BY MARKUS SPRUNCK
Dealing with probabilities is part of our daily lives. The weather forecast mentions a rain probability of 80% and we know that we should take an umbrella with us. Calculation with probabilities is difficult for us. Especially for effort and risk estimations it comes to surprising and not always directly intuitive results.
## Collecting Probabilities is Easy
Imagine the following conversation between a project manager and a software developer:
Now, if Martin draws the result as a probability distribution, we will see a diagram like in Figure 1. ## Calculating with Probability DistributionsOur project manager makes now an estimation of five work packages and calculates the sum of the individual values (see Figure 2).Figure 3: Resulting distribution from folding of the five triangular distributions ## Probability Density Function Calculator - DownloadDownload of PCALC, the program that can do computation with probability distributions: http://home.mnet-online.de/msp/download/pcalc_1.0.4.zip (67,8 MB )## SummaryThe deviations shown in projects estimations lead to systematic over-or underestimation of work packages. Who wants to calculate with probabilities may not add up only the individual probabilities. The only exceptions are the P0 and P100 points. The idea of estimations with probabilities in projects is already several years old (see further readings). However, it is not used in operational project management, a large number of projects work with simple spread sheets. One reason is the lack of tools which can calculate with probabilities. ## Further Readings |

More >