rather than Risk Expected Value Simulation (REVS)
for Schedule Risk Analysis
FEATURED PAPER
Rasoul Abdolmohammadi, PMP, PMI-RMP
Iran
1 Abstract
Considering the variety of situations and factors that project practitioners encounter, finding a suitable method to determine schedule contingency is always a challenge for project risk analysts. Factors such as the level of available information, maturity of the scope of work, available software, and technical expertise all influence the choice of analysis method. In situations where there is a lack of manpower or a reliable detailed schedule, one method currently in use is Expected Value analysis with Monte Carlo simulation, referred to here as Risk Expected Value Simulation (REVS). This paper describes the REVS method, assesses its pros and cons, and evaluates its validity. Following this, another method is introduced: Overall Schedule Risk Simulation (OSRS), which involves running Monte Carlo simulations with schedule simulation software.
2 Introduction
It might be considered a rule in our world that nothing is certain. The question is not whether uncertainty exists, but to what extent. This rule is especially relevant in the world of projects. Estimating something like duration in a project, which is a temporary and unique event, inherently involves a high level of uncertainty. All assumptions in a project are uncertain. One key aspect that needs to be controlled in a project is its duration. Project schedulers typically report a deterministic date for every project activity, particularly the main milestones. Given the uncertain nature of these estimations, it is logical to ask the following questions:
- How confident are we in the reported dates?
- What is the likelihood of meeting the reported date?
- How much time should be considered as a contingency reserve?
Schedule risk analysis is a common approach used by project practitioners to address such questions. To conduct a reasonable and reliable risk analysis, the project risk analyst needs to find a suitable method. Several methods have been introduced for performing schedule risk analysis, one of which is Risk Expected Value Simulation (REVS).
While REVS is recommended as one of the primary methods for conducting schedule risk analysis that considers project-specific risks, it has some drawbacks. This article initially introduces the REVS method, explores its primary limitations, and subsequently introduces the Overall Schedule Risk Simulation (OSRS) method. The OSRS method mitigates some of the shortcomings of REVS and can serve as a viable alternative.
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How to cite this paper: Abdolmohammadi, R. (2024). Overall Schedule Risk Simulation (OSRS) rather than Risk Expected Value Simulation (REVS) for Schedule Risk Analysis; PM World Journal, Vol. XIII, Issue IX, September. Available online at https://pmworldlibrary.net/wp-content/uploads/2024/09/pmwj145-Sep2024-Abdolmohammadi-Overall-Schedule-Risk-Simulation.pdf
About the Author
Rasoul Abdolmohammadi
IRAN
Rasoul Abdolmohammadi is an industrial engineer with more than 20 years project management experience including risk, time and cost management. He currently works as technical principal in planning and scheduling in Petronas. His risk experience includes developing, implementing and training project risk processes for a range of international mega-projects in the oil & gas and construction industries, including quantitative risk analysis. Rasoul has published his experiences in the book “Practical Project Risk Management Process“, and he has presented on risk at international conferences.
He can be contacted at rasoulabdolmohammadi@yahoo.com
