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Topics: Quality, Risk Management, Scheduling
MonteCarlo Simulation
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What experiences have you have with MonteCarlo Simulation in your real life projects?

Can you share current practices and experiences around this tool (no theory)
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Monte Carlo simulation is a computerized mathematical technique that allows people to account for risk in quantitative analysis and decision making. The technique is used by professionals in such widely disparate fields as finance, project management, energy, manufacturing, engineering, research and development, insurance, oil & gas, transportation, and the environment.

Retrieved from http://www.palisade.com/risk/monte_carlo_simulation.asp
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Is his mostly a theorical tool or some of you have actually used it extensively?
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Use it mainly for project financial justification to assess the sensitivity of project NPV to the various inputs (assumptions) to the DCF model, and very seldom in schedule analysis.
Also this tool is really helpful in portfolio management.
There are some plug-ins for MS Project and Excel, which make MC Simulation easy to use
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I have use in project for schedule simulation, it give a different look at task, action. I think it helped the project to stay on schedule. Pointing to sensitivity.
Also was use to evaluated combine value ( to a financial context) of project risk.
I think it can be an eye opener.
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I worked with the Monte Carlo Tools in preparing budgets for Capital Improvements Projects for a local Sanitation District to provide a potential range of project costing associated with risks, from the optimistic to the pessimistic value and for the most likely value for a project. It was an eye opener for the board members in understanding that a CIP delivery cost is not jus a number but a range of potential cost.
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I used it daily for estimating the Risk Value of projects and assessing the value of confidence that I would like to have on the program by defining a Contingency Reserve.
I also used it in Financial Business Plan to estimate the impact of of the variation of input on main financial output.
To do the Montecarlo simulation I use @Risk (Palisade software), that is an add-on of Excel.
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Comments?
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George -

Like Francesca, I used @Risk a LONG time ago on a software development project when I wanted to determine the range of possible duration outcomes. For each activity (primarily those on the CP), like Alberto, I had asked for a three point estimate and then let the simulator do its work.

The main objective was to provide additional justification as to why the delivery date expectations of a key stakeholder were unrealistic.

Kiron
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George on what kind of use you want to put it?

Have you download the demo and try it?

I keep using it ? Still find it valuable, give you a added level of confidence !

In the end it is a statistical tool
...
1 reply by George Lewis
Nov 23, 2017 11:01 AM
George Lewis
...
Vicent - I finally did, thanks for your input...
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Nov 21, 2017 7:01 PM
Replying to Vincent Guerard
...
George on what kind of use you want to put it?

Have you download the demo and try it?

I keep using it ? Still find it valuable, give you a added level of confidence !

In the end it is a statistical tool
Vicent - I finally did, thanks for your input...

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