Project Estimate Confidence Ellipses: Bid, Plan, . . . Oops!

For a number of years, I taught a graduate-level course in project management.  As one of the components of that course, student teams undertook a competitive exercise in which they would bid, plan, and then track the building of a 500-piece model (see Figure 1).  The model is one that an apt nine-year-old could build in one and one-half hours following a well-defined sequence of steps specified in the manual.  The student teams were comprised of a project manager and four or five builders.  The challenge was to complete the project in the shortest amount of time, while maintaining the level of profit stated in their bids.  Data collected from the exercise outcomes yields several interesting observations regarding project estimate error.    Continue reading “Project Estimate Confidence Ellipses: Bid, Plan, . . . Oops!”