-critical tasks for portfolio analysis

Post by KerryMiller » Wed Sep 09, 2015 10:49 am

Do I need to add uncertainty to non-critical tasks? Typically we need to run Monte Carlo schedule risk analysis on large projects. In the past, for simplicity, we have only assigned uncertainties to activities on the critical path. I saw a presentation recently that advised that we need to assign uncertainties to all tasks. Is the correct and what are the implications to our analysis if we don’t.
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Re: Uncertainty to non-critical tasks for portfolio analysis

Post by Intaver Support » Wed Sep 09, 2015 10:54 am

Short answer is yes, best practice is to add uncertainty to all your project activities when performing Monte Carlo simulations. In reality this could be further refined by add “that can vary in duration” to this advice. Obviously deadlines fall into this category, but there are also some routine activities of very short length (~ 1 day) that can be safely ignored.

However on deterministic schedules only a relatively few activities will be critical. If you do not add uncertainty to the other tasks, the Monte Carlo schedule analysis will not capture the impact of near critical activities, merge bias, and the portfolio effect. In probabilistic project analysis, there can be multiple critical paths where near critical activities can become critical. The Crucial task view is a visual representation of how often activities will land on the critical path. In addition, if you only add uncertainty to critical activities, this may cause errors in the sensitivity analysis.

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