Monte Carlo Definitions

From Wideman Comparative Glossary

Monte Carlo Analysis
A schedule risk assessment technique that performs a project simulation many times in order to calculate a distribution of likely results. [D01050] PMK96

A process of selecting activity durations from a specified range and performing critical path analysis many times based on different durations. The result is probability distributions for the start and finish times and calculation of a criticality index for each activity in the network. [D03872] PNG

Monte Carlo Method
A statistical method using random numbers. When applied to static PERT scheduling (i.e. several hundred times by computer) it helps to predict how the real system might behave. The random numbers are applied to each activity in the network, and reveals the probability of an activity being on a particular critical path. In a schedule with many activities, it provides good insight into which activities should receive closer management attention. [D03027] SU

A method concerned with random variables from a uniform probability distribution that transforms these variables to ones that correspond to some other probability distribution. [D03026] PMDT

Monte Carlo Simulation
The technique used by project management applications to estimate the likely range of outcomes from a complex random process by simulating the process a large number of times. [D01051] WST

History of the name Monte Carlo

Contributed by Steve Battista of Cairo Corporation:

From the Monaco website:

Charles III and his mother Princess Caroline had the idea of establishing a gaming house under the name of the Société des Bains de Mer. The concession was given in turn to two businessmen, neither of whom was able to manage the enterprise successfully. It was then that François Blanc, director of gaming at Homburg, who came to be called the Magician of Monte Carlo, obtained the concession for fifty years. Under his enlightened management, the business developed to an extent which was far beyond the most optimistic forecasts. Situated in an enchanting setting, the various establishments - hotels, theater and casino - of the Seabath Company attracted hosts of tourists from the very beginning, in spite of the difficulty of access to the Principality. Later, in 1868, when the railway line between Nice and Ventimiglia was completed, their number increased to remarkable figures. The economic growth of the Principality increased in a striking manner and at the same time the development of the town went ahead at an incredible pace. On the rocks of the Spelugues, the main establishment of the Seabath Company, the Casino, was quickly surrounded by luxury hotels and splendid buildings. This area changed its name in 1866 and in honor of Prince Charles assumed that of Monte Carlo.