Tim Please help in understanding this question

Discussion in 'PMP' started by DIPTI PARMAR, May 19, 2020.

  1. DIPTI PARMAR

    DIPTI PARMAR Member

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    Hello Tim, Good Day!

    Please help me understand this calculation...from Risk Management...the question and explanation as below:

    11-20 Using the following information and a normal distribution curve, what is the probability that
    the project will be completed in 64 days?
    Optimistic time is 48 days. Pessimistic time is 72 days. Most likely time is 60 days
    a) 16%
    b) 84%
    c) 50%
    d) 100%
    Answer: B – To Determine the probability of completing in 64 days, the following steps are required:
    1. Determine the weighted average using the formula {Optimistic + 4(Most Likely) + Pessimistic}/6.
    2. Determine the standard deviation using the formula (Pessimistic – Optimistic) / 6.
    In the normal distribution curve, there is a 68% probability that the outcome will be within 1 standard
    deviation from the mean. There is a 95% probability that the result will fall within 2 standard deviations
    from the mean and a 99.73% probability that the result will fall within 3 standard deviations from the
    mean. If the mean is at the 50% point and there is a 68% probability of the result falling within plus or
    minus one standard deviation of the mean, then the probability of 1 standard deviation is divided by 2.
    The result is 34. Adding 34 to 50% = 84%. Subtracting 34 from 50% = 16%. The Standard deviation in this
    example is 4. The mean is 60. 60 + 4 = 64 or one standard deviation from the mean. 50% + 34 = 84%
     
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  2. tim jerome

    tim jerome Well-Known Member
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    So, if you look at your weighted 3-point estimate, you get to a 60-day 'm' - that's your initial duration.

    Understanding the central limit theorem and the normal distribution, you remember that there is a 50% chance you'll be under 60 days, and 50% you'll be over 60 days. Therefore, A and C cannot be right, since 64 days is greater than 60 days. This also means that a greater duration estimate will lend you a higher probability than 50%.

    The answer cannot be 100% (we're working with probabilities here) the answer is 84%.

    so, we now have 4 data points:
    A 50% chance for a 60-day duration, and
    an 84% chance for a 64-day duration.

    That means you have an extra 4 days that represent an increase in 34% chance of probability.
    Does that 34% probability sound familiar?

    It should - it's 1 standard deviation to the right (or the left) of your 'm' (mean or calculated average).

    Can we prove it? Sure - use s = (P-O)/6, and you'll receive your 4 days. Therefore,
    60 plus 4 days in duration is correlated with 50% + 34% probability.
     
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  3. DIPTI PARMAR

    DIPTI PARMAR Member

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    Thank you Tim!! Nicely Simplified and clear now.
     
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