# Query- To Tim Jeromy

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

1. ### _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 exceptâ€¦?
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 Well-Known Member Trainer

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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?

#2
3. ### _56468 Well-Known Member

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

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True

#4
5. ### _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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7. ### Rajat_Kumar Active Member Simplilearn SupportAlumni

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Kindly give us some time on the same.

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8. ### tim jerome Well-Known Member Trainer

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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
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