Académique Documents
Professionnel Documents
Culture Documents
Part I
Top Five Ideas from
Statistics that help
Project Management
John C Goodpasture
Square Peg Consulting
www.sqpegconsulting.com
www.johngoodpasture.com
Outcome Values
Copyright Square Peg Consulting 2009, Fair Use Permitted www.sqpegconsulting.com 5
Central limit and Law of Large Numbers work
together
• The consequence of the LLN upon the CLT is that the EV of the bell
curve is an excellent estimate of the true mean of the population
• The consequence of the CLT upon the LLN is that the bell curve
provides additional information about the quality of the value set.
• Example: 10 work-packages
• 3-point estimates with probabilities,
~ 80-20 rule
• EV = value x probability*
• Variance** =
Value probability x ( LLN EV – Value)2
• Standard deviation = √(variance)
• Expected value (budget): $549.7
• 84% confidence the budget will be
< $549.7 + $40.8 = $590.5
– EV + 1 standard deviation
1. Step 1
• Make a 3-point estimate for
every outcome—work
package or activity
– Most pessimistic, most
optimistic and most likely
4 tasks, 2 resources
Time
Copyright Square Peg Consulting 2009, Fair Use Permitted www.sqpegconsulting.com 13
Read more about it!