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Schedule and Cost Risk Analysis Template (Monte Carlo)

Monte Carlo schedule and cost risk: health check, risk drivers, three-point ranges, model, P50/P80 results, criticality, sensitivity, risk removal, contingency

Управління проєктамиПовнийAACE RP 57R-09 (concept); GAO-16-89G best practice 8scheduleriskanalysis

Як використовувати: Use it before committing a date or budget on a project with material uncertainty. Fill the decision and confidence policy, the schedule health check and the risk drivers first. The main pitfall is simulating a broken schedule network or counting the same uncertainty twice.

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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.

Document control

FieldValue
Document ID[SRA-PROJECT-001]
Project name and code[Project name], [PRJ-NNNN]
Version[1.0]
Status[Draft / In review / Issued / Superseded]
Analyst[Name, role]
Owner[Project manager]
Reviewers[Planner, cost estimator, risk manager, independent reviewer]
Schedule analysed[File name, version, data date YYYY-MM-DD]
Cost estimate analysed[Estimate ID, version, base date]
Risk register version[ID, version, date]
Simulation tool and settings[Tool, version, iterations, seed, sampling method]
Decision supported[Funding approval / Baseline / Gate review / Contract bid]
Last updatedYYYY-MM-DD
Classification[Internal / Confidential]

Approvals

RoleNameDecisionDate
Project manager[Name][Accepted]YYYY-MM-DD
Independent reviewer[Name][Review findings closed]YYYY-MM-DD
Sponsor[Name][Contingency approved at P80 / other level]YYYY-MM-DD

Revision history

VersionDateAuthorChange
0.1 (Example)YYYY-MM-DD[Analyst]First run on baseline schedule v2.0
1.0 (Example)YYYY-MM-DD[Analyst]Ranges revised after risk workshop, issued for funding decision
1.1 (Example)YYYY-MM-DD[Analyst]Re-run after R1 mitigation agreed

Contents

1. Purpose and decision

ItemValue (Example)
DecisionApprove the project budget and the go-live date to be announced to shipping lines
Target dateGo-live at working day 175 from the data date (contract milestone with the port authority)
Target budgetEUR 1,450 thousand (deterministic estimate)
Confidence policyBudget and announced dates set at P80; internal targets at P50
Questions to answerHow likely is day 175? What contingency gives 80% confidence? Which risks matter most?

2. Scope and inputs

InputVersion and source (Example)Owner
ScheduleSummary network of 6 activities derived from the integrated schedule v2.0 (412 activities), data date YYYY-MM-DDPlanner
Cost estimateBase estimate v1.3: time-dependent costs EUR 6 thousand per working day, fixed costs EUR 550 thousandCost estimator
Risk registerRAID log v14, 23 open risks, 2 retained as drivers after screeningRisk manager
Range dataRisk workshop on YYYY-MM-DD with 9 participants, plus history from two earlier gate projectsAnalyst
Calendar5-day working week, [holiday list]Planner

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

GAO best practiceCheckResult (Example)
1 Capturing all activitiesAll scope in the WBS appears in the schedulePass
2 Sequencing all activitiesNo open ends except start and finish; few lags and leadsPass after 4 open ends fixed
3 Assigning resourcesKey resources loaded on critical activitiesPass
4 Establishing durationsDurations based on estimates, not targetsPass
5 Horizontal and vertical traceabilityDelays flow through logic to the finishPass after 2 hard constraints removed
6 Valid critical pathContinuous path from data date to finishPass
7 Reasonable total floatNo unexplained float above [44] working daysPass
8 Schedule risk analysisThis documentn/a
9 Updated with actual progressData date status completePass
10 Baseline maintainedBaseline v2.0 savedPass

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

4. Risk drivers

IDRisk driverProbabilityImpact if it occursActivities affectedRegister ref
R1 (Example)Customs hold on imported barrier and camera hardware30%Adds 10, 15, 25 working days (min, most likely, max) and EUR 40 thousand of storage and expeditingB Hardware procurementRSK-007
R2 (Example)Integration defects between the gate system and the terminal operating system40%Adds 5, 10, 20 working daysE Integration testingRSK-012
[Rn][Driver][%][Range][Activities][Ref]

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

IDActivityPredecessorsMinMost likelyMaxDistribution
A (Example)Detailed designnone303545Triangular
B (Example)Hardware procurementA405070Triangular
C (Example)Gate software buildA506080Triangular
D (Example)Lane installationB202535Triangular
E (Example)Integration testingC, D253045Triangular
F (Example)Go-live and handoverE81015Triangular

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.

Cost elementBasisMinMost likelyMaxDistribution
Time-dependent team and site costs (Example)EUR 6 thousand per working day of project durationFollows simulated durationDerived
Gate hardware (Example)Supplier quotes380400460Triangular
Software licences (Example)Fixed price contract150150150Fixed
R1 storage and expediting (Example)Only when R1 occurs404040Fixed, conditional

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

SettingValue (Example)
Iterations10,000
Random seed2026
SamplingSimple random sampling
Risk driver occurrenceIndependent draws per iteration
Correlation between activity rangesNone modelled in the example (see section 12)
Merge pointE starts after the later of D and C
Outputs recordedFinish date, total cost, critical path per iteration, input samples
Tool[Tool name and version, or script reference]

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

ResultWorking days from data date (Example)
Deterministic finish150
Probability of finishing by day 1504.2%
P10154
P50170
Mean171
P80182
P90189
Probability of meeting the target (day 175)64.6%

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

ResultEUR thousands (Example)
Base estimate (deterministic)1,450
Probability of finishing within the base estimate2.8%
P101,487
P501,589
Mean1,599
P801,680
P901,730
Contingency to reach P801,680 - 1,450 = 230

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

Activity or driverCriticality index (Example)Correlation with finish (Example)
R1 Customs holdn/a0.59
B Hardware procurement97.4%0.47
R2 Integration defectsn/a0.46
E Integration testing100%0.32
A Detailed design100%0.23
D Lane installation97.4%0.23
F Go-live and handover100%0.10
C Gate software build2.6%0.01

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

Run (Example, same seed)P50 daysP80 daysP80 gainP80 costP80 cost gain
All risks1701821,680
R1 removed1651757 days1,61466
R2 removed1651766 days1,64931
R1 and R2 removed (uncertainty only)16116913 days1,577103
Mitigation (Example)RiskCostExpected effectDecision
Pre-clearance with customs broker and bonded storage bookingR115Probability from 30% to about 10%Recommend: costs 15, worth up to 66 at P80 if R1 is removed
Early interface test harness from the terminal operating system vendorR225Impact range halvedRecommend if vendor confirms delivery by day 40
[Mitigation][Risk][Cost][Effect][Decision]

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

11. Contingency and recommendations

Recommendation (Example)Basis
Commit externally to day 182 (P80), not day 17564.6% chance of day 175 is below the P80 policy
Or keep day 175 and fund both mitigations in section 10Removing R1 alone gives P80 of 175
Hold schedule contingency of 32 working days as a visible buffer before go-live, owned by the project managerP80 minus deterministic finish
Hold cost contingency of EUR 230 thousand (P80 minus base), released as risks retireSection 8
Re-run the analysis at hardware delivery and before integration testingLargest drivers retire at those points

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

ItemStatement (Example)
Summary networkSix activities stand in for 412; the critical logic was preserved and tested against the full schedule
No correlationActivity ranges sampled independently; real ranges that share causes would widen the result, so P80 may be optimistic
Triangular rangesChosen for transparency; tails beyond the stated maximum are not modelled
Risk drivers independentR1 and R2 have no common cause
ExcludedScope change, force majeure, escalation and currency
Expert biasRanges came from a facilitated workshop with prompts against anchoring on the plan
Quality checkResult (Example)
Deterministic run of the model equals the schedule's finish (150)Pass
Results stable when the seed changes (P80 within 1 day)[Pass / Fail]
Every driver traceable to a risk register entryPass
No duplicated uncertainty between ranges and driversPass after workshop review
Independent reviewer has rebuilt one result[Pass]

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

TermMeaning
Monte Carlo simulationRepeated calculation of the schedule and cost with inputs drawn at random from their ranges
IterationOne calculation of the model with one set of sampled inputs
P50, P80Value not exceeded in 50% or 80% of iterations
Risk driverDiscrete uncertain event with a probability and an impact range on named activities
Criticality indexShare of iterations in which an activity was on the critical path
Merge biasDelay added when parallel paths join, because the later path sets the start of the next activity
ContingencyTime or money held for identified risks, sized from the analysis
Management reserveMoney held outside the project baseline for unidentified risks
ReferenceTitleUse
AACE RP 57R-09Integrated Cost and Schedule Risk Analysis Using Risk Drivers and Monte Carlo Simulation of a CPM Model (AACE International)Method concept (cited only)
AACE RP 41R-08Understanding Estimate RangingBackground on ranges (cited only)
AACE RP 40R-08Contingency Estimating, General PrinciplesContingency concept (cited only)
GAO-16-89GGAO Schedule Assessment Guide: Best Practices for Project Schedules, December 2015Health check and best practice 8 (US government publication)
GAO-20-195GGAO Cost Estimating and Assessment Guide, March 2020Cost risk and uncertainty background
ISO 31000:2018Risk management, guidelinesRisk principles (cited only)
[Doc ID]Integrated schedule (project/project-schedule)Model input

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.

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