Editing Critical chain project management (section)

=== Planning ===
A project plan or [[work breakdown structure]] (WBS) is created in much the same fashion as with critical path. The plan is worked backward from a completion date with each task starting as late as possible.

A duration is assigned to each task.  Some software implementations add a second duration: one a "best guess," or 50% probability duration, and a second "safe" duration, which should have higher probability of completion (perhaps 90% or 95%, depending on the amount of risk that the organization can accept).  Other software implementations go through the duration estimate of every task and remove a fixed percentage to be aggregated into the buffers.

Resources are assigned to each task, and the plan is [[resource leveling|resource leveled]], using the aggressive durations. The longest sequence of resource-leveled tasks that lead from beginning to end of the project is then identified as the critical chain. The justification for using the 50% estimates is that half of the tasks will finish early and half will finish late, so that the variance over the course of the project should be zero.<ref>https://www.melbourne.pmi.org.au/wp-content/files/MWP1020_Critical_Chain.pdf {{Bare URL PDF|date=August 2024}}</ref>

Recognizing that tasks are more likely to take more time than less time due to [[Parkinson's law]], [[Student syndrome]], or other reasons, CCPM uses "buffers" to monitor project schedule and financial performance. The "extra" duration of each task on the critical chain—the difference between the "safe" durations and the 50% durations—is gathered in a buffer at the end of the project. In the same way, buffers are gathered at the end of each sequence of tasks that feed into the critical chain. The date at the end of the project buffer is given to external [[Project stakeholders|stakeholders]] as the delivery date. Finally, a baseline is established, which enables financial monitoring of the project.

An alternate duration-estimation methodology uses probability-based quantification of duration using [[Monte Carlo simulation]]. In 1999, a researcher{{Who|date=April 2010}} applied simulation to assess the impact of risks associated with each component of project work breakdown structure on project duration, cost and performance.  Using Monte Carlo simulation, the project manager can apply different probabilities for various risk factors that affect a project component.  The probability of occurrence can vary from 0% to 100% chance of occurrence.  The impact of risk is entered into the simulation model along with the probability of occurrence.  The number of iterations of Monte Carlo simulation depend on the tolerance level of error and provide a density graph illustrating the overall probability of risk impact on project outcome.