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Exercise Risk Management
Exercise Risk Management
B E 3 0.62
F 9 1.90
a. If you were the manager of this project, would you be concerned? Explain.
Probability (T ≤ 11 weeks):
Path A:
Expected duration = 4 + 6 = 10
Standard deviation:
We must find the variance of the path first by squaring the individual standard deviations to
find the variance for each activity, add the variances, and take the square root of the sum.
Variance = 0.702 +0.90 2=0.490+0.810=1.300
Standard deviation = √ 1.300=1.140
11−10
z= =0.88
1.140
Using Appendix B Table B: Probability of completion ≤ 11 weeks = 0.8106
Path B:
Expected duration = 3 + 9 = 12
Standard deviation:
We must find the variance of the path first by squaring the individual standard deviations to
find the variance for each activity, add the variances, and take the square root of the sum.
Variance = 0.622 +1.902=0.384 +3.610=3.994
Standard deviation = √ 3.994=1.998
11−12
z= =−0.50
1.998
Using Appendix B Table B: Probability of completion ≤ 11 weeks = 0.3085
B E 8 1.6
Path A:
Expected duration = 5 + 4 = 9
Standard deviation:
We must find the variance of the path first by squaring the individual standard deviations to find
the variance for each activity, add the variances, and take the square root of the sum.
Variance = 1.32 +1.02=1.690+1.000=2.690
Standard deviation = √ 2.690=1.640
10−9
z= =0.61
1.640
Path B:
Expected duration = 8
Standard deviation = 1.600
10−8
z= =1.25
1.600
Using Appendix B Table B: Probability of completion ≤ 10 weeks = 0.8944