Futcher, K and Thorpe, A (2001) Monte Carlo simulation and Pareto techniques for calculation of multi-project outturn-variance. In: Akintoye, A (ed.) Proceedings of 17th Annual ARCOM Conference, 5-7 September 2001, Salford, UK.
Abstract
Cleland and King in 1986 described a scenario in which project data could also be used within a project management MIS for the purposes of portfolio management. Their approach assumed equal treatment in terms of data management. This research is a refinement of their model. A combination of Monte Carlo techniques and Pareto effects are used to simulate the probabalistic range of outturn performance for the portfolio in terms of expenditure if the high spend projects are managed to achieve the best ten percent of the range of performance achieved by the firm. The range of probable outturn variance between the planned and the actual expenditures of a portfolio of projects is calculated assuming that the probability distribution representing the best ten percent of the range of empirical performance achieved in reality is applied to increasing percents of high-spending projects in the portfolio.
| Item Type: | Conference Paper (Paper) |
|---|---|
| Uncontrolled Keywords: | monte-carlo simulation; multi-projects; Pareto technique; project management |
| Index terms: | project management, data management, project data, Monte Carlo simulation, probability distribution, variance, portfolio management |
| Subjects: | data collection methods, economic analysis, modelling and simulation, project management theory and practice, statistical analysis, measurement and scaling, data management |
| Topics: | Business Strategy, Project Management, Research Practice, Digital Applications |
| Descriptive scope: | 4 PCEA |
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