Calculating Project Schedule Risk Using Monte Carlo Simulation

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Calculating Project Schedule Risk Using Monte
Carlo Simulation

• Curt Blair, PMP

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Project Schedule RiskThe Problem

• Projected completion dates are estimates, not
  hard facts
• These estimates often only represent a median
  scenario 50 probability
• Parallel paths (concurrent development) decrease
  estimate quality
• A single completion date estimate does not
  reflect component risk factors

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Project Schedule RiskOne Solution

• Monte Carlo simulation provides a more complete
  picture of the risk
• Uses Optimistic, Pessimistic and Most likely WBS
  task durations
• Provides a range of completion dates each with an
  associated probability

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Project Schedule RiskAdvantages

• Gives stakeholders a better feel for the
  schedule risk
• Reflects contribution of individual high risk
  tasks on near-critical paths
• Allows the Project Manager to demonstrate
  relative schedule risk of alternate scenarios

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Project Schedule RiskTools

• Excel spreadsheet
• Add-ins for Microsoft Project
• _at_Risk
• Risk Example