Using Decision Trees For Project Management: Calculating Expected Monetary Value

Methodology of Making Effective Project Management Decisions

a) Decision Tree Development

The development of decision tree is used to resolve the outdoor construction project because this project has the constructing work in a coastal area and it is reviewing the progress on August 1. It has problem based on two aspects like lost due to hurricanes and poor weather conditions. These two aspects are does not provide the effective project within project time. The hurricanes and poor weather conditions are makes the chances to delay the project. So, to reduce this problem to decide to speed up the work and it makes the additional cost of $150 per day. This process is used to makes the chances the project on August 31.

b) Expected Monetary Value

Expected Monetary value is calculated by using the three aspects like weather conditions, material cost and labor cost. Here, we are using the weather condition to calculate the expected monetary value. Because, the outdoor construction project is has problem based on weather conditions and hurricanes. The poor weather condition is leads to delay the project. The minor hurricanes creates the 40 % chances to delay the project that is 6 days delay on the project. The major hurricanes creates the 20% chances to delay the project that is 12 days delay on the project. The expected monetary value calculation is shown below.

Weather condition – Minor hurricanes

40/100 * (6*150) = $360

Weather condition – Major hurricanes

20/100 * (6*900) = $1080

20/100 * (6*1200) =$144

c) Precision Tree

The Precision tree is show below.

2.1 Planning

Overall project planning is shown below.

Task Name	Duration	Resource Names
Project Office	246 days
Scope	12 days
Start Project	1 day	Task dependent
Determine Project Office scope	3 days	Task dependent
Document high-level Project Office requirements including resources	2 days	Task dependent
Justify Project Office via business model	3 days	Task dependent
Secure executive sponsorship	2 days	Task dependent
Scope complete	1 day	Task dependent
Planning	115 days	Task dependent
Analysis/Logistics	20 days	Task dependent
Review Project Office scope documentation	1 day	Task dependent
Establish a management framework	3 days	Task dependent
Analyze business objectives	2 days	Task dependent
Define mission statement	2 days	Task dependent
Define goals	3 days	Task dependent
Establish communications plan	1 day	Task dependent
Secure Project Office core resources	7 days	Task dependent
Logistics complete	1 day	Task dependent
Policies and Procedures	57 days
Define “best of breed” processes	7 days	Task dependent
Define “best of breed” tools	7 days	Task dependent
Define “best of breed” techniques	7 days	Task dependent
Establish resource relationships	7 days	Task dependent
Define compliance criteria	7 days	Task dependent
Define project test processes	7 days	Task dependent
Define reporting requirements	7 days	Task dependent
Define Project Office priorities	7 days	Task dependent
Policies and procedures complete	1 day	Task dependent
Project Standards and Controls	38 days
Define security/roles/responsibilities	3 days	Task dependent
Define system parameters	2 days	Task dependent
Create project numbering schema	5 days	Task dependent
Define financial reporting integration	7 days	Task dependent
Identify project categories for template creation	3 days	Task dependent
Create project templates	14 days	Task dependent
Project standards and controls complete	1 day	Task dependent
Empower Project Office	1 day	Task dependent
Announce Project Office	1 day	Task dependent
Planning complete	1 day	Task dependent
Initiate Project Office	119 days
Staff Project Office personnel	1 day	Task dependent
Project Office Support for Existing Projects	14 days
Determine existing projects for Project Office	2 days	Task dependent
Audit projects	7 days	Task dependent
Modify projects for compliance	3 days	Task dependent
Enter projects into Project Office management	1 day	Task dependent
Project Office support for existing projects complete	1 day	Task dependent
Project Office Support for New Projects	35 days
Identify new projects for Project Office	7 days	Task dependent
Create project using Project Office criteria/templates	14 days	Task dependent
Establish monitoring criteria	3 days	Task dependent
Establish performance metrics	4 days	Task dependent
Establish budget guidelines	3 days	Task dependent
Enter project into Project Office management	2 days	Task dependent
Project Office support for new projects complete	1 day	Task dependent
Initiate Project Office complete	1 day	Task dependent
Management (ongoing)	7 days
Review business priorities applicable to projects	7 days	Task dependent
Risk Assessment	12 days
Perform risk assessment	3 days	Task dependent
Evaluate risk assessment against project priorities	7 days	Task dependent
Prepare contingency plans	1 day	Task dependent
Risk assessment complete	1 day	Task dependent
Monitoring	13 days
Prepare project review meeting agenda	1 day	Task dependent
Conduct project review meetings	1 day	Task dependent
Create reports for critical issues, budgets, allocating resources, tracking progress, etc.	2 days	Task dependent
Work to mitigate critical issues	2 days	Task dependent
Assist with allocating resources	2 days	Task dependent
Freeze/release project baselines	2 days	Task dependent
Establish change management control	1 day	Task dependent
Freeze/release project budgets	1 day	Task dependent
Monitoring complete	1 day	Task dependent
Historical/Archival	18 days
Establish project archives	7 days	Task dependent
Establish lessons learned repository	7 days	Task dependent
Manage project archives	3 days	Task dependent
Historical complete	1 day	Task dependent
Post Implementation Review	19 days
Obtain user feedback	3 days	Task dependent
Evaluate lessons learned	7 days	Task dependent
Modify Items as necessary	7 days	Task dependent
Post implementation review complete	1 day	Task dependent
Project Office template complete	1 day	Task dependent

The project planning Gantt chart is shown below.

Critical Tasks is shown below.

Name	Start	Finish	% Complete	Remaining Work	Resource Names
Staff Project Office personnel	Tue 11/6/18	Tue 11/6/18	0%	8 hrs	Task dependent
Determine existing projects for Project Office	Wed 11/7/18	Thu 11/8/18	0%	16 hrs	Task dependent
Audit projects	Fri 11/9/18	Mon 11/19/18	0%	56 hrs	Task dependent
Modify projects for compliance	Tue 11/20/18	Thu 11/22/18	0%	24 hrs	Task dependent
Enter projects into Project Office management	Fri 11/23/18	Fri 11/23/18	0%	8 hrs	Task dependent
Project Office support for existing projects complete	Mon 11/26/18	Mon 11/26/18	0%	8 hrs	Task dependent
Identify new projects for Project Office	Tue 11/27/18	Wed 12/5/18	0%	56 hrs	Task dependent
Create project using Project Office criteria/templates	Thu 12/6/18	Tue 12/25/18	0%	112 hrs	Task dependent
Establish monitoring criteria	Wed 12/26/18	Fri 12/28/18	0%	24 hrs	Task dependent
Establish performance metrics	Mon 12/31/18	Thu 1/3/19	0%	32 hrs	Task dependent
Establish budget guidelines	Fri 1/4/19	Tue 1/8/19	0%	24 hrs	Task dependent
Enter project into Project Office management	Wed 1/9/19	Thu 1/10/19	0%	16 hrs	Task dependent
Project Office support for new projects complete	Fri 1/11/19	Fri 1/11/19	0%	8 hrs	Task dependent
Initiate Project Office complete	Mon 1/14/19	Mon 1/14/19	0%	8 hrs	Task dependent
Review business priorities applicable to projects	Tue 1/15/19	Wed 1/23/19	0%	56 hrs	Task dependent
Perform risk assessment	Thu 1/24/19	Mon 1/28/19	0%	24 hrs	Task dependent
Evaluate risk assessment against project priorities	Tue 1/29/19	Wed 2/6/19	0%	56 hrs	Task dependent
Prepare contingency plans	Thu 2/7/19	Thu 2/7/19	0%	8 hrs	Task dependent
Risk assessment complete	Fri 2/8/19	Fri 2/8/19	0%	8 hrs	Task dependent
Prepare project review meeting agenda	Mon 2/11/19	Mon 2/11/19	0%	8 hrs	Task dependent
Conduct project review meetings	Tue 2/12/19	Tue 2/12/19	0%	8 hrs	Task dependent
Create reports for critical issues, budgets, allocating resources, tracking progress, etc.	Wed 2/13/19	Thu 2/14/19	0%	16 hrs	Task dependent
Work to mitigate critical issues	Fri 2/15/19	Mon 2/18/19	0%	16 hrs	Task dependent
Assist with allocating resources	Tue 2/19/19	Wed 2/20/19	0%	16 hrs	Task dependent
Freeze/release project baselines	Thu 2/21/19	Fri 2/22/19	0%	16 hrs	Task dependent
Establish change management control	Mon 2/25/19	Mon 2/25/19	0%	8 hrs	Task dependent
Freeze/release project budgets	Tue 2/26/19	Tue 2/26/19	0%	8 hrs	Task dependent
Monitoring complete	Wed 2/27/19	Wed 2/27/19	0%	8 hrs	Task dependent
Establish project archives	Thu 2/28/19	Fri 3/8/19	0%	56 hrs	Task dependent
Establish lessons learned repository	Mon 3/11/19	Tue 3/19/19	0%	56 hrs	Task dependent
Manage project archives	Wed 3/20/19	Fri 3/22/19	0%	24 hrs	Task dependent
Historical complete	Mon 3/25/19	Mon 3/25/19	0%	8 hrs	Task dependent
Obtain user feedback	Tue 3/26/19	Thu 3/28/19	0%	24 hrs	Task dependent
Evaluate lessons learned	Fri 3/29/19	Mon 4/8/19	0%	56 hrs	Task dependent
Modify Items as necessary	Tue 4/9/19	Wed 4/17/19	0%	56 hrs	Task dependent
Post implementation review complete	Thu 4/18/19	Thu 4/18/19	0%	8 hrs	Task dependent
Project Office template complete	Fri 4/19/19	Fri 4/19/19	0%	8 hrs	Task dependent

The MS project file is attached here.

References

Brighthub Project Management. (2018). Decision Trees Example: Using Decision Trees Analysis to Calculate Expected Monetary Value (EMV) in Project Risk Management. [online] Available at: https://www.brighthubpm.com/risk-management/48360-using-a-decision-tree-to-calculate-expected-monetary-value/ [Accessed 12 May 2018].

Brighthub Project Management. (2018). How to Calculate Expected Monetary Value (EMV): Examples. [online] Available at: https://www.brighthubpm.com/risk-management/48245-calculating-expected-monetary-value-emv/ [Accessed 12 May 2018].

dummies. (2018). How to Calculate Expected Monetary Value (EMV) – dummies. [online] Available at: https://www.dummies.com/careers/career-planning/choosing-a-career/how-to-calculate-expected-monetary-value-emv/ [Accessed 12 May 2018].

Pmi.org. (2018). Decision tree analysis for the risk averse organization. [online] Available at: https://www.pmi.org/learning/library/decision-tree-analysis-expected-utility-8214 [Accessed 12 May 2018].

Pmi.org. (2018). What is Project Management?. [online] Available at: https://www.pmi.org/about/learn-about-pmi/what-is-project-management [Accessed 12 May 2018].

Projectinsight.net. (2018). 5 Basic Phases of Project Management. [online] Available at: https://www.projectinsight.net/project-management-basics/basic-project-management-phases [Accessed 12 May 2018].

Smartsheet. (2018). Construction Project Management 101. [online] Available at: https://www.smartsheet.com/construction-project-management-101-full [Accessed 12 May 2018].

Usmani, F. and C, C. (2018). A Short Guide to Expected Monetary Value (EMV). [online] Pmstudycircle.com. Available at: https://pmstudycircle.com/2015/01/a-short-guide-to-expected-monetary-value-emv/ [Accessed 12 May 2018].

Versabucket.com. (2018). Transportation Management Services | VersaBucket, LLC.. [online] Available at: https://www.versabucket.com/services/transportation-management/?useYB=2 [Accessed 12 May 2018].

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