Risk Models for Project Managers: Monte Carlo and Beyond

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Projects move businesses and society forward as by delivering the services, products, and outcomes needed to achieve objectives. As investments they require detailed consideration to ensure we're investing our time, money, and attention wisely. Project risk management offers logical and numerical methods to analyze important project decisions.

The heart of modern project risk management focuses on the development of quantitative probabilistic models of cost, schedule, and other project risks. These quantitative models build on the qualitative risk register to create management forecasts which can be manipulated and optimized to develop risk management plans:

Modern quantitative risk models leverage probabilistic thinking about uncertainties and consequences to support formal analysis. These detailed models of the highest priority risks support optimizing strategies. Thus, they provide a quantitative approach to decision-making in the face of uncertainties, while leading to realistic targets for achievable cost, schedule, and scope.

• Numerical models including Monte Carlo simulation, linear and non-linear approximations, and other practical computer methods allow these quantitative risk models to be translated into practicable solutions. Reliability and other systems risk modeling tools may also be used for quantitative risk analysis.

These tools provide powerful insights into evaluating a project at each stage of its lifecycle to see which courses of action work best for stakeholders. Simulating budget and schedule risk across scenarios provides a decision space for project managers and sponsors. Projects can then be appreciated as an investment of time, money, and resources to achieve the organizations goals.

What you will learn

● How to quantify and assess projects for budget, schedule, and return on investment

● Project budget and scheduling fundamentals

● How to develop a project budget estimate

● How to model impacts on the project budget

● How to develop and model project schedules

● How to simulate using Monte Carlo methods the potential impacts of project risk on budgets and schedule

● Estimating the impacts of uncertainty

● Leverage insights to select strategies and invest in projects

Skills you learn

• Quantitative Modeling
• Numerical Analysis
• Management
• Risk Management
• Investments
• Probabilistic Risk Assessments
• Reliability
• Monte Carlo Methods
• Forecasting
• Decision Making
• Risk Register
• Risk Modeling
• Project Risk Management

Syllabus

Week 1: Budget Risk

Week 2: Schedule Risk

Week 3: Monte Carlo Calculations

Week 4: Monte Carlo Modeling

Week 5: Projects as Investments

Auto Summary

"Risk Models for Project Managers: Monte Carlo and Beyond" focuses on advanced risk management tools within the business and management domain. Taught by edX, this 33-hour course offers valuable insights for project managers to evaluate projects at various stages, using simulations to optimize decision-making and stakeholder value. Available through Professional and Starter subscriptions, this awareness-level course is ideal for project managers seeking to enhance their risk assessment skills.