Supriya Pakala
Project Management
MGMT 562 8 AM
Individual HW 1
1) Based on the cost estimates, what is the theoretical mean (average) cost of building the
house, and how does it compare to the budget?
The theoretical mean of building the house is $338,375. This is if we calculate using the
formula (a+4m+b)/6. The overall budget for the house is $350,000. Based on the mean that
has been calculated, we’re within the budget to build the house. The average cost of athe
building if we calculate it theoretically is 96.6% of the Smith’s Family’s total budget.
2) Simulate the cost of building the house in @RISK or similar software. What is the expected
cost of building the house from the simulation? How do you reconcile any differences
