Estimating probabilities in project management can be done either subjectively or by using a relative frequency approach based on historical data. Subjective assessment of probabilities can be affected by a number of cognitive biases, such as wishful thinking and overestimation of the probabilities of compound events. A number of methods can be used to make judgments about probabilities. Qualitative risk analysis helps prioritize risks based on their probability and impact.
APPROACHES TO ESTIMATING PROBABILITIES
Wrong estimations of probabilities can lead to major project problems, including failure. During the ...