Schedule and cost buffer sizing

Bias in project performance causes schedule and cost to overrun baseline estimates (your model). Bias is the one-sided tendency of actual schedule or cost to overrun the model. A Guide to the Project Management Body of Knowledge (PMBOK’ Guide) and supporting literature recommend estimating the variability for all project time and cost estimates and sizing appropriate schedule or cost buffers (also known as contingency or management reserve) using Monte-Carol analysis or PERT. This paper describes a number of sources of bias in performance of projects to schedule and cost estimates and provides recommendations to size buffers that ensure your projects come in under your baseline schedule and budget.