All project variables - cost, schedule, technical and operational performance, risk are random variables. These variables represent uncertainty in the outcome of the project. This uncertainty creates risk. This risk must be "handled" in some way or it will unfavorably impact the success of the proejct.

1. ! Naturally
occurring
uncertainty
and
its
resul.ng
risk,
impacts
the
probability
of
a
successful
outcome.
What
is
the
probability
of
making
a
desired
comple6on
date
or
cost
target?
1
All
Program
Ac.vi.es
have
Naturally
Occurring
Uncertainty
! The
irreducible
sta.s.cal
behavior
of
these
ac.vi.es,
their
arrangement
in
a
network
of
ac.vi.es,
and
correla.on
between
their
behaviors
creates
risk.
! Adding
margin
protects
the
outcome
from
the
impact
of
this
naturally
occurring
uncertainty
14.
Risk