1. Calculating Project Schedule Risk Using Monte Carlo Simulation Curt Blair, PMP

2. Project Schedule Risk The Problem Projected completion dates are estimates, not “hard” facts Projected completion dates are estimates, not “hard” facts These estimates often only represent a median scenario – 50% probability These estimates often only represent a median scenario – 50% probability Parallel paths (concurrent development) decrease estimate quality Parallel paths (concurrent development) decrease estimate quality A single completion date estimate does not reflect component risk factors A single completion date estimate does not reflect component risk factors

3. Project Schedule Risk One Solution Monte Carlo simulation provides a more complete picture of the risk Monte Carlo simulation provides a more complete picture of the risk Uses Optimistic, Pessimistic and Most likely WBS task durations Uses Optimistic, Pessimistic and Most likely WBS task durations Provides a range of completion dates each with an associated probability Provides a range of completion dates each with an associated probability

4. Project Schedule Risk Advantages Gives stakeholders a better “feel” for the schedule risk Gives stakeholders a better “feel” for the schedule risk Reflects contribution of individual high risk tasks on near-critical paths Reflects contribution of individual high risk tasks on near-critical paths Allows the Project Manager to demonstrate relative schedule risk of alternate scenarios Allows the Project Manager to demonstrate relative schedule risk of alternate scenarios

5. Project Schedule Risk Tools Excel spreadsheet Excel spreadsheet Add-ins for Microsoft Project Add-ins for Microsoft Project – @Risk – Risk+ Example Example