Wednesday 30 December 2015

Probabilities outside of the distributions cut off

December 23, 2015

Q: Probabilities outside of the distributions cut off

Looks like the distribution in RiskyProject only considers the duration from Low to High (there is a kind of 'cut' at the beginning/end). Is that right? Because sometimes projects/tasks have so much delay that they will take longer than the highest duration.

A: For the distribution attached, only the probability distribution from Low to High is used in the simulation. Therefore significant delays, which would occur outside of these boundaries is not modeled. Normal and lognormal distributions are unbounded; therefore it is possible that they could go to infinity. So it could a chance that duration of the project will be very long which could be unrealistic. Therefore, with these distribution types we use a cut off. The solutions to this are:
- increase cut off by increasing the range and then playing with std. deviation parameter or selecting P1/P99
- use another statistical distribution, such as beta. It may also require increasing the ranges.

For more information visit: www.intaver.com
http://www.intaver.com/IntaverFrm/viewtopic.php?f=2&t=1199


No comments:

Post a Comment