ABSTRACT
Goldgate Corporation has been given a government contract to develop a new product. This project consists of three sequential major activities: (1) system design, (2) component design, and (3) testing. The engineers believe that each of these three activities includes signi‚cant uncertainty, and, therefore, total project time is uncertain. Engineers are tasked to estimate the time uncertainty associated with each activity. The contract includes a penalty clause, a charge of $100,000, if the project is not ‚nished in 130 days. What is the probability that Goldgate will ‚nish this project within 130 days? Is there a cost-effective strategy that will facilitate timely completion and avoid or reduce the probability of a penalty?
