L07 probability

• Risk Analysis involves the use of the PERT Method.
• Inaccurate activity duration estimates can lead to thousands of dollars in lost opportunities, lost customers, and more.
• Good practice is to make duration estimate by performing responsible for large projects.
• Experienced individuals may make activity duration estimates for each scope or subcontractor.
• The estimate should be aggressive yet realistic, as per Parkinson’s Law which states that “Work expands so as to fill the time available for its completion.”
• Establishing three time estimates in the case of uncertainty is a common practice.
• The expected duration of the project can be calculated by summing the expected duration of all activities that make up the total probability distribution, which is a normal probability distribution.
• The standard deviation, σ, represents the spread of a distribution from its mean.
• There are six types of continuous probability distribution.
• It is possible to calculate the probability, or likelihood, of actually completing the project before the required time using a probabilistic technique.
• Activities on the critical path can be added together to obtain a total probability distribution.
• The expected duration of the project is equal to the sum of the expected duration of all activities that make up the total probability distribution, which is a normal probability distribution.
• An example of a probability distribution is V1= 0.444, V2=2.777, V3=13.44, V=16.661, Σ=4.08.