Quantitative Risk Analysis: Individual Project Build vs. Buy Decision
As the manager of a new website project for your company, you need to decide whether to create a new web application in-house or send the project out to a developer.
The developer has quoted a project cost of $175,000. Based on previous work with this developer, you are 85 percent certain they will finish the work on time.
Your in-house development team has quoted a project cost of $165,000. Based on previous work with the in-house team, you are 75 percent certain they will complete the work on time.
Create a decision tree illustrating the cost and probability of each option and then identify the best decision for the project. A labeled diagram must be created in Excel.