This appendix is intended to serve as a brief review of the probability and statistics concepts used in this text. Students who require more review than is available in this appendix should consult one of the texts listed in the bibliography.
Uncertainty in project management is a fact of life. The duration of project activities, the costs of various resources, and the timing of a technological change all exemplify the types of uncertainties encountered when managing projects. Each of these random variables is more or less uncertain. Further, we do not know when or if a given activity will be successfully completed, a senior official will approve a project, or a piece of software will run without problems. Each event is more or less uncertain. We do not know the values that each variable and event will assume.
In common terminology we reflect our uncertainty with such phrases as "not very likely," "not a chance," "for sure." While these descriptive terms communicate one's feeling regarding the chances of a particular event's occurrence, they simply are not precise enough to allow analysis of chances and odds.
Simply put, probability is a number on a scale used to measure uncertainty. The range of the probability scale is from 0 to 1, with a 0 probability indicating that an event has no chance of occurring and a probability of 1 indicating that an event is absolutely certain to occur. The more likely an event is to occur, the closer ...