Monte Carlo and Sensitivity Analysis

1000s

Simulations

Monte Carlo runs thousands of trials to estimate outcomes

P80

Confidence

Common target for schedule and cost commitments

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Tornado

Sensitivity diagram shows which variables matter most

1000s of simulated runs · pick your confidence level

Schedule Distribution

how to read this

› Monte Carlo runs thousands of project simulations with randomized estimates. Each bar = how many runs landed on that duration.
› P50 = half the runs finished by 95 days. Aggressive commitment.
› P80 = 80% finished by 108 days. Realistic for public commitments.
› P90 = 90% finished by 115 days. Use for fixed-price contracts with penalties.
› The gap between P50 and P80 is your contingency reserve — 13 days in this example.

how to read this

› Bars sorted widest at top, narrowest at bottom — hence the tornado shape.
› Each bar shows how much that variable could shift the outcome (left = worse, right = better).
› Focus risk response on the top bars. They have the biggest leverage on your outcome. The bottom ones are noise.

The output is a probability distribution. You commit to a confidence level like P80, not a single deterministic date.

The widest bars at the top are the variables with the biggest impact. Focus risk response there.

If the plan is at P50, you need contingency to reach P80. Higher confidence = more reserve.

Commit to a P level

P50 is the median. P80 gives more confidence but costs more contingency.

No single-point commitments

Single-number commitments hide uncertainty. Use probability distributions for real risk.

Run the Numbers

You simulate 1,000 possible drives with different traffic and weather. Most take 2 hours, some 3, a few 4.

Pick a Confidence Level

P50 says 2 hours is enough half the time. P80 says leave 2.5 hours to be safe. Pick based on how much you hate being late.

Tornado Chart

You identify that rush hour has the biggest impact. Rain is second. Focus your mitigation there.

Simulate, pick a P, focus on the tornado top.

reading is not enough, you gotta practice

1,800 practice questions written by certified professionals.