Removing the Early-Dates Bias in CPM Risk Analysis Presented at AACE’s Annual Meeting
Dr. Gui Ponce de Leon presented his published paper on removing the early-dates bias in CPM Risk Analysis at the AACE’s 2016 Annual Meeting.
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.
AACEI Recommended Practice No. 57R-09 recommends: The schedule should not rely on constraints to force activities to start or finish by certain dates. And, it should use logic for this purpose and not artificially reduce or restrict total float.
Primary Author: Gui Ponce de Leon, PhD, PE, PMP, LEED AP
Co-Author: Vivek Puri, PhD, PMP
The AACE’s 2016 Annual Meeting was held on Sunday, June 26 thru Wednesday, June 29, 2016 at the Sheraton Center, Toronto, ON, Canada.
Gui Ponce de Leon, PhD, PE, LEED AP, PMP
Dr. Gui is recognized as one of our nation’s foremost planning and scheduling subject matter experts. His broad professional experience includes executive and senior roles as investor’s developer, program manager, construction manager and EPC contractor planner/scheduler. Dr. Gui has continually pioneered innovations in project management throughout his 40-year career. He has written widely on the use of CPM in construction contracts as well as on schedule, delay, and acceleration analysis. His recent work with the Graphical Path Method (GPM®) is revolutionizing planning and scheduling at a level not seen since the advent of critical path methods.
Vivek Puri, PhD, PMP
Dr. Puri has expert experience in construction management research, simulation and risk management, and construction planning and execution. He completed his PhD in civil engineering (2012) from Purdue University and his Master of Technology in construction technology and management (2005) from the Indian Institute of Technology Madras, India. Dr. Puri’s PhD thesis focused on combined continuous and discrete event simulation of project operations and its use in project planning.
Read more about this in a Visualize the Plan blog post Irrational Optimism in Risk Analysis.
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