You are estimating the cost of a project and you believe it will take 1500 hours of labor and $200,000 of material. Labor costs an average of $75 an hour.

You realize these are just estimates, and after a bit of thought, you decide that:

Your labor hours could be as high as 2000 hours, or as low as 1250 hours (1500 hours is the most likely value). Hint: Use a triangular distribution.

Your labor rate is just an average and is actually normally distributed around $75, with a standard deviation of $10.

Your materials could actually cost anywhere between $180,000,00 and $220,000, with all values between those limits equally likely. Hint: use a uniform distribution.

Problem:

Using Crystal Ball, develop and post the distribution of total costs.

For what value of estimated cost will the actual cost have a 90% chance of being that or less?

Answer rating: 100% (QA)

Sim 1 2 3 4 5 7 8 9 10 11 12 13 14 15 16 17 18 19 Using Excel to generate numbers from the distribut... View the full answer