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Topics: Cost Management, Earned Value Management, Scheduling
Is it correct to use P80 for baseline schedule? I am assuming that this means that 80% of projects can meet the baseline schedule / plan. Are there statistics to support my assumed understanding?
I would like to post this question to planning / scheduling professionals whether they know the best probabilistic plan to use as baseline, in lieu of any other actual information (WAG). Base on the vast actual experience out there, if you are given the choice, would you use P80 for your baseline?
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The problem is to supposse that things will happend as scheduled without to undestand that after the first version things will change constantly. You can take a close look to Barry Bohem´s Cone of Uncertainty to understand why. For me to have a baseline has no sense. There are other ways to control and monitoring outseide there from long time ago.
Sergio made a good point.
At an organization I worked for they use P50 for the project baseline and the difference between P80 and P50 as the contingency. They added the difference between P100 and P80 as the management reserve. Although, they did not actually kept the added management reserve from all projects.
Veerachai,
1. A P80 schedule completion date is established through Monte Carlo simulation of a deterministic schedule; 80% of the completion dates of simulated projects fall on or before the corresponding P80 date. For unique projects of even modest complexity, this has nothing to do with real, actual schedule completion dates.
2. A P80 schedule (whether a "baseline", "target", or "contract" schedule) is made by buffering the original, deterministic schedule (i.e. inserting time risk allowances or contingencies) so that the buffered completion date matches the P80 date.
3. Why P80? (Signing a contract with a 20% probability of failure seems unwise.) I suspect a combination of competitive pressure (i.e. risk/reward balance) and optimism bias (or similarly, a prevailing belief that risk models are overly pessimistic). In bidding industries like construction, those companies that do schedule risk analysis seem to have settled on P80 as the highest they can go without becoming uncompetitive.

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