Page 73 - The Six Sigma Project Planner

Evaluating Uncertainty
Because projects involve the future, their paths are always uncertain. It is common to
find that unanticipated events lead to project delays, cost overruns, quality problems,
and even outright failure.
One way to deal with uncertainty and avoid unpleasant outcomes is to conduct what-if
analysis to allow the team to anticipate and plan for likely future events. What-if
analysis can also help the team improve project performance by manipulating the
future to create situations beneficial to project success. For example, a key person might
be persuaded to reschedule a vacation that occurs at a critical time in the project. The
task list, project schedule, and analytical charts (Gantt, milestone, and network charts)
completed above provide you with tools that can be used to explore various project
scenarios and options. For example:
• What if our project had first priority for all of the resources? (This is known as
“crash analysis.”)

• What if the work calendar of a key resource were rearranged?
• What if a particular resource isn’t available when the project needs it?

In this part of the project plan, the project team will review the project plan’s
robustness. That is, team members will evaluate the sensitivity of the plan to changing
circumstances. The information obtained will be used to modify the project plan in
ways that make it less likely to “break” as the future unfolds in various ways.

Variable Activity, Path, and Project Duration
Actually, the team already has some important information on uncertainty: the activity
duration estimates obtained earlier. The optimistic, most likely, and pessimistic
estimates differ from one another precisely because the people who provided the
estimates were uncertain of the future. This information was used above to calculate
weighted averages, which are statistical estimates of the expected duration of a given
activity. However, there is addition information embedded in these estimates that will
allow us to develop statistical probability distributions for the various paths as well as
for the overall project schedule. The worksheet that follows will help you prepare
variability estimates for the overall project.

Example of Evaluating Duration Estimates
A simple project consists of only seven tasks, with the estimated durations shown in the
table below.

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