Decision Analysis for Managers

Managing Cost and Schedule Uncertainties

Project cost and schedule are almost always important uncertainties. My father, a dairy farmer and carpenter, used to say, “Make your best estimate of cost and time required for a project, and then double it.” Schedule is especially onerous, as we usually start with a critical path plan and use that as our estimate. Projects are almost always late, which usually results in going over budget as well. My friend Frank Miller at PCR (a chemical company I worked for) used to say, “Cost, schedule, quality: pick any two.”

With these two uncertainties, we’re really talking about implementation. With careful planning and detailed follow-up, the probability of cost overruns and delays can be minimized.

A friend ...