You can then use Monte Carlo to analyze all the potential combinations and give you probabilities of when the project will complete. Using this, you develop a best-case scenario (optimistic) and worst-case scenario (pessimistic) duration for each task. You have a rough estimate of the duration of each project task. This mathematical technique was developed in 1940 by an atomic nuclear scientist named Stanislaw Ulam and is used to analyze the impact of risks on your project - in other words, if this risk occurs, how will it affect the schedule or the cost of the project? Monte Carlo gives you a range of possible outcomes and probabilities to allow you to consider the likelihood of different scenarios.įor example, let’s say you don’t know how long your project will take. Monte Carlo Analysis is a risk management technique used to conduct a quantitative analysis of risks.
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