In project management it is important to understand key constraints, e.g. cost.
ID: 3023773 • Letter: I
Question
In project management it is important to understand key constraints, e.g. cost. time and quality In particular, ability to properly estimate project completion time and cost are critical for the company's reputation. It can be done based on historical data from similar past projects. Let's assume that project quality is not affected by project costs or its duration. The initial phase of a construction project entails three activities that must be undertaken sequentially (that is the next activity cannot begin until the previous one is complete) and the time to complete each activity is a random variable with the following parameters Find the expected time of project completion and the range of possible completion times, assuming they follow distributions with means and standard deviations listed in the table. Assume also that the project costs C = C0 + d-5,000, where fixed cost Co= $15,000 and d is the number of days a project need for completion. Given previous results, calculate expected project cost and its standard deviation. What is the mean time to complete the project? What is the standard deviation of the completion time for the entire project? What are possible project completion times with 95% probability? Hint: Use Empirical Rule. What is expected cost of the project? What is the standard deviation of the project cost?Explanation / Answer
A. mean time of the project ( events happens sequentially )= 21+15+48 =84
b Standard deviaiton of the project =sqrt( 4+25+49) =8.72
C.Possible completion times with 95% probability
using empirical rule of probability P(Mean-2*SD <X< mean+2*SDmean) = 0.95
Mean-2SD = 84-2*8.72 = 66.56; Mean+28.72 = 84+2*14 = 101.44
D. Expected cost of the project = E(C0)+5000*E(d) =15,000+ (5000*84) = $435,000
E.Standard deviation of the project cost = Sqrt{ Var(C0+5000*d)}
=Sqrt{5000^2* Var(d)}= 5000*8.72 = $43600