Examining Monte Carlo Analysis for Projects

monte carlo analysis

Examining Monte Carlo Analysis for Projects


Monte Carlo Analysis is a technique used by Project Managers to make predictions about the optimistic, most likely and pessimistic estimates for variables in the model and simulate various outcomes of the project schedules to a statistical distribution of the calculated results.

monte carlo analysis

In addition to what-if-scenario analytical method, this is the other most common on simulation type. This analysis does not produce a single result but calculates a range of possible results.


In more general business terms, Monte Carlo Analysis refers to not one single analysis method but to a wide class of techniques, mostly making use of sophisticated computers and inputs of random numbers, probabilities and algorithms. 


It has a wide range of applications in many fields including finance and engineering because it works effectively with a large input of members. It is well suited for complex project management problems in which more than a few inputs such as costs, activity and duration are unknown. 


A typical example…

Stakeholders asked George Allen, a Project Manager to estimate how long it will take to produce a project involving three tasks and inexperienced team. The first task is scheduled to take 30 days; the second task is scheduled to take 60 days, and the third task is scheduled to take 90 days but with inexperienced resources, the task duration is optimistic and could take more time. 


Using a software application, George will run a Monte Carlo simulation analysis using these inputs and probability that each task will be completed early on time, and late.


After running the Monte Carlo Analysis repeatedly to generate a range of results, he estimates that this project has a 40% probability of being completed within 170 days, a 60% probability of being completed within 180 days and an 80% probability of being completed within 200 days. 




Now your take on this argument.

We would also like to hear what you feel about the topic we discussed today. Your feedback is very important to us. Feel free to drop your comments and recommendations. If you have a contrary opinion, you can drop that too.

You can also join our Facebook Page CRMNigeria for more updates. You can do that by clicking on the link or searching for our page on Facebook.

Click here to Download 5 E-Books that I have taken time to prepare for you.

These E-Books contains formulas that have helped many of my students to nail the PMP Exam. You can also make use of this E-Books. While you are using it if you have questions to ask me concerning the Formulas, feel free to shoot me a mail. I am committed to assisting you to nail your PMP exam. It’s a pledge. You can always count on me as a friend. 

PS: For like seven years since I started blogging I have tried many platforms and tools. Some worked and some of them performed below expectation. Here are some of the tools that I will gladly recommend for you any day, any time.






You can also download our Mobile App here.

Click here to Like our Page on Facebook

Follow us on Twitter

Domain names for just 88 cents!3 Major Roles of PMO in Projects 1
Action Point.
You need to confirm your subscription by clicking on the link sent to you. You can check the spam folder for it. Add us to your mailing list to receive directly from us.

PS: Click on the link below to sign up for my Online E-Course CRM Training. Make sure you confirm your subscription by clicking on the link sent to you. Thanks.


Examining Monte Carlo Analysis for Projects 1

Adeniyi Salau PMP , CCNA R&S , CDMP, CEP, MOS, MCP, CSCU (Project 2016), Microsoft Certified Security and Networking Associate is a Google and Beingcert Certified Digital Marketer, Project Manager and SEO Expert of repute with about a decade of Blogging and online marketing experience. He is always ready to share his experience with others.

Leave a Reply

Your email address will not be published. Required fields are marked *


CommentLuv badge