ABSTRACT
The application of Monte Carlo simulation methods to analyzing project schedule risk is the subject of this chapter. The chapter examines schedules with the simplest of the logical relationships to concentrate on the methods and issues of determining the risk in schedule paths based on risk represented by probability distributions of activity durations. There are two key steps to this analysis: By computing the probability distribution of the completion date for this simple four-activity one-path project we can answer some questions that critical path method (CPM) scheduling cannot answer: First the chapter determines the risk of each individual activity. It assumes that the data collected represent the risks realistically. The chapter shows an effective and available approach to deriving the most likely, conservative and optimistic duration of the project given the risks embodied in the three-point estimates of duration.
