You can refer to my other article on three point estimation formulas to do so. You can also use Triangular Distribution to calculate the mean and Standard Deviation. Note: PERT formula provides a close approximation by using probability distribution technique called Beta Distribution. It is used to calculate weighted mean (average) of three different estimated values. PERT formula is one of the ways to do three point estimation.
#Probability weighted standard deviation series
We say variation or the standard deviation of Series B is higher than that of Series A. However, numbers in the series B are far apart as compared to Series A. The mean (simple average) of both the series is 6. A high standard deviation indicates that the observations (series of numbers) are spread out over a large range.įor example, lest us consider the following two series: A low Standard Deviation indicates that the observations (series of numbers) are very close to the Mean. Standard Deviation shows the Variation from the Mean. In Statistics and Probability Theory, Standard Deviation is usually represented by the symbol of Sigma, σ. The Mean can be determined by finding either the Simple Average or a Weighted Average of a series of numbers. The Mean is calculated on a series of numbers and can be referred as a Central Value of these numbers. In Statistics, Mean and Standard Deviation have a special significance. We can use Standard Deviation formula to answer this question. In the example from previous section, what is the Probability of reaching point B in 105 minutes? Those were easy questions but how would you respond to the following question? Or you would say probability of getting ‘Six’ is 16.67% or 1/6. You would think a bit more and then say there is a 1 in 6 chance of getting a ‘Six’. Let’s answer another question, “What is the chance of getting a ‘Six’ in a throw of a dice?” Or you might say the probability of getting ‘Heads’ is 50% or 1/2. There is a 50% chance of getting a Heads.
Let’s answer this question, “What is the chance of getting a ‘Heads’ in a toss of a coin?” Statistical Probability and Project Management Let us start with a small example to understand what probability is and how it is used in project management. Standard Deviation is an important concept in Statistics. Importance of Standard Deviation in PERT Estimation
#Probability weighted standard deviation how to
You can refer to my article on how to use PERT and CPM together to understand it further. Variance does not have much significance for a single task but it becomes extremely useful while calculating duration of a sequence of tasks. The Variance for PERT can be calculated by using the following formula: I will elaborate it further in the next section. So, the formula suggests that there could be 30 minutes Variation (Deviation) from the Mean.
The Standard Deviation for PERT can be calculated by using the following formula:įor our example, Standard Deviation come out to be: It means that there is a fair chance (Central Value) of completing the task (going from point A to point B) in 105 minutes. Let’s apply the PERT formula on the above values. In that example, we wanted to find out the time required to go from point A to point B with the following three values: Let us use the same example from the above mentioned article and apply PERT formula. It will help you to understand the fundamentals of PERT formula and Beta Distribution. You should read my other article on three point estimation techniques before reading further. Let’s understand how we can apply standard deviation on the PERT formula. The weighted average in PERT is based on an approximate formula derived from a statistical distribution technique called Beta Distribution. In this technique, a weighted average (mean) of three different estimates is used to determine the final estimate. This technique is used to determine duration and cost estimates of a task. PERT is an acronym for Program Evaluation and Review technique. You might be looking to understand the usage of variance and standard deviation in PERT formula.
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