Flaw of Averages Trilogy
The Flaw of Averages, which states that plans based “average” assumptions are wrong on average, is a term coined by Dr. Sam Savage in 2000 to describe the systematic errors that occur when single numbers, usually averages, are substituted for uncertainties. The discipline of probability management helps cure this problem by communicating and calculating uncertainties as auditable data.
These models explain why projects are so often behind schedule, below projection, and beyond budget.
Behind Schedule
The average project completion time is greater than what is predicted by the average durations of the underlying tasks, because the project is not done until the last task is done.
Below Projection
The average profit is less than the profit of the average demand, because there is no upside if demand exceeds quantity ordered.
Beyond Budget
The average operating cost is greater than the operating cost of the average demand.
