Probabilistic Cost and Cash Flow Analysis

Lev Virine and Michael Trumper

Chapter 13 in Project Risk Analysis Made Ridiculously Simple, 2017, pp 181-191 from World Scientific Publishing Co. Pte. Ltd.

Abstract: In projects, cost and schedule are correlated: project activities have resource rates and fixed costs associated with them. When we perform project risk analysis, we can define risks and uncertainties associated with cost at the same time as we define schedule risks and uncertainties. When we perform the risk analysis, we can generate statistical distributions for all project parameters, including cost and schedule, at the same time. With both cost and schedule statistical distributions, we can now plot a joint confidence graph (for cost and schedule) that would provide insight into what the chance is that we can complete the project both on time and within budget.

Keywords: Project Management; Risk Management; Risk Analysis (search for similar items in EconPapers)
JEL-codes: D81 G32 (search for similar items in EconPapers)
Date: 2017
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