Integrated Cost & Schedule Risk Analysis

What is Integrated Cost & Schedule Risk Analysis?

Integrated Cost and Schedule Risk Analysis (IRA) represents the cutting edge of Monte Carlo project risk analysis practices.

As the name suggests, it is a means of conducting quantitative risk analysis simultaneously on the schedule and the estimate, to assess accurately the cost consequences of all identified time and cost uncertainties and risk events.

The primary objective of Integrated Cost and Schedule Risk Analysis is to jointly assess the requirement for project schedule contingency and cost contingency by more accurately modeling the cost of delay depending on where and how delay affects the project schedule.

Key Benefits:

Quantitative Monte Carlo Approach
Established & Proven Methodology
Handles Range Uncertainties as well as Discrete Risk Events
Handles Complex Weather Models as well as Risk Factors such as Productivity
No Need for Assumptions Regarding Cash Burn Rates Over Time
Can Produce Time Based Probabilistic Cash Flow Curves
Produces Ranked Assessments of Cost Drivers Including Schedule Factors
Applicable to Almost any Project Type

Our Integrated Cost-Schedule Risk Analysis Methodology

Unlike stand-alone cost risk analysis techniques, Integrated Cost and Schedule Risk Analysis does not need to make broad generalisations regarding the cost of schedule delay, as costs are applied directly to the activities to which they relate. Therefore, if a task with time dependent costs (such as labour) shortens in the schedule model, the cost impact of time will decrease accordingly.

Also unlike the conventional process of feeding allowances from schedule risk analysis into cost risk analysis, the schedule drivers of cost can be quantified and ranked with the cost drivers to give the project team the best possible understanding of the ranked drivers of project cost.

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