In many projects we have seen to date, the one technique commonly used to evaluate risk is Monte Carlo analysis. Monte Carlo analysis is a handy statistical method which we have covered in many articles over the past week.

In performing Monte Carlo risk simulations there are several requirements to be considered. For a description of these requirements, refer to this article.

It can be a confusing technique to understand and indeed there are many other techniques available to a project manager. However it is the Monte Carlo technique that removes the subjectivity of risk analysis, allowing a project to be simulated thousands of times over.

It’s formula can be quite complex and for this reason,we have provided a small paper introducing the analytical method.

Download: Qualitative Methods of Risk Analysis