Tips on using this forum..

(1) Explain your problem, don't simply post "This isn't working". What were you doing when you faced the problem? What have you tried to resolve - did you look for a solution using "Search" ? Has it happened just once or several times?

(2) It's also good to get feedback when a solution is found, return to the original post to explain how it was resolved so that more people can also use the results.

Risk Calculation

2 replies [Last post]
shailesh wagh
User offline. Last seen 3 years 50 weeks ago. Offline
Joined: 13 Jun 2016
Posts: 2
Groups: None

Suppose the contract contains a penalty clause of $40,000 per month for a late delivery of THE  SYSTEM.  There is general agreement among the technical team that they have a 50% probability of being late by one month, a 10% probability of being late by two months and a 5% probability of being late by three months.  What is your risk exposure?

scheduled delivery is after 24 month and 3 month for beta testing ..(info if needed)


Jaga deesan
User offline. Last seen 1 year 1 week ago. Offline
Joined: 11 Nov 2018
Posts: 10
Groups: None

Dear Shailesh Wagh,

For simple and clear understanding of Project Risk Management in 20 minutes, please may view the YouTube video given in the below link


R. Jagadeesan

Rafael Davila
User offline. Last seen 7 hours 45 min ago. Offline
Joined: 1 Mar 2004
Posts: 4864

This problem as presented is based on a single dominant chain. While it looks like both methods can give the same result it is not necessarily valid for the common case where more than a single chain occurs. In order to avoid the Flaw of Averages and falling into the Merge Bias issue it is better to use Monte Carlo methods.