Question: You know from experience that Alison is unpredictable. A more realistic estimate of how long it will take her to program feature A is that
You know from experience that Alison is unpredictable. A more realistic estimate of how long it will take her to program feature A is that it is randomly distributed. With 50% probability, it will take Alison 60 days to program feature A and with 50%probability, it will take her 80 days to program feature A. You also know from experience that Bernard responds well to incentives. For every $1,000 extra that you pay him, he will finish the programming one day faster. So, for instance, if you pay him $5,000 extra, he will program feature B in 75 days instead of 80. You need to tell him in advance, before he starts his work, how fast you want him to do the work and how much you will pay him. In contrast to Allison, Bernard is very reliable. You are considering to give Bernard a target completion time of 70 days, and hence paying him $10,000 extra. Is this a good investment
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