The term Quantitative Risk Analysis is used, at least in the project management context, to distinguish the quantitative analysis of uncertainty from qualitative risk analysis. The latter seeks to identify potential risks to a project and create plans to mitigate those risks.
Quantitative Risk Analysis by contrast is about estimating the effect of uncertainty in the various estimates used in creating a project schedule.
In the project scheduling context, Quantitative Risk Analysis generally means using Monte Carlo Simulation based upon a project network. Recognizing that the single-point estimates of duration in a typical project network are subject to uncertainty, it replaces these with probability distributions specified by the user in the form of 2- or 3-point estimates.
The user thereby estimates a range of possible values for each duration, and optionally a most-likely value. Monte Carlo Simulation proceeds by sampling from these distributions multiple times, calculating the outputs based on each set of samples, and accumulating histograms and other statistics representing the distributions of the outputs. Each set of samples and the accompanying calculations is called a trial, or sometimes an iteration.
Full Monte performs Quantitative Risk Analysis within Microsoft Project, using your existing project schedule. Full Monte is fast, enabling you to do more trials than would be practical with other systems.
The results are presented in the form of histograms and s-curves for the cost, early and late dates, and floats for every task in the network. If you would like to learn more, please call us at 281-971-9825.