question on schedule risks

Submitted by vijayavadrevu on Sat, 03/16/2013 - 14:55

Peter is considering the schedule risks of 4 of his project's activities. Based solely on 3 point duration estimates of these activities, which of the following activities' duration estmates should he consider the most risky:

A) optimistic = 16days; most likely = 19days; pessimistic = 23days

B) optimistic = 1day; most likely = 3days; pessimistic = 12days

C) optimistic = 12days; most likely = 15days; pessimistic = 19days

D) optimistic = 8days; most likely = 9days; pessimistic = 10days

Answer given is B

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sspawar

Sat, 03/16/2013 - 16:06

 Higher the uncertainty, higher the risk

based on this principle option B has highest uncertainty among all = 11days , hence highest risk is with B.

Also from mean value to passamistic value difference is highest.

Sangeetha.R

Sat, 03/16/2013 - 17:28

could you elaborate the calculation for your justtification, which would be helpful?

AP

Sat, 03/16/2013 - 17:31

Uncertainity means Pessimistic minus Optimistic. This is not a formula but a concept. 

So in the given options, B has the highest uncertainity. Higher the uncertianity, higher the risk.

Sangeetha.R

Sat, 03/16/2013 - 17:43

thank you!

vijayavadrevu

Sat, 03/16/2013 - 17:48

Thank You very much

kmkan28

Sat, 03/16/2013 - 18:22

 Arun,

We are all bound to work with the text book formulas and it is hard to think beyond the formulas.Based on that assumption i just tried this with the 3 point estimates and got confused.Luckily pawar and you clarified the doubt stating that uncertainty means P-O only.

Please let us know if any such a kind of exceptional formulas so that it could be helpful to the forum.

 

AP

Sat, 03/16/2013 - 20:25

Mani,

There is no such formulae, but everything is derived from the understanding of the basics. Be confident enough on the concepts and you can sail through easily.

 

Regards,

Arun.

sandeepdel

Sat, 03/16/2013 - 17:52

 If any combination gives you max deviation it means that range is high for its outcome. Stand deviation is P-O/6. As we know that for each choice we need to divide by 6, so division can be ignored to come up for the answer. 

A=(23 - 16)=6, b=11,c=7 d=2. So based on it B will through max possible outcomes means 

Standard deviation is widely used for control charts also but in that we say let control the process ..means make it less risky :))

rattanw

Mon, 03/18/2013 - 12:48

 Well, thats one way of doing it.  The other way of solving questions like these, and what I find more convenient is by calculating the duration estimate for each activity using three point estimation.

 

The expected time (TE) is computed using the formula (O + 4M + P) ÷ 6.

 

optimistic time (O): the minimum possible time required to accomplish a task, assuming everything proceeds better than is normally expected

pessimistic time (P): the maximum possible time required to accomplish a task, assuming everything goes wrong (but excluding major catastrophes).

most likely time (M): the best estimate of the time required to accomplish a task, assuming everything proceeds as normal.

Option A =  16 + (4*19) + 23 divided by 6 = 19.2

Option B =  1 + (4*3) + 12 divided by 6 = 4.2

Option C =  12 + (4*15) + 19 divided by 6 = 15.2

Option D =  8 + (4*9) + 10 divided by 6 = 9

Now as Option B has the least time estimate, its considered the most risky as any slippage here can set the other activites behind.

For more details, you may also refer to blog articles at http://blog.simplilearn.com/?s=three+point+estimates