Question

The customer has seen the Technology Refresh (Version B) project schedule and the expected project finish time. However, the customer is concerned about the schedule risk of the project. Therefore, he wishes to know the following (i.e., determine the following): 1. The probability of finishing the project in 287 days. 2. The probability of finishing the project in 273 days. Hints: 1. If you wish to solve part 3 using the Z-value approach, refer to the Standard Normal Cumulative Probability Table at math.bgu.ac, (2014). 2. Note also that Microsoft Excel's NORM.DIST function can be used to determine the probabilities in part 3, which does require use of the Z-Table.

Answer 1

1. 287 days

VARIANCE = 107.83

STDEV = SQRT(VARIANCE) = 10.384

Z = DUE - EXPECTED / STDEV

EXPECTED = 278

DUE = 287

Z = 287 - 278 / 10.384 = 0.87

Z value that corresponds to 0.87 = 0.8078 or 80.78%

2. 273 days

VARIANCE = 107.83

STDEV = SQRT(VARIANCE) = 10.384

Z = DUE - EXPECTED / STDEV

EXPECTED = 278

DUE = 273

Z = 273 - 278 / 10.384 = -0.48

Z value that corresponds to -0.48 = 0.3156 or 31.56%

FORMULA

STDEV = SQRT(VARIANCE)

Z VALUE TO PERCENTAGE = NORMSDIST(Z VALUE)

Z = DUE - EXPECTED / STDEV

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