Schedule and Cost Risk Analysis Template (Monte Carlo)

Schedule and Cost Risk Analysis: [Project name]

Schedule and cost risk analysis: a quantitative analysis that runs a Monte Carlo simulation on the project's critical path schedule, with uncertainty ranges on durations and costs and with discrete risk events as drivers, to find how likely the project is to meet its dates and budget. It reports the finish date and cost at chosen confidence levels (P50, P80), the probability of meeting the target, criticality and sensitivity of activities and risks, and the schedule and cost contingency needed. The approach follows the concept of integrated cost and schedule risk analysis described in AACE International Recommended Practice 57R-09 and best practice 8 of the public GAO Schedule Assessment Guide (GAO-16-89G). Replace every [bracketed] value and every row marked Example.

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Revision history

Contents

1. Purpose and decision
2. Scope and inputs
3. Schedule health check
4. Risk drivers
5. Duration and cost uncertainty
6. Model and simulation settings
7. Schedule results
8. Cost results
9. Criticality and sensitivity
10. Risk prioritisation and what-if runs
11. Contingency and recommendations
12. Assumptions, limitations and quality checks
13. Glossary and references

1. Purpose and decision

2. Scope and inputs

The example uses a summary network to keep the template readable. In practice, run the analysis on the full integrated schedule or on a summary network that keeps all the logic that drives the finish date, and say which you used.

3. Schedule health check

Use project/project-schedule for the schedule itself and project/work-breakdown-structure for the scope check.

4. Risk drivers

Screened out (Example): 21 risks with expected schedule impact below 2 working days or already covered by the duration ranges in section 5. Record each screened-out risk and the reason in the register.

5. Duration and cost uncertainty

Durations are in working days. The deterministic plan uses the most likely values: A (35), then the longer of B plus D (75) and C (60), then E (30) and F (10), giving 150 working days. The B and D path is critical; the C path has 15 days of float.

Base estimate (Example): 150 days times 6 plus 400 plus 150 equals EUR 1,450 thousand. Linking cost to duration is what makes the analysis integrated: a late project costs more because time-dependent costs keep running.

6. Model and simulation settings

The merge at activity E matters: when two paths join, the start of the next activity is set by whichever path is later in that iteration, so the expected start is later than either path's own most likely date. This merge bias is one reason why deterministic dates are rarely met.

7. Schedule results

Example reading: the plan of 150 days has about a 4% chance of being met. The contract milestone at day 175 has about a 65% chance. To reach 80% confidence the team needs 182 working days, 32 more than the deterministic plan and 7 more than the contract milestone allows.

8. Cost results

Example reading: most of the cost spread comes from duration, because every working day of delay adds EUR 6 thousand. The 32 days of schedule growth to P80 alone explain about 192 of the 230 contingency, although P80 cost and P80 duration do not come from the same iterations and do not add exactly. Escalation and currency effects are excluded and are covered in the estimate (project/solution-estimate).

9. Criticality and sensitivity

Example reading: the two risk drivers rank first and third. The software build (C) is almost never critical: its 15 days of float absorb its range, so effort to speed it up would not move the finish date. The hardware path (B then D) is critical in 97.4% of iterations.

10. Risk prioritisation and what-if runs

Re-run the model with each agreed mitigation to show the residual position before the contingency decision in section 11.

11. Contingency and recommendations

Feed the approved contingency into the project management plan (project/project-management-plan), the business case (business/business-case) and the baseline. Track contingency use through project/earned-value-report and project/change-control.

12. Assumptions, limitations and quality checks

Risk management principles and process: ISO 31000:2018. Register and method templates: compliance/risk-register, compliance/risk-methodology, project/raid-log. For simulation methods in a business analytics context, see mba/mba-decision-analytics-guide.

13. Glossary and references

Standard and licence note

Structure aligned with the concept of AACE International Recommended Practice 57R-09, Integrated Cost and Schedule Risk Analysis Using Risk Drivers and Monte Carlo Simulation of a CPM Model (current listing: July 2019 revision, editorial revision October 2022), with AACE RP 41R-08 and 40R-08 named for background. AACE Recommended Practices are licensed publications: this template cites their names and numbers only, is original text written for this collection, and reproduces no text, tables, figures or worked examples from them. The health check and merge bias description are based on the public US Government Accountability Office Schedule Assessment Guide (GAO-16-89G, December 2015), best practices 1 to 10, and the Cost Estimating and Assessment Guide (GAO-20-195G, March 2020). ISO 31000:2018 is cited by name only. The worked example was computed for this template with a reproducible simulation (10,000 iterations, seed 2026). Check the current editions before relying on them.

Official text: AACE International, purchase or member access: https://web.aacei.org/resources/publications/recommended-practices. ISO, purchase or licensed access: https://www.iso.org/standard/65694.html. GAO guides (free): https://www.gao.gov/products/gao-16-89g and https://www.gao.gov/products/gao-20-195g.

Template licence: MIT.