Query- To Tim Jeromy

Discussion in 'PMP' started by _56468, May 13, 2019.

  1. _56468

    _56468 Well-Known Member

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    You are assessing two projects for risk. Project #1 has a most likely duration of 95 days with a standard deviation of 10 days, and Project #2 has a most likely duration of 110 days with a standard deviation of 5 days. All of the following statements are true except…?
    1. Project #1 is riskier than Project #2 because its standard deviation is larger
    2. Project #2 is riskier than Project #1 because its most likely duration is longer
    3. The maximum possible duration of Project #1 estimated at a 99 percent probability is longer than the most likely duration of Project #2
    4. Both projects can potentially be completed within 105 days.
     
    #1
  2. tim jerome

    tim jerome Well-Known Member
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    Project 1 and 2 are at opposition, so one of those is incorrect. If you have a range of 95 +/- 10 days, and a project 110 +/- 5 days, Project 1 has a range of 85 to 105 days, Project 2 has a range 105 to 115 days. The range of project 1 is 20 days to Project 2's 10 days.

    What does this lead you to consider?
     
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  3. _56468

    _56468 Well-Known Member

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    Project 1 is riskier, hence we can say option 2 is correct
     
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  4. Moghul.

    Moghul. Well-Known Member
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  5. _49219

    _49219 Active Member

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    Hi Tim,
    would really need you to explain this one please...
    how is number 3 correct?
    it says that project #1 max days- 105 is longer than project #2 most likely- 110.. what am I missing that makes this correct?!
    Also, for general knowledge, why is a higher range of time more riskier? wouldn't you be able to argue that the more flexibility we have the better?
    thank you.
     
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  6. _49219

    _49219 Active Member

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    Anyone that can please help? :)
     
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  7. Rajat_Kumar

    Rajat_Kumar Active Member
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    Kindly give us some time on the same.
     
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  8. tim jerome

    tim jerome Well-Known Member
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    You are assessing two projects for risk.
    Project #1 has a most likely duration of 95 days with a standard deviation of 10 days,
    95 d, +/- 10 d: 1 standard deviation
    and Project #2 has a most likely duration of 110 days with a standard deviation of 5 days.
    110 d, +/- 5 D: 1 standard Deviation

    Project 1: 95% confidence interval of 85 to 105 days.
    Project 2: 95% confidence interval of 105 to 115 days.

    2 standard deviations (2* 1 standard deviation)

    Project 1: 99% confidence interval of 75 to 115 days.
    Project 2: 99% confidence interval of 100 to 120 days.

    Project #1 is riskier than Project #2
    because its standard deviation is larger
    This is true. Larger Standard Deviation, more risk, AND
    the SD of 1 is larger than 2.

    Project #2 is riskier than Project #1 because its most likely duration is longer
    This one is not necessarily true, which is the correct
    answer for this question - it is the one you should
    select as false.

    The maximum possible duration of Project #1 estimated at a 99 percent probability is longer than the most likely duration of Project #2
    Project 1 pessimistic (2 standard deviations) = 115 days
    Project 2 Most Likely = 110 days
    This is true.

    Both projects can potentially be completed within 105 days.
    This is true. The optimistic of 2 and the pessimistic of 1
    both equal 105 days.
     
    #8
    Junaid Khan_1 and AS12345 like this.

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