Schedule Risk Analysis Simplified
The critical path method (CPM) is widely used by project managers but has several shortcomings: project duration is only accurate in the rare instance that everything goes according to plan; CPM-calculated completion dates tend to be overoptimistic; and the path which is identified as the critical one may in fact not be the one most likely to cause project delay. This article presents a three-step risk analysis process that complements CPM and corrects its weaknesses. The first step is the creation of a CPM schedule. The second (and trickiest) step is the determination of activity ranges, taking into account all conceivable uncertainties and risk drivers. The final step is to run a Monte Carlo simulation of the project schedule. Three different case studies are provided to show how the method works with varied scenarios.