Monte Carlo schedule risk analysis

Monte Carlo schedule risk analysis is a simulation technique that runs a project schedule thousands of times, each time sampling activity durations from realistic ranges (such as optimistic, most likely and pessimistic values) instead of single fixed numbers. The output is a probability distribution of finish dates — for example, 'there is an 80% chance of finishing by March 15' (a P80 date) — rather than the single, usually optimistic date a deterministic CPM schedule produces. The analysis also identifies which activities most often drive the finish date across iterations, focusing risk mitigation where it matters. Contractors and owners use Monte Carlo results to set realistic completion commitments, size schedule contingency, and negotiate milestones with confidence levels attached instead of gut feel.

Related term: CPM (critical path method) scheduling