The presentation and paper demonstrate the bias and unrealistic completion distribution in CPM risk analysis. CPM risk analysis tools cannot model what commonly occurs when a project unfolds and activities start on dates later than early dates due to floating or pacing decisions based on schedule progress.
CPM risk analysis assumes early schedule dates which yields an optimistic completion distribution due to being predicated on the early schedule dates in each iteration. Realistically, once the project starts or is executed, you might delay activities due to resource requirements and available float on the critical path. Since CPM tools cannot float or pace activities, the completion date gets pushed if there are increases due to delays like weather or production.
An alternative to CPM risk analysis is PMA’s Graphical Path Method (GPM®) developed by Dr. Ponce de Leon. GPM risk analysis allows activities in each realization to float as a function of random sampling and decision rules, accurately modeling the real world where activities are delayed to take advantage of total float. GPM risk analysis corrects for the early bias by allowing floating and pacing scenarios. A novel approach is also introduced for developing a bounding completion distribution envelope for selecting realistic probabilistic completion dates and for monitoring safe-float use as the project progresses.
Presented at the AACE’s 2016 Annual Meeting by Gui Ponce de Leon & Vivek Puri