What is PERT?

Useful management tool for planning, coordinating, and controlling large, complex projects such as formulation of a Master Budget, construction of buildings, installation of computers, and scheduling of the closing of books. The development and initial application of PERT dates to the construction of the Polaris submarine by the U.S. Navy in the late 1950s. The Pert technique involves the diagrammatical representation of the sequence of activities comprising a project by means of a network consisting of arrows and circles (nodes) Managers can obtain a great deal of information by analyzing network diagrams of projects. For example, network diagrams show the sequence of activities involved in a project. From this sequence, managers can determine which activities must take place before others can begin, and which can occur independently of one another Advantages and Disadvantages of PERT Advantages
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PERT chart explicitly defines and makes visible dependencies (precedence relationships) between the WBS elements PERT facilitates identification of the critical path and makes this visible PERT facilitates identification of early start, late start, and slack for each activity, PERT provides for potentially reduced project duration due to better understanding of dependencies leading to improved overlapping of activities and tasks where feasible. The large amount of project data can be organized & presented in diagram for use in decision making.

Disadvantages
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There can be potentially hundreds or thousands of activities and individual dependency relationships The network charts tend to be large and unwieldy requiring several pages to print and requiring special size paper The lack of a timeframe on most PERT/CPM charts makes it harder to show status although colours can help (e.g., specific colour for completed nodes) When the PERT/CPM charts become unwieldy, they are no longer used to manage the project. What is CPM?

A system of project planning, scheduling, and control which combines all relevant information into a single master plan, permitting the establishment of the optimum sequence and duration of operations; the interrelation of all the efforts required to complete a construction project are shown; an indication is given of the efforts which are critical to timely completion of the project.

Advantages of CPM

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Helpful for scheduling, monitoring, and controlling projects A project manager can determine actual dates for each activity and compare what should be happening to what is taking place and react accordingly The activities and their outcomes can be shown as a network Displays dependencies to help scheduling Evaluates which activities can run parallel to each other Determines slack and float times Widely used in industry Can define multiple, equally critical paths CMP determines the project duration, which minimized the sum of direct and indirect costs

Disadvantages of CPM
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CPM's can be complicated, and complexity increases for larger projects Does not handle the scheduling of personnel or the allocation of resources The critical path is not always clear and needs to be calculated carefully Estimating activity completion times can be difficult

Application of CPM and PERT

1. Identify tasks and milestones. Tasks are things that need to be done. These tasks include creating a project plan, producing products and performing quality checks. Milestones signify end points in the project tasks.
2. Figure out the right order. Analyze project tasks and associated resources to determine the most efficient way to get them done. Use a PERT diagram to help you depict tasks with dependencies on other tasks. 3. Create a diagram. Create a diagram, using computer software such as Microsoft Visio or draw it manually. Use lines to denote tasks and circles to denote milestones. 4. Estimate time associated with each task. Typically, you denote time in days or weeks. Determine the shortest amount of time the task can be completed (known as optimistic time), most likely time needed and the longest amount of time that the task might necessitate (known as pessimistic time). You can calculate the expected time based on these values. The formula is typically expected time = (optimistic time + 4 x most likely time + pessimistic time) / 6. If you are using computer software, it may calculate this for you. 5. Determine the Critical Path. The difference in the latest and earliest finish of each task is known as slack. The critical path is the sequence through the diagram in which no task has slack. Use your diagram to explain the shortest time the project can be completed in and the tasks that directly affect the schedule. Use the diagram to prioritize activities and possibly schedule more tasks in parallel by adding more resources. Recognize that these are estimates and your project planning should go smoothly.

Advantages and disadvantages of monte carlo simulation

Monte Carlo Simulation is a simulation Technique that uses random numbers and Probability to solve problems involving variability and uncertainty but it can also be used to deterministic problems Advantages + Often the only possibility, because the actual system cannot be studied - or it does not even exist + Much more flexibility to try things out before building the actual system + Flexibility to control for different variables + Helps to understand the actual system Compared to the exact analytical or mathematical model: + Makes it possible to study more complicated models, which do not have an analytical solution (or solution is difficult) + Dont have to make as many simplifying assumptions get more flexible models that can be more valid + Can include randomness in a controlled way + Correlations and other inter-depencies can be included + Changes to the model are quite easy and quick to do Disadvantages - Dont get simple formulas, which could help to understand the system - Dont get exact answersonly estimates, which Include uncertainty - that should also be estimated - Simulation never corresponds fully to the actual system: validity and uncertainty

Application of Monte Carlo Simulation Method Monte Carlo methods are especially useful for simulating phenomena with significant uncertainty in inputs and systems with a large number of coupled degrees of freedom. Areas of application include: Physical sciences Monte Carlo methods are very important in computational physics, physical chemistry, and related applied fields, and have diverse applications from complicated quantum chromodynamics calculations to designing heat shields and aerodynamic forms. In statistical

physics Monte Carlo molecular modeling is an alternative to computational molecular dynamics, and Monte Carlo methods are used to compute statistical field theories of simple particle and polymer systems.[13] Quantum Monte Carlo methods solve the many-body problem for quantum systems. In experimental particle physics, Monte Carlo methods are used for designing detectors, understanding their behavior and comparing experimental data to theory. In astrophysics, they are used to model the evolution of galaxies.[14] Monte Carlo methods are also used in the ensemble models that form the basis of modern weather forecasting. Engineering Monte Carlo methods are widely used in engineering for sensitivity analysis and quantitative probabilistic analysis in process design. The need arises from the interactive, co-linear and non-linear behavior of typical process simulations. For example,
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in microelectronics engineering, Monte Carlo methods are applied to analyze correlated and uncorrelated variations in analog and digital integrated circuits. This enables designers to estimate realistic 3sigma corners and effectively optimize circuit yields. in geostatistics and geometallurgy, Monte Carlo methods underpin the design of mineral processing flowsheets and contribute to quantitative risk analysis. impacts of pollution are simulated[15] and diesel compared with petrol.[16] In autonomous robotics, Monte Carlo localization can be used to determine the position of a robot, it is often applied to stochastic filters such as the Kalman filter or Particle filter which form the heart of the SLAM ( simultaneous Localisation and Mapping ) algorithm.

Computational Biology Monte Carlo methods are used in computational biology, such for as Bayesian inference in phylogeny. Biological systems such as proteins[17] membranes,[18] images of cancer,[19] are being studied by means of computer simulations. The systems can be studied in the coarse-grained or ab initio frameworks depending on the desired accuracy. Computer simulations allow us to monitor the local environment of a particular molecule to see if some chemical reaction is happening for instance. We can also conduct thought experiments when the physical experiments are not feasible, for instance breaking bonds, introducing impurities at specific sites, changing the local/global structure, or introducing external fields. Applied statistics In applied statistics, Monte Carlo methods are generally used for two purposes: 1. To compare competing statistics for small samples under realistic data conditions. Although Type I error and power properties of statistics can be calculated for data

drawn from classical theoretical distributions (e.g., normal curve, Cauchy distribution) for asymptotic conditions (i. e, infinite sample size and infinitesimally small treatment effect), real data often do not have such distributions.[20] 2. To provide implementations of hypothesis tests that are more efficient than exact tests such as permutation tests (which are often impossible to compute) while being more accurate than critical values for asymptotic distributions. Monte Carlo methods are also a compromise between approximate randomization and permutation tests. An approximate randomization test is based on a specified subset of all permutations (which entails potentially enormous housekeeping of which permutations have been considered). The Monte Carlo approach is based on a specified number of randomly drawn permutations (exchanging a minor loss in precision if a permutation is drawn twice or more frequently for the efficiency of not having to track which permutations have already been selected). Monte Carlo tree search applied to a game of Battleship. Initially the algorithm takes random shots, but as possible states are eliminated, the shots can be more selective. As a crude example, if a ship is hit (figure A), then adjacent squares become much higher priorities (figures B and C). Monte Carlo methods have recently been incorporated in algorithms for playing games that have outperformed previous algorithms in games like Go and Battleship. These algorithms employ Monte Carlo tree search. Possible algorithms are organized in a tree and a large number of random simulations are used to estimate the long-term potential of each move. A black box simulator represents the opponent's moves. In games like Battleship, where there is only limited knowledge of the state of the system (i.e., the positions of the ships), a belief state is constructed consisting of probabilities for each state and then initial states are sampled for running simulations. The belief state is updated as the game proceeds, as in the figure. On a 10 x 10 grid, in which the total possible number of moves is 100, one algorithm sank all the ships 50 moves faster, on average, than random play.[21] One of the main problems that this approach has in game playing is that it sometimes misses an isolated, very good move. These approaches are often strong strategically but weak tactically, as tactical decisions tend to rely on a small number of crucial moves which are easily missed by the randomly searching Monte Carlo algorithm.[citation needed] Design and visuals Monte Carlo methods have also proven efficient in solving coupled integral differential equations of radiation fields and energy transport, and thus these methods have been used in global illumination computations which produce photo-realistic images of virtual 3D models, with applications in video games, architecture, design, computer generated films, and cinematic special effects.[22] Finance and business

Monte Carlo methods in finance are often used to calculate the value of companies, to evaluate investments in projects at a business unit or corporate level, or to evaluate financial

derivatives. They can be used to model project schedules, where simulations aggregate estimates for worst-case, best-case, and most likely durations for each task to determine outcomes for the overall project. Telecommunications When planning a wireless network, design must be proved to work for a wide variety of scenarios that depend mainly on the number of users, their locations and the services they want to use. Monte Carlo methods are typically used to generate these users and their states. The network performance is then evaluated and, if results are not satisfactory, the network design goes through an optimization process.