Project Risk Management: Essential Methods for Project Teams and Decision Makers

PART THREE

Probabilistic Monte Carlo Methods

EVEN STANDARD PROBABILISTIC METHODS for assessing project cost and schedule reserves are relatively sophisticated. Aside from their recognized power and value they entail several unwritten but fundamental rules to follow to stay adequate and avoid getting confusing results. The purpose of Part III is to summarize all the relevant rules for developing adequate probabilistic cost and schedule models. This includes discussion of the data specifications that should be used as inputs and outputs of probabilistic analyses.