Posted by Quantum Modeling of Project Cost and Schedule
Methods & Models Track
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Abstract:
In conventional cost estimates, project cost is a stochastic sum of individual tasks costs. For the purpose of cost estimate, tasks could be performed in arbitrary sequence thus making the sched- ule links irrelevant. This disregard of task coordination and communication may be responsible for up to 40-50% of the total project cost.
Another approach is Quantum Modeling of a Milestone (QMM) where all tasks interfere with each other contributing to probability density function around planned milestone date. To achieve high probability all tasks should interfere coherently, and if some tasks are delayed the point in time when the milestone achieves high probability may be shifted to significantly later date. Delay of the milestone completion causes increased milestone (or the whole project) cost. Formal QMM milestone probability as a function of cost is similar to S-curve, but QMM does not need task distribution functions inputs.
QMM provides alternative method for project cost estimates applicable to projects where mutual task correlation and coordination is substantial until the milestone completion, such as space mis- sion or software development. In practical applications, project cost probability is predicted in comparison with other similar projects with known history, or relative to the “average” project in the given industry vertical.
Author(s):
Ilya Fishman
Dr. Fishman is a physicist with extensive background in the application of methods and techniques of modern physics to optical and solid state problems, as well as extending these techniques to the field of project management. After emigrating from Soviet Union in 1987 where he was with A.F. Ioffe Institute in Leningrad, he worked as Senior Scientist at Stanford Applied Physics Department in 1989-1999. From 1995 to 1997, he was consulting for Sprint’s Advanced Technology Lab in Burlingame before founding Optimight Communications, an ultra-long haul fiber optics transmission company, where he served as President and CTO in 1999-2002. In 2004, he founded Ibico with the purpose to advance methodology and accuracy of project planning, risks and cost estimates.
David Graham
Before coming back to the Air Force Cost Analysis Agency, David worked at NASA HQ’s in Washington DC from April 2003 – May 2008. Prior to his NASA assignment, he worked at the Aerospace Corporation for two years supporting the Intelligence Community Cost Analysis Improvement Group (IC CAIG). He began at the Space & Missile Systems Center (SMC), Los Angeles AFB, CA in Jan, 1979. He has held a variety of budget, cost performance, cost estimator, cost-risk and program analyst positions up to the present. His career has taken him from Los Angeles to Washington DC and back three times, finally coming back to where he started at SMC and living in the Hermosa Beach area. His work includes earned value analysis, cost estimating, cost-risk analysis, cost as an independent variable (CAIV), Activity Based Costing, aircraft modification financial analysis and space launch range pricing. Most recently, he is focusing on scenario-based discrete cost-risk assessment and analysis utilizing the likelihood vs consequence risk matrix and extending that qualitative analysis into more quantitative results expressed as statistical confidence levels. David is a SCEA Certified Cost Estimator and a present SCEA Board Member.