ABSTRACT
This chapter is fundamentally about Cost and Schedule Risk Analysis, some of the principles can be read across to other impacts of Risk, Opportunity and Uncertainty. The two most widely used techniques to model Risks, Opportunities and Uncertainties are Monte Carlo Simulation and the Expected Value or Risk Factoring Technique. Most organisations will maintain records of past project performance against the agreed contractual price, schedule and performance criteria. We should resist the temptation to take the easy option and compare the outturn performance of any project with the agreed, contracted performance, which is likely to include a contingency for Risk Management. The net result of all these dynamics is that we can assume a level of positive correlation between the two. Good historical records will help us here to understand the relationship in our organisations at different stages of the life cycle.
