I Remaining Time: 1 hour, 59 minutes, 35 seconds. d CARFAX- Vol » Question Compl
ID: 356023 • Letter: I
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I Remaining Time: 1 hour, 59 minutes, 35 seconds. d CARFAX- Vol » Question Completion Status: QUESTION 1 5.000 The budget for the project has been drafted. Before the cost baseline is set, it is important to include the contingency reserve. Your sponsor has asked you to develop a recommendation for the reserve. What method would you suggest to calculate the contingency fund for your project and why? What is one method that could be used and why did you choose not to use it? Q i 8 a /T T T F Paragraph + Arial X D O Q n = = = = O fi Mashu Undo 1 u © O L : 3 (12pt) = = -1E-T 2 = = T* T, PEST - - E E EDE B B B B E O - Q - HTML CSSExplanation / Answer
1.Method to calculate contingency fund I would suggest prepared probabilistic method of calculating contingency where uncertainty is are modelled in the cost estimate using statistical distribution. And cost baseline is still not decided hence we cannot use deterministic method to calculate contingency as deterministic method is a single point test and it is typically a percentage of this cost estimate. Whereas the outcome of probabilistic method is an estimate range distribution rather than single estimate. several probabilistic risk assessment methodinclude: Probability tree,, Modelling, range estimating, monetary value.
2. Importance of having a closed network diagram:
Close network diagrams helps in identifying the critical path of the project. Critical path help in determining the minimum time needed for an operation or the series ofproject activity to be completed. It also helps in crashing activities another path so as to match the time according to duration of the critical path activities. This helps in optimising the time allotted for the completion of project in predetermined duration of time.
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