Question on Risk

Submitted by rwmv on Sun, 05/12/2013 - 14:33

 Assuming the ends of the range of estimates are +/-3 sigma from the mean, which of the following range estimates involves the LEAST RISK?

a. 30, days, plus or minus 5 days

b. 22-30 days

c. Optimistic=20 days, most likely=30 days, pessimistic=33 days

d. Mean of 28 days

Please let me know the right answer and explanation please of how to handle such questions.
I have no clue on this one.
 

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cnpatilpmp2012 (not verified)

Sun, 05/12/2013 - 14:49

By going with your above options it should be B option just becasue it is 8 days range. The Option A has +/- 5 equals to 10 days and then your option C is 13 days.. the 3 sigma is just a confusing term...not relevant at all.


Regards


CN Patil

BK

Sun, 05/12/2013 - 14:57

 I feel it should be C. As it has 13 days range. more range is better less risky.

lemme know the correct ans.

crushPMP's picture

crushPMP

Sun, 05/12/2013 - 16:46

 BK, less range is less risk.

I'll go with B on this one.

BK

Sun, 05/12/2013 - 17:15

 yes..correct,,I got it all wrong.. :(

sanskrit

Sun, 05/12/2013 - 23:25

 

 I Think its B 

 

rwmv

Mon, 05/13/2013 - 04:28

 Correct Answer is C. 
Can anyone please explain how ? I didn't understand these ranges at all.

 

fr1.an

Mon, 05/13/2013 - 06:21

The correct answer is C.

A. 30 +/-5 with SD = 5. The question is talking about a standard deviation of 3, i.e. 3 sigma, so A is wrong

B. 22-30 = 26 +/- 4. The is above the acceptable standard deviation (SD)

C. PERT Mean = [P+6M+O]/6 = [33+4(30)+20]/6 = 28.8;  Standard Deviation = (P-O)/6 = (33-20)/6 = 2.16; so this is within the acceptable value. 28.8 +/- 2.16

D. Mean of 28 doesn't say anything about deviation from mean, just a mean, not a measured range.

 

That is the way I see it.

bridge

Mon, 05/13/2013 - 07:44

This question is directly from Rita.

 

Question is on Page 405.  Answer on Page 412 (7th Edition).

Correct answer is C.

Read the explanation. All the explanation give on this page are incorrect.

motivation

Mon, 05/13/2013 - 12:04

 Even Rita has not explained it well. :(

acharya_geeta

Mon, 05/13/2013 - 12:20

 Answer to this question is B. Explanation: Estimate with the smallest range is the least risky 

Question from Rita's book and the question above differs in the values in option C. In Rita's book, optimistic estimate = 26 days and pessimistic estimate = 33, so the range becomes 7 days which is less than the range in option B (8 days). But in the above question, range in option C is 13 days which is way more than the range in option B (8 days). 

bridge

Mon, 05/13/2013 - 14:35

 Perfact .

motivation

Tue, 05/14/2013 - 05:25

Perfect....

Thanks ! 

Tallman

Sun, 06/23/2013 - 05:14

Correct answer is b. 22-30 days which is the narrow range.

I look at it like this, in project 'A' I have many risks which can cause schedule change, and in Project 'B' I have few risks which can cause schedule change, for same probability of completion period, which project I can give narrow range for completion date? obviously, where the risks are few and I can be more cirtain and hence i can give narrow range.For project A I will have to give a wider range due to higher risks.