You are a project manager working on a movie called Pirates of the Caribbean–24. Your project is to produce and deliver a prop for the set: a treasure chest. You estimate that manufacturing the chest in China and filling it with gold will take between 10 days (you have 10% confidence in this estimate) and 40 days (90% confidence) using normal distribution. Delivery time should be the same in all cases. The director has requested that you come up with an estimate with 90% confidence for both manufacturing and shipping the treasure chest. Which of the following is your estimate?
A. ~80 days B. ~50 days C. ~63 days.
The correct answer is C (63 days). You cannot add high estimates (40 days + 40 days = 80 days) together to get the duration of the project with two activities associated with 90% confidence. It cannot be 50 days ( 2*(10 days + 40 days)/2), which is the mean duration. The actual calculation can be performed using quantitative analysis tools based on Monte Carlo simulations. For more information please read Chapter 16 of the book, “What Is Project Risk? or PERT and Monte Carlo.”
You are an artist drawing a wedding portrait of Prince Garry and Princess Eden. You have two strategies:
- Draw both of them at the same time. This strategy will take 20 days. However, if at any time during the 20 days, Eden and Garry decide that they do not like the portrait, you have to start all over. The probability of them not liking your work is 60%.
- Draw Eden first and then Garry. This strategy will take 10 days for each of them. If at any time during these 10 days Eden or Garry decides that they do not like their portraits, you will need to restart your 10 days of work. The probability of either of them not liking your work is 30%.
Which strategy should you use to complete the portrait faster (on average, taking into account potential delays)?
- A. Both strategies will lead to the same duration.
- B. Strategy B is 17% faster than strategy A.
- C. Strategy B is 70% faster than strategy A.
The correct answer is B (Strategy B is 17% faster than strategy A). A similar example is discussed in Chapter 20, “Adaptive Project Management.” Splitting a risky project into smaller phases usually accelerates the project, but not as significantly as 70%. An actual calculation can be performed using event chain methodology.
Assume that you selected strategy 2 from the previous question. There could be two scenarios: (a) Eden’s and Garry’s art preferences are similar, so if Eden doesn’t like the portrait, Garry probably won’t like it either; or (b) Eden’s and Garry’s preferences are different. What is the project duration (on average, taking into account potential delays)?
- A. Situation A leads to a 50% faster completion of the portrait than situation B.
- B. Situation B leads to a 50% faster completion than situation A.
- C. Portrait completion times in situation A and B are about the same.
The correct answer is C (portrait completion times in situations A and B are about the same). The correlation between risk events plays a significant role only if probabilities are relatively high. In this case, the probability that Katie or Tom will not like the portrait is 30%; therefore, correlations will not have a significant effect on the results. See Chapter 14, “What Is Most Important: Sensitivity Analysis and Correlations.”
Billionaire Mike Zukkerfield decided to invest in a new software venture. He has three choices:
- A. A social network site for dogs and cats, so they can meet and enjoy themselves. Cost to develop is $200 million, and the probability of
success is 50%.
- B. A computer game called “You Are Doomed” for current and prospective criminals. Cost to develop is $400 million, and the probability of success is 25%.
- C. A mobile app to determine less mosquito-infested spots for camping. Cost to develop is $300 million, and the probability of success is 80%.
In which venture should Mike Zukkerfield invest?
The correct answer is C. This question relates to the notion of expected value. Expected value is a probability-weighted average of all outcomes that is calculated by multiplying each possible outcome by its probability of occurrence and then summing the results. Probability multiplied by outcome is lower in C ($300 M × 80% = $240 M). We will learn about expected value in chapter 4, “What Is Rational Choice? A Brief Introduction to Decision Theory.”
You are in Anchorage, Alaska, to film the new National Lampoon’s Vacation in Hawaii movie starring Chevy Chase. If snow starts falling while filming a beach scene, you will have to restart 10 days of shooting. The chance of snowfall is 30%, and the official weather forecast says that there is an equal probability of snowfall for each of the 10 days. However, you think that it is most likely to snow close to the end of filming rather than at the beginning. Assuming that both forecasts are equally accurate, which situation will result in the longest time to complete filming, taking into account potential delays?
- A. Your forecast will lead to a 5% longer filming time than the official weather forecast.
- B. The official forecast will lead to a 5% longer filming time than your forecast.
- C. Filming will take about the same time regardless of the forecast.
The correct answer is A (your forecast will lead to a 5% longer filming time than the official weather forecast). The moment of risk (when the snow falls) may significantly affect duration. See Chapter 17, “A Series of Unfortunate Events, or Event Chain Methodology.”
You are involved in a project to promote rapper MC Uglyface. Despite spending $1 million for ads, video clips, and marketing promotions, MC Uglyface is still at the bottom of the charts. What option would you choose?
- A. One more $50,000 ad campaign because similar campaigns for other rappers were successful in 50% of the cases.
- B. One more $100,000 ad campaign because similar campaigns for other rappers were successful in 75% of the cases.
- C. Give up on MC Uglyface and start promoting the rapper BadPosture.
Whatever money you have already invested in MC Uglyface’s career is a sunk cost. The high success rate of the ad campaign applies to other rappers, and there is evidence that more ad campaigns will not help MC Uglyface. We recommend answer C (give up with MC Uglyface and start promoting the rapper BadPosture). For more information about sunk cost, read Chapter 2, “’Gut Feel’ vs. Decision Analysis: An Introduction to the Psychology of Project Decision-Making ” and Chapter 20, “Adaptive Project Management.”
You met a young actress who you believe can be an A-list actress and celebrity in a few years, so you offer to be her divorce lawyer. What is the chance that you will earn millions in attorney fees from her if there is a 10% chance that she will become a celebrity, a 100% chance that she will be married, a 100% chance that she will be divorced, and a 10% chance that she will choose you to be her divorce lawyer?
A. 10% B. 1% C. 0.1% D. 100%
The correct answer is B (1%.) You need to multiply all probabilities: 0.1 (become celebrity) * 1 (married) * 1 (divorced) * 0.1 (choose lawyer) = 0.01. This question is related to the bias called “overestimating the probability of conjunctive events”: people tend to choose much higher numbers. See Appendix B, “Heuristics and Biases in Project Management.”
You are a screenplay writer trying to figure out what type of screenplay will have the best chance of being produced. As part of this decision, you have reviewed historical data related to all the screenplays you know and have put them in the table below. What type of screenplay will have highest probability of not being produced? Screenplay not produced Screenplay produced.
- A. Action: Screenplay not produced – 20 times, Screenplay not produced – 4 times
- B. Love stories: Screenplay not produced -11 times, Screenplay not produced – 2 times
- C. Children stories: Screenplay not produced – 15 times, Screenplay not produced – 3 times
The correct answer is B (love stories). This question is related to the covariation assessment effect. People tend to pay more attention to high absolute values rather than relative indicators of success or failure. The relative chance that the screenplay will be produced is higher for love stories (11/2 = 5.5). See Chapter 14, “Choosing What Is Most Important: Sensitivity Analysis and Correlations.”
Your project is to buy new clothes for the fall season. You read a number of fashion magazines and see that most experts agree that a mixture of bright and pale tones will be in style during the fall. A few magazines also stress the revival of a historical theme. In addition, some articles emphasize a trend to pink and blue colors. Which description do you think will be the most probable?
- A. Bright hues mixed with pale tones.
- B. Bright hues mixed with pale tones, combined with purity of pink and blue colors.
- C. Bright hues mixed with pale tones, combined with purity of pink and blue colors that bring a sense of energy and refinement to historical and classic themes.
The correct answer is A (short descriptions such as “Bright hues mixed with pale tones” are more general and therefore more probable). The more conditions that you add to a description, the less likely that all of them will be met. This question is related to the representativeness heuristic and particularly to the conjunction fallacy. These are discussed in Chapter 2, “’Gut Feel’ vs. Decision Analysis: An Introduction to the Psychology of Project Decision-Making.”
You are a stunt double in a western movie. Despite all your skills, you fall from your horse in 16% of all the shots. The occurrence of these falls appears to be completely random; it does not seem to have any correlation to how hard you try, what horse you use, the weather conditions, the filming locale, or anything else. In this movie, you have already fallen from your horse 7 times out of 35 shots. Are you going to be lucky the next time around? How many times do you estimate you will fall from the horse in the remaining 25 shots?
A. 5 times B. 2 times C. 4 times
The correct answer is C (4 times). The probability always remains the same: 16% (25 trials * 16% = 4 times). This question is related to the gambler’s fallacy. See Appendix B, Heuristics and Biases in Project Management.”
Now score yourself:
Number of Correct Answers 8-10:
You are an ace of project management. Your intuition as a project manager is outstanding. (The bad news is that this book may not improve your excellent mental abilities.)
Number of Correct Answers 4-7:
You are a king or queen of project management. Your intuition is very good. But you can still improve your decision-making skills by reading this book.
Number of Correct Answers 0-3:
You are part of the general population of project managers. Don’t worry. Most people have difficulties answering these questions without running a computer analysis. In this book you will find answers to these and many other questions.