Probability Methods for Cost Uncertainty Analysis, 2nd Edition

F

Cost

(x)

Probability That Cost ≤ x

0.95

0.7

0.4

($M)

x

23.5

30.5 43.5

Cumulative Probability Distribution for Exercise 1.3

12 Probability Methods for Cost Uncertainty Analysis

uncertainties. Formulating and documenting a supporting rationale, that

summarizes the team’s collective insights into these uncertainties, is the

critical part of the process. Without a well-documented rationale, the credibility

of the analysis can be easily questioned.

The details of the analysis methodology are important and should also

be documented. The methodology must be technically sound and offer

value-added problem structur