EXERCISE 1) Calculate contingency reserves using expected value method. PROJECT DATA Project One %Probability Cost of of Contingencies Contingency List of contingencies Reserve Extra personnel to project 23570 0.04 Outsourcing to outside contractors 16900 0.06 Failing to meet deadline 46000 0.08 Equipment breakdown 2300 0.03 TOTAL RESERVE Project Two %Probability Cost of of Contingencies Contingency List of contingencies Reserve extra personnel to project 64780 0.06 outsourcing to outside contractors 42000 0.05 Failing to meet deadline 19700 0.09 equipment breakdown 4200 0.02 TOTAL RESERVE Project Three %Probability Cost of of Contingencies Contingency List of contingencies Reserve extra personnel to project 35600 0.07 outsourcing to outside contractors 22000 0.07 Failing to meet deadline 52000 0.12 equipment breakdown 6700 0.03 TOTAL RESERVE Project Four %Probability Cost of of Contingencies Contingency List of contingencies Reserve extra personnel to project 34600 0.03 outsourcing to outside contractors 19300 0.03 Failing to meet deadline 24700 0.08 equipment breakdown 4500 0.02 TOTAL RESERVE