PROJECT PLANNING WITH UNCERTAINTIES

Transcription

1 PROJECT PLANNING WITH UNCERTAINTIES A dissertation submitted In partial fulfillment of the requirements for the award of the degree of MASTER OF TECHNOLOGY IN INDUSTRIAL ENGINEERING By TASGAONKAR KISHOR VIJAY 2006MEE2124 Under the guidance of Prof. ARUN KANDA INDUSTRIAL ENGINEERING PROGRAMME DEPARTMENT OF MECHANICAL ENGINEERING INDIAN INSTITUTE OF TECHNOLOGY DELHI MAY 2008

2 CERTIFICATE This is to certify that the project report on dissertation titled "Project Planning with Uncertainties" is submitted in partial fulfillment of the requirement for the award of Master of Technology in Industrial Engineering of the Department of Mechanical Engineering, Indian Institute of Technology, Delhi by Tasgaonkar Kishor (Entry No. 2006MEE2124), is a bonafied and original work carried out by him under my supervision and guidance. To the best of my knowledge, the results and conclusion encompassed in this dissertation has not been submitted to any other University or Institute for the award of any degree or diploma. ot 1\(9 ) Prof. Arun Kanda Department of Mechanical Engineering Indian Institute of Technology, Delhi

3 ACKNOWLEDGEMENTS I express my deepest gratitude and thankfulness to my guide Professor Arun Kanda, Mechanical Engineering Department, I.I.T. Delhi. My project guide provided me a motivating, enthusiastic and critical atmosphere during the discussion we had. His constructive criticism and simulating suggestions added a great value to this work. It was a great pleasure for me to do this project under his supervision. Because of his immense expertise and open mind, I have been able to make my dream come true of working in the Project Management. My sincere gratitude also goes to Professor S.G. Deshmukh for helping me throughout the project work. I would like to thank all the Faculty Members, IIT Delhi for their help and valuable suggestion throughout the Project. Also my thanks go to all my Friends who helped me while preparing this Project. Last but not the least; I would be failing in my duty if I do not mention Lord, my Father, Mother who remained all through a source of my encouragement, strength and inspiration. A. :..- E=I t.- TASGAONKAR KISHOR VIJAY 2006MEE2124 II

4 ABSTRACT Projects in their early design include many uncertainties. They are not properly specified, their scope is not fully defined and they involve a lot of uncertainties in quantities, time durations, costs and activities. Rigid figures like CPM and other deterministic methods do not permit to make good uncertainty management, which at the end brings along a lot of mistakes and waste of limited resources. Conventional projects management has tried to give both a solution and an approximation to the problem with different tools like PERT, in order to avoid problems of conventional figures. However, some of these methods are insufficient to model variables and process behavior, which represents a lack of crucial information to make good forecasts. Monte Carlo simulation avoids many of these inconveniences. Using the probabilistic distributions of both internal and external variables and processes, Monte Carlo simulation can model their behavior, thus showing activities and different project scenarios. Also framework has been developed for monitoring a risk factors associated with the project. These frameworks are supported by questionnaires designed to obtain information about the risk factors in the project This project describes an ongoing research effort to develop a methodology as a tool for project management and planning, in which the uncertainty is tackled in order to obtain an overview of the project and its environment, which results in saving time and effort in planning and control A case illustrated from Godrej & Boyce mfg. co. ltd has been provided along with the Calculations to demonstrate the application of the developed frameworks to real time project. Key words: Uncertainties, PERT, Monte Carlo Simulation, and Risk Monitoring

5 CONTENTS Certificate Acknowledgements Abstract Contents List of Figures List of Table List of Abbreviations and Symbols I II III IV VI VII VIII CHAPTER 1 1 INTRODUCTION I 1.1 BACKGROUND MOTIVATION OF THE PROJECT PROBLEM STATEMENT OBJECTIVES AND FOCUS OF THIS PROJECT 3 CHAPTER 2 4 LITERATURE REVIEW PROCESS OF PROJECT PLANNING REVIEW OF MONTE CARLO SIMULATION APPLICATIONS IN PROJECT MANAGEMENT ADVANTAGES OF MONTE CARLO SIMULATION APPLICATIONS IN PROJECT MANAGEMENT PREVIOUS WORK DONE AT IIT DELHI 7 CHAPTER 3 8 PERT ANALYSIS PERT TERMINOLOGY AND CONVENTIONS 8 CONVENTIONS TERMINOLOGY 3.2 THE FRAMEWORK FOR PERT SAMPLE PROJECT 12 CHAPTER 4 15 SOLVING PERT MODEL USING MONTE CARLO TECHNIQUE /5 4.1 SAMPLE PROJECT 16 CHAPTER 5 22 SOLVING PERT MODEL USING ANALYTICAL APPROACH THE RESULTS OF ANALYSIS 26 IV

6 CHAPTER 6 27 DEVELOPMENT OF PROJECT SIMULATOR PACKAGE DEVELOPMENT NUMBER OF SIMULATION RUNS CHART FOR THE PROJECT SIMULATOR MERITS OF PACKAGE 45 CHAPTER 7 46 RISK MONITORING RISK IDENTIFICATION TECHNIQUES RISK MONITORING QUESTIONNAIRES CALCULATION OF RISK INDEX 49 CHAPTER 8 50 A CASE STUDY AT GODREJ & BOYCE MFG. LTD. 8.1 PROFILE OF GODREJ & BOYCE MFG. CO. LTD PRODUCT AND SERVICES CONSUMER PRODUCTS INDUSTRIAL PRODUCTS 8.3 A CASE STUDY FOR SHELL AND TUBE HEAT EXCHANGER UNCERTAINTIES IN THE PROJECT CALCULATION OF RISK INDEX FOR MANAGERIAL ACTION 60 CHAPETER 9 61 CONCLUSION AND SCOPE FOR FUTURE WORK 61 REFERENCES 62 APPENDIX A PROJECT SIMULATOR CODING IN 'C' LANGAGUE 64 APPENDIX B RESULTS OF PROJECT SIMULATOR 85 APPENDIX C RISK MONITORING 88 V