3. Based on these estimates and the critical path, the project duration is estimated at 149 days. But an AET salesperson in the Southeast Region has discovered that the competing A/P package (with significant improvements) is scheduled for delivery in approximately 145 days. The sales force is very anxious to beat that delivery time. The executive committee asks Tom for an estimated probability of reducing his expected project duration by two days.

4. The executive committee is advised by Tom that after all the estimating was completed, he determined that one of his two critical systems analysts might have to move out of the area for critical family reasons. Tom is still very confident that with some staff rearrangements, assistance from a subcontractor, and some hands on activities on his part he can still meet the original delivery date, based on 149 days. This news is very disconcerting to the committee and the sales staff. At this point, the committee decides that based on the most recent delivery performance of AET, a modified, comfortable delivery date should be communicated to AET clients one that Tom and his staff are very likely to meet. Consequently, Tom is asked to calculate what the expected project duration would have to be to ensure a 98 percent chance of completion within 160 daysthat is a published, drop dead date that can be communicated to the clients.

248 Chapler 7 Managing Risk ADVANTAGE ENERGY TECHNOLOGY (AET)-ACCOUNTS PAYABLE SYSTEM The AET sales department has been concerned about a new start-up company that is aboul to release an accounts payable system. Their investigation indicates that this tiew package will provide features which will seriously compete with AET's current Accounts Payable system and in some cases exceed what AET offers. Tom Wright, senior applications developer at AET, has been given the responsibil- ity of analyzing, designing, developing, and delivering a new accounts payable system (AXP) for AET customers. Complicating the issue is the concern of the sales department about AET's recent inability to meet promised delivery dates. They have convinced CEO (Larry Martain) that a significant marketing effort will have to be expended to convince the clients they should wait for the AET product rather than jump to a package provided by a new entry to the petroleum software business. Companion to this effort is the importance of the performance of the software development group. Consequently, Tom has decided to take the following action: tighten up the estimat- ing effort by his developers; incorporate some new estimating procedures, and use some PERT techniques to generate probabilities associated with his delivery dates, Tommi's planning learn made a lirsi-cutial the set of activities and associated durations: Time in Workdays Most Likely Dur. Optimistic Dur. Pessimistic Dur. Immediate Predecessor Critical Path 1 1 1 2 5 3 4 2 2 3 4 5 6 12 7 10 5 5 7 7 Task Name ACCOUNTS PAYABLE SYSTEM Planning meeting Team assignments Program specification Customer requirements Feasibility study Systems analysis Prelim budget & schedule Functional specification Prelim design Configuration & perf needs Hardware requirements System specification Detailed design Program specification Programming first phase Documentation Prototype Development User lestiny & feedback Programming-second phase Beta testing Final documentation pkg Training pkg Product release 8 3 6 1 3 10 3 4 5 12 8 27 14 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 10 5 8 2 5 12 4 6 7 14 10 32 16 7 7 14 5 8 9 16 12 37 18 9 10 11 10 12, 13 14 15 10 9 5 12 10 18 9 4 3 7 14 12 20 10 5 5 16 14 22 11 6 7 16 19 16 21 17, 20 215S, 23 22, 23, 24 S-art to Start