Project Management: Achieving Competitive Advantage, Fifth Edition

The Critical Chain Solution to Project Scheduling

1. LO 11.4 Distinguish between critical path and critical chain project scheduling techniques.

Goldratt’s solution to the variables involved in project scheduling involves the aggregation, or collectivizing, of all project risk in the form of uncertain duration estimates and completion times. The aggregation of risk is a well-known phenomenon in the insurance business.18 The central limit theorem states that if a number of probability distributions are summed, the variance of the sum equals the sum of the variances of individual distributions. This formula is given, where there are n independent distributions of equal variance V, as:

$$V_{\Sigma }=n\times V$$

where $V_{\Sigma }$ is the variance of the sum. ...