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Project estimates using Monte Carlo simulation
Speaker introduction: Stefano Martincigh
Project estimates using Monte Carlo simulation
More details: https://www.linkedin.com/in/stefano-martincigh-90ba2132/
Impress them!
Establish
credibility...
Our environment
Project estimates using Monte Carlo simulation
Our environment
Project estimates using Monte Carlo simulation
Planning:
Project estimates using Monte Carlo simulation
Planning:
Project estimates using Monte Carlo simulation
What can we do?
Project estimates using Monte Carlo simulation
Risk Management; Project scheduling simulation
Project estimates using Monte Carlo simulation
https://www.youtube.com/watch?v=NxgVBeTfAio
Monte Carlo Method
Project estimates using Monte Carlo simulation
Definition:
A method of estimating the value of an unknown
quantity using the principles of inferential statistics
We have to create a “transition indicator” where we
have a metric that can give some quantitative data
from the facts of the past into building probabilities
into our future.
Monte Carlo Method steps:
Project estimates using Monte Carlo simulation
Step 1 – Generating random variables that are uniformly distributed between 0 and 1
Step 2 – Transforming [0, 1] uniform variables into random variables that follow the given distributions
Step 3 – repeat step 1 and 2 for each epic
Step 4 – sum all the data from previous step
Step 5 – repeat several thousand times
Step 6 – plot resulting graph
Epics definition
Project estimates using Monte Carlo simulation
Epic = S
Mean = 9 Standard deviation = 0.9
Results:
● 3rd - 7 days
● 50th - 9 days
● 80th - 10 days
● 97th - 11 days
Epics definition
Project estimates using Monte Carlo simulation
Epic = M
Mean = 16 Standard deviation = 1.6
Results:
● 3rd - 13 days
● 50th - 16 days
● 80th - 17 days
● 97th - 19 days
Epics definition
Project estimates using Monte Carlo simulation
Epic = L
Mean = 30 Standard deviation = 3
Results:
● 3rd - 24 days
● 50th - 30 days
● 80th - 33 days
● 97th - 36 days
Project example
Project estimates using Monte Carlo simulation
Project composition
5S 3M 2L
Results:
● 3rd - 142 days
● 50th - 153 days
● 80th - 158 days
● 97th - 163 days
Discussion time!
Project estimates using Monte Carlo simulation
Able to influence Graphs observations
Deeper analysis
Project estimates using Monte Carlo simulation
The Pert distribution: 4 parameters - Min, Max, Mode, Height
Deeper analysis
Project estimates using Monte Carlo simulation
The Pert distribution: 4 parameters - Min, Max, Mode, Height
Pert vs Gaussian
Project estimates using Monte Carlo simulation
Project composition
5S 3M 2L
Gaussian Results:
● 3rd - 142 days
● 50th - 153 days
● 80th - 158 days
● 97th - 163 days
Pert Results:
● 3rd - 155 days
● 50th - 172 days
● 80th - 181 days
● 97th - 192 days
Factors which negatively impact this analysis
Project estimates using Monte Carlo simulation
Acknowledgement
Project estimates using Monte Carlo simulation
● Paul Hampson - https://www.tbble.org/monte-carlo-stefano/
● Geoff Deitz
● Martin Kearns
● Naresh Hirani
Conclusions
Project estimates using Monte Carlo simulation
● Once you build the tool it does not take long to run simulations
● Involve stakeholders in the creation of data driven analysis
Conclusions
Project estimates using Monte Carlo simulation
● Once you build the tool it does not take long to run simulations
● Involve stakeholders in the creation of data driven analysis
Project estimates using Monte Carlo simulation

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Project (agile) estimates using Monte Carlo Simulations

  • 1. Project estimates using Monte Carlo simulation
  • 2. Speaker introduction: Stefano Martincigh Project estimates using Monte Carlo simulation More details: https://www.linkedin.com/in/stefano-martincigh-90ba2132/ Impress them! Establish credibility...
  • 3. Our environment Project estimates using Monte Carlo simulation
  • 4. Our environment Project estimates using Monte Carlo simulation
  • 5. Planning: Project estimates using Monte Carlo simulation
  • 6. Planning: Project estimates using Monte Carlo simulation
  • 7. What can we do? Project estimates using Monte Carlo simulation
  • 8. Risk Management; Project scheduling simulation Project estimates using Monte Carlo simulation https://www.youtube.com/watch?v=NxgVBeTfAio
  • 9. Monte Carlo Method Project estimates using Monte Carlo simulation Definition: A method of estimating the value of an unknown quantity using the principles of inferential statistics We have to create a “transition indicator” where we have a metric that can give some quantitative data from the facts of the past into building probabilities into our future.
  • 10. Monte Carlo Method steps: Project estimates using Monte Carlo simulation Step 1 – Generating random variables that are uniformly distributed between 0 and 1 Step 2 – Transforming [0, 1] uniform variables into random variables that follow the given distributions Step 3 – repeat step 1 and 2 for each epic Step 4 – sum all the data from previous step Step 5 – repeat several thousand times Step 6 – plot resulting graph
  • 11. Epics definition Project estimates using Monte Carlo simulation Epic = S Mean = 9 Standard deviation = 0.9 Results: ● 3rd - 7 days ● 50th - 9 days ● 80th - 10 days ● 97th - 11 days
  • 12. Epics definition Project estimates using Monte Carlo simulation Epic = M Mean = 16 Standard deviation = 1.6 Results: ● 3rd - 13 days ● 50th - 16 days ● 80th - 17 days ● 97th - 19 days
  • 13. Epics definition Project estimates using Monte Carlo simulation Epic = L Mean = 30 Standard deviation = 3 Results: ● 3rd - 24 days ● 50th - 30 days ● 80th - 33 days ● 97th - 36 days
  • 14. Project example Project estimates using Monte Carlo simulation Project composition 5S 3M 2L Results: ● 3rd - 142 days ● 50th - 153 days ● 80th - 158 days ● 97th - 163 days
  • 15. Discussion time! Project estimates using Monte Carlo simulation Able to influence Graphs observations
  • 16. Deeper analysis Project estimates using Monte Carlo simulation The Pert distribution: 4 parameters - Min, Max, Mode, Height
  • 17. Deeper analysis Project estimates using Monte Carlo simulation The Pert distribution: 4 parameters - Min, Max, Mode, Height
  • 18. Pert vs Gaussian Project estimates using Monte Carlo simulation Project composition 5S 3M 2L Gaussian Results: ● 3rd - 142 days ● 50th - 153 days ● 80th - 158 days ● 97th - 163 days Pert Results: ● 3rd - 155 days ● 50th - 172 days ● 80th - 181 days ● 97th - 192 days
  • 19. Factors which negatively impact this analysis Project estimates using Monte Carlo simulation
  • 20. Acknowledgement Project estimates using Monte Carlo simulation ● Paul Hampson - https://www.tbble.org/monte-carlo-stefano/ ● Geoff Deitz ● Martin Kearns ● Naresh Hirani
  • 21. Conclusions Project estimates using Monte Carlo simulation ● Once you build the tool it does not take long to run simulations ● Involve stakeholders in the creation of data driven analysis
  • 22. Conclusions Project estimates using Monte Carlo simulation ● Once you build the tool it does not take long to run simulations ● Involve stakeholders in the creation of data driven analysis
  • 23. Project estimates using Monte Carlo simulation