Appendix Exercise 7-1.

Given the project information below, what is the probability of completing the National
Holiday Toy project in 93 time units?

Act. Description Prede Optm. Most Pess. Act time Variance Critical
ID cessor (a) Likely (m) (b) te [(b - a)/ 6]2
1 Design package None 6 12 24 13 9 x
2 Design product 1 16 19 28 20 4 x
3 Build package 1 4 7 10 7 1
4 Secure patent 2 21 30 39 30 9 x
5 Build product 2 17 29 47 30 25 x
6 Paint 3, 4, 5 4 7 10 7 1 x
7 Test market 6 13 16 19 16 1 x

TS TE 93  86 7 7
    1.00 P = .841
 t
2 9  4  9  25  1  1 49 7
E

4
2
5 6 7
1
3

1– 2 – 4 – 6 – 7 13+20+30+7+16 = 86
1– 2 -5 -6- 7 13 + 20+ 30+7 +16 = 86
1- 3- 6 - 7 13+7+7+16 = 43

Appendix Exercise 7-2.

The Global Tea and Organic Juice companies have merged.

1. Compute the expected time for each activity.

2. Compute the variance for each activity.

Activity Opt. ML. Pess. t Variance Critical?

(a) (m) (b)
1 16 19 28 20 4 x
2 30 30 30 30 0
3 60 72 90 73 25
4 18 27 30 26 4
5 17 29 47 30 25 x
6 4 7 10 7 1
7 12 15 18 15 1 x
8 6 12 24 13 9 x
9 18 27 30 26 4
10 20 35 50 35 25
 11 40 55 100 60 100
12 11 20 29 20 9 x
13 14 23 26 22 4
14 13 16 19 16 1 x
15 0 0 0 0 0

3. Compute the expected project duration.

Duration = 114 days. (TE = 50% completion probability)

4. What is the probability of completing the project by day 112? Within 116 days?

Within 112 days

TS TE  112  114 2 2
   .28 P  .39
  te 4  25  1  9  9  1
2
49 7

TS TE  116  114 2 2

   .28
  te 4  25  1  9  9  1
2
49 7

Within 116 days? P ≈ .61

5. What is the probability of completing ―Negotiate with Unions‖ by day 90?

Critical path duration =86 days

TS TE  90  86   4   4  .40
  t2e 4  100 104 10

Probability of within 90 days ≈ .65

Note:

It is interesting to see the Monte Carlo results of the Consolidation Project when it is
simulated 200 times using a triangular distribution to represent the activity distributions.

Critical path Number of Probability Average

times critical duration
1, 5, 7, 8, 12, 14 106 .530 118.7
3, 10 40 .200 122.0
4, 11, 13 54 .270 125.8

The average simulated project duration for each path (e.g.,118.7) demonstrates the impact of
merge bias from the manual computed method that yielded a duration of 114 time units. The
fact that two paths, other than the critical path, have probabilities of .200 and .270
respectively, suggests there is at least a good chance one could become critical. if they have
a serious delay. The simulated results allow more for objective assessment of scheduling
risk.
 Appendix Case
International Capital, Inc.—Part A

Time in Workdays
Activity Optimistic Most likely Pessimistic te Variance
A 4 7 10 7 1
B 2 4 8 4 1
C 2 5 8 5 1
D 16 19 28 20 4
E 6 9 24 11 9
F 1 7 13 7 4
G 4 10 28 12 16
H 2 5 14 6 4
I 5 8 17 9 4
J 2 5 8 5 1
K 17 29 45 30 22
It is possible to compress the project to reach about a 95% chance of hitting the average.
This would require compression down to 61 days from the current plan of 73 days. See
below.

Chance of average (70) with initial plan (73)

Z = (TS – TE) / Sq. root of sum of variance along Critical Path (s)

Z = (70 – 73) / Sq. root 36 = -3 / 6 = -.5

From Table A7.2 P = .31

This does not meet the 95% chance criterion.

Getting to the average of 70 days and upping the chance of making it would require
compressing the project. Compressing to 61 days will improve the chance of meeting the
95% confidence level (but probably increase the risk and lower the real chance of 95
percent).

Z = (70 - 61) / 6 = +9 / 6 = +1.5

From Table A7.2 (Normal table) P = .93

OR

P = 0.95 -> z = +1.64 -> TE = ??