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Risk Simulation and How to Quantify Risk
Risk Simulation and How to Quantify Risk

How to use Monte Carlo simulations to accurately quantify schedule risk

Updated over a week ago

What is Risk Simulation?

Risk simulation plays a crucial role in gaining a comprehensive view of potential project challenges and identifying areas where we can minimize the risk of project failure. By simulating risks, we can clearly visualize areas of concern and strategize how to mitigate them, ensuring the project stays on track.

Importance of Risk Simulation

Risk Simulation is crucial because it gives a clear picture of possible project issues and helps find ways to reduce them and meet deadlines. It lets you analyze predicted duration across a sweep range of your choice. It also shows you the predicted labour hours and equipment hours data. Without Risk Simulation, you could be making important decisions in the dark.

Think of it like having a radar in dense fog – without it, your vision isn't clear. Risk Simulation identifies potential roadblocks and enables you to navigate your project smoothly through uncertainty.

How to Use Risk Simulation in Planera:

Step 1: Choose the activities you want in the simulation; initially, all activities are selected by default, but you can customize the selection by editing it.

Step 2: Select the simulation parameters like duration range and correlation.

Step 3: By default the simulation will run till the end of the project but you can modify the end target to a particular Milestone or Activity.

Step 4: You can add up to 2 additional Simulation Groups if you'd like. This lets you set different parameters for different activity selections, all in the same simulation.

Once an additional sim group has been added, you have the option of deleting any one of the sim groups.

Step 5: You can analyze the simulation results in three ways: Duration, Labor Hours and Equipment Hours.

Key confidence levels are marked, making it easy for you to take critical decisions.

By leveraging Planera's risk simulation, you'll be equipped with the tools to make strategic decisions, enhance visibility, and proactively reduce overall project timelines.

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