In this article we are going to discuss using Monte Carlo simulation to perform quantitative risk analysis for project management. The three primary risks to a project are schedule, financial, and technical. Two of these three risks readily lend themselves to be quantified with Monte Carlo simulation: schedule risk and financial risk. If you’re unfamiliar …
Quantitative Risk Analysis for Project Management Read More »
Determining project schedule risk through simulation can be achieved by constructing a critical path model in Excel. This might sound tedious, especially for large projects, but we will walk through the process and show that it’s pretty simple. Simulating a critical path model is worth the effort and was discussed in a previous article. We’ll …
When we try to estimate a project completion time, often the temptation is to use a best guess completion time for each task, find the critical path, and add up the times. This method lacks information about the project schedule risk, and if done honestly, often results in a finish time later than the due …
Exposing Project Schedule Risk Hidden in Best Estimates Read More »
Project critical path analysis can be performed using Monte Carlo simulation as a way to determine project completion time probabilities. In this article, we will create a network diagram in Excel and a table to perform necessary logic operations. We will assume that each task follows the PERT distribution (also called Beta-PERT). Using past experience, …