House Building Project

Abstract

This chapter illustrates a project consisting of building a house. Resources have been assigned to the tasks in the project. The task durations are all modeled with Pert distributions, using the parameters in the model. If the decreases in the model sheet are 0, as they are now, the project is completed in the “normal” way. The simulation with these values should find that the mean project duration is about 133 days, and the mean cost is about $58,000. However, the project duration can be significantly longer because of the uncertainty. The contractor is under pressure to complete the house quickly. The model resulted in a penalty cost for expediting. In addition, there are bonuses for the contractor if they finish the project. The contractor completes the project if allowed (1) the decreases and (2) the penalty costs. Both of these assumptions could be relaxed with straightforward modifications of the model.