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    DECISION RULE (b)

    100 sl ips of paper marked 00 - 99

    Activity bProbab ility 0 .70 0 .30

    Sl ips marked 00 - 69 70 - 99durat ion 7 9

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    DECISION RULE - ( c)

    100 sl ips of paper marked 00 - 99

    Activity cProbab ility 0 .20 0 .6 0 0 .20Sl ips marked 00 - 19 20 - 79 80 - 99

    durat ion 2 4 6

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    SAMPLE PROJECTJ ob des c ription prede c essors time

    A Order m/ c -- 4, 5, 6 (0 .3,0 .5,0 .2)

    B Prepare s ite -- 4C Re ce ive m/ c A 2, 4, 6

    (0 .2,0 .6 ,0 .2)

    D Ele c tr ical conn e c tions A 2E Install m/ c B, C 7, 9

    (0 .7,0 .3)

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    PROJECT NET WORK

    1 34

    2

    A C D

    B E

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    RAN DOM NUMBER TABLE

    03 68 93 30 90 43 4 6 59 67 89 5 6 68 83 We w ill use these ra ndom numbers to

    ge nerate the t imes for the proje c ta c tivities . Ac tivity A C E

    Ra ndom No . 03 68 93 Durat ion 4 4 9(Us ing the probab ility d istr ibut ion data)

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    PROJECT NET WORK

    (1st Real izat ion)

    1 34

    2

    A 4 C D

    B E

    4

    94

    2

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    COMPILING SIMULATION

    RESULTSS .No . A B C D E cr path1 4 * 4 4 * 2 9 * 17

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    RAN DOM NUMBER TABLE II

    03 68 93 30 90 43 4 6 59 67 89 5 6 68 83 We w ill use these ra ndom numbers to

    ge nerate the t imes for the proje c ta c tivities . Ac tivity A C E

    Ra ndom No . 30 90 43 Durat ion 5 6 7

    (Us ing the probab ility d istr ibut ion data)

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    PROJECT NET WORK

    (2nd Real izat ion)

    1 34

    2

    A 5 6 C 2 D

    B E

    47

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    COMPILING SIMULATION

    RESULTSS .No . A B C D E cr path1 4 * 4 4 * 2 9 * 17

    2 5 * 4 6* 2 7* 1 8

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    RAN DOM NUMBER TABLE

    03 68 93 30 90 43 4 6 59 67 89 5 6 68 83 We w ill use these ra ndom numbers to

    ge nerate the t imes for the proje c ta c tivities . Ac tivity A C E

    Ra ndom No . 46 59 67 Durat ion 5 4 7(Us ing the probab ility d istr ibut ion data)

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    PROJECT NET WORK

    (3rd Real izat ion)

    1 3 4

    2

    A C D

    B E

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    COMPILING SIMULATION

    RESULTSS .No . A B C D E cr path1 4 * 4 4 * 2 9 * 17

    2 5 * 4 6* 2 7* 1 83 5* 4 4* 2 7* 1 6

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    PROJECT DISTRIBUTION,

    MEAN & VARIANCE

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    CRITICALITY IN DICES

    Cr itical ity index of a n a c tivity =Probab ility that the a c tivity be comes

    cr itical =Number of t imes the a c tivity was cr itical/Number of s imulat ion runs

    [Th is is a conce pt t hat was totall y missing in conventional PER T]

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    SUMMARY - I

    Proje c t s imulat ion as a powerful tool toha ndle u nc erta in a c tivity durat ions .

    Bas ic methodolo gy of s imulat ion involvesrepl icat ing the behav iour of the network bysampl ing a c tivity t imes us ing Mon te Carlos imulat ion.Mon te Carlo s imulat ion to ge nerate

    d is crete a nd con tinuous d istr ibut ions .

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    SUMMARY - II

    A small ma ch ine installat ion proje c t take n up to illustrate the bas ic approa ch of proje c t s imulat ion.Comp ilat ions at the e nd of s imulat ion usedto obta in parameters l ike Proje c t expe c ted durat ion Var ia nc e of proje c t durat ion Cr itical ity ind ices of a c tivities

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    SUMMARY - III

    S imulat ion results ca n be used to showthe errors in the PERT a nalys is .

    A lar ge number of s imulat ion runs isneeded to obta in reaso nably rel iableest imates .(Stat ist ical infere nc e is used to determ inethe number of s imulat ion runs to est imatethe proje c t parameters w ith a pre spe cif iedpre cis ion a nd con f ide nc e)

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    Entrepreneurship Oxford University Press 2008 All rights reserved