A Project That Consists of Six Consecutive Tasks That Have

question 59

Essay

A project that consists of six consecutive tasks that have average duration and worst-case duration estimates (in days)as shown in the table.Use Newbold's method to determine the aggregated two sigma buffer for this project.How does the project buffer computed this way compare with the estimation for project buffer offered by Goldratt? $$\begin{array} { | l | l | l | } \hline \text { Activity } & \text { Average } & \text { Worst-Case } \\\hline \text { A } & 14 & 21 \\\hline \text { B } & 20 & 28 \\\hline \text { C } & 16 & 23 \\\hline \text { D } & 8 & 15 \\\hline \text { E } & 9 & 19 \\\hline\end{array}$$

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Definitions:

Fair Value

An estimate of the price at which an asset or liability would be traded in a fair transaction between willing and knowledgeable participants.