Question

All five members of a project team add 20% to their individual serial activities as a safety margin and submit their time estimates to the project manager. The manager adds the activity length estimates together and adds 20% for his personal safety margin. Then, anticipating a cut by top management, he adds another 20% to his final project estimate. Much to his surprise, top management leaves his project alone. How much of a cushion is now built into the project?

Answer 1

Let the initial estimated value be X

All five members of a project team add 20% to their individual serial activities as a safety margin and submit their time estimates to the project manager.

Hence, The value of the estimate manager receives from his project team = 1.2X

Now, the manager adds 20% for his personal safety margin initially

Thus, the new amount becomes = 1.2*1.2X = 1.44X

Then, anticipating a cut by top management, he adds another 20% to his final project estimate.

Again thus the final amount becomes = 1.2*1.44X = 1.728X

No change done by the top management.

Hence, the cushion value present in the project now = 1.728X - X

                                                                         = 0.728X

Thus, the cushion = 0.728X / X * 100% = 72.8%