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A DEEPER INSIGHT IN SOME EFFECTS IN PROJECT RISK MANAGEMENT

Wolfgang Tysiak

Abstract


This document shows a possible way how to deal with insecurities in the time schedule of a project plan. It shows that Program Evaluation and Review Technique (PERT), the most popular approach to handle this, bears some severe disadvantages. Furthermore it offers an alternative to overcome them by using Monte Carlo simulation. Finally it can be claimed that a complete change of paradigm is necessary: If you have any insecurities as inputs, everything becomes insecure. This might on the first sight convey the impression that the whole situation converts more complex, but we should rather accept this as the opportunity to apply all the well-known instruments from statistics.

Keywords


risk management in projects; critical path method; PERT; Monte Carlo simulation.

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References


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