Delaying the Hardware Expansion

Delaying the Hardware Expansion

Because the hardware expansion could be completed in ve months,

Stearns thought continuing with the all-out development of the software

for the next ve months would be prudent before committing to the

hardware expansion. The software progress of the next ve months would

certainly give him a better idea of the chances of completing the project

on schedule. If the ve-month progress were favorable, then Stearns

reasoned that the chances of completing the project on time would rise to

90 percent. If the progress were unfavorable, the chances would decrease

to something like 40 percent. However, the distinct possibility also existed

that the progress over the next ve months would leave him in the same

position in which he now found himself, with an 80 percent probability of

completing the project as scheduled.

Lecture 9 (SEEM 4103) Cityu, SEEM July 6, 2015 11 / 14

Stearns believed that this latter event (not learning anything new in the

next ve months) had a probability of about 30 percent. He thought

carefully about how to distribute the remaining 70 percent probability

between the \favorable progress" and \unfavorable progress" events and

soon realized that, in order to remain consistent with all of his earlier

assessments,