Project Management

Dealing with Risk and Uncertainty 155

Step 5. Evaluate and Interpret the Results. Figure 8-8 illus-
trates the various outputs that are available.
Figure 8-8(a) is called a frequency distribution chart; it
shows how many times your project came in at a given overall
final cost. Note the characteristic shape of a normal distribution.

1.3 Purchase Materials

1.3.1 Equipment

1.3.2 Electrical

1.3.3 Process Control

1.4 Installation

1.4.1 Site Prep

1.4.2 Concrete

1.4.3 Steel

1.4.4 Buildings

1.4.5 Equipment

1.4.6 Piping

1.4.7 Electrical

1.4.8 Process Control

1.4.9 Coatings

1.4.10 Other

Task Name MinimumCost LikelyMost MaximumCost

$200,000

$20,000

$30,000

$10,000

$25,000

$30,000

$25,000

$90,000

$110,000

$90,000

$100,000

$10,000

$10,000

$190,000

$18,000

$27,000

$9,500

$22,500

$27,000

$22,500

$81,000

$99,000

$81,000

$90,000

$9,000

$9,000

$280,000

$24,000

$39,000

$31,300

$15,000

Total $1,100,000

Risk

Profile

A

A

D

B

$12,000 C

C

$130,000 B

$117,000 A

$137,500 A

$126,000 D

D

$39,000 B

$37,500 B

$20,000 C

A

Figure 8-6. Typical PERT input form

T

E

A

M

F

L

Y

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