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Questins r in the file attached.
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Operations Analytics: Simulation
Monte Carlo Simulation using Crystal Ball / @Risk / Python
Case II: Project Management with Correlated Activities (2 points)
Consider the following rather simple project.
⚫ Activities A and B start immediately. The time for each activity follows a Normal
distribution with mean 50 days, and standard deviation 10 days.
The completion time for activities A and B is correlated, and the correlation
parameter is ρ. We will investigate how varying the correlation between
⚫
⚫
these activities affects completion time of the project.
Activity C begins only after both Activities A and B are completed. The time to
complete Activity C follows a Uniform distribution between 20 and 40 days. Time
for Activity C is not correlated with the other activities.
Formally, we have:
Time-A ~ N(50 , 102 )
Time-B ~ N(50 , 102 )
Time-C ~ U[20 , 40]
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⚫
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Corr(Time-A , Time-B) = ρ
Develop the analysis in Crystal Ball (or @Risk or Python)
Evaluate completion time for the project, as a function of different levels of
correlation between times of Activities A and B. Remember that correlation can be
between -1 and +1. Include a printout of the completion times.
If the objective is shortest completion time, what’s the best form of correlation
between activities? Explain this result.
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