How Much Management Reserve Do You Need?
The decision-making process is one of the most important jobs of a project manager. By definition, it is the cognitive process resulting in selecting a belief or a course of action among several possibilities. Effective decision-making requires forecasting the outcome of each option based on the probability of alternative scenarios. It easy to make the correct decisions in the absence of uncertainty. However, a core function of project management is to manage the uncertainty on a project or portfolio derived from risk and variability.
This article will validate how the use of basic statistical knowledge combined with the three-point estimation method and the cumulative probability distribution analysis can generate a quantifiable approach to forecasting management reserve on your project or portfolio, therefore adding value to your decision-making process while managing uncertainty.
The stock market responds uniquely to a multiplicity of causality factors in which variability can be predictive based on probable economic outcomes; even individual stock performance can somewhat be predicted using correlation coefficients. But as an investor, how do you determine which stock to invest in? Which stock will yield the highest predictable return? How risky is the performance of the stock you are considering?
Most companies view projects and
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