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.
- 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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