Thursday, April 26, 2012

Tornado Diagram-PMP Exam Tips

One of the more obscure terms that you need to know for the PMP Exam is the "Tornado Diagram". Basically, the tornado diagram is a typical display format of the sensitivity analysis.
Let's look at this in more detail.

A Tornado diagram, also called tornado plot or tornado chart, is a special type of Bar chart, where the data categories are listed vertically instead of the standard horizontal presentation, and the categories are ordered so that the largest bar appears at the top of the chart, the second largest appears second from the top, and so on. They are so named because the final chart appears to be one half of a tornado. This diagram is useful for sensitivity analysis - comparing the relative importance of variables. For example, if you need to visually compare 100 budgetary items, and identify the largest ten items, it would be nearly impossible to do using a standard bar graph. However, in a tornado diagram of the budget items, the top ten bars would represent the top ten largest items.

This is applicable to wide range of project domains – Financial, Constructions, Software, Sales, Services, etc. Tornado diagram can be used for analyzing sensitivity in other project constraint (cost, time, quality and risk) objectives also. The longer the bar the greater the sensitivity of the project objective to the factor. The factor that have the greatest impact is located at the top, and the bar ends indicate the low and high value of the factor. It assists the project manager in focusing on the most critical variable of the project, sort and prioritize the variable according to their impact on the project objective, realize how much the value of the project is impacted by the uncertainties of the project, and decide where you need to invest any additional efforts.

You can find the Tornado Diagram in the PMBOK Guide 4th Edition starting in section 11.4.2.2 as part of the sensitivity analysis.

Until next time,
Cornelius Fichtner, PMP

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