A primary purpose of running a schedule risk simulation is to enable the project management team (PMT) to make more informed decisions based on the project schedule forecast end date (and cost if applicable) probability distribution (as well as forecast dates for other activities & milestones in the schedule, as required).
The question I want to raise for discussion is: Assuming the simulation is based on a realistic model, what probability level should the PMT use for realistic planning and decision making?
An immediate response is likely to be: The probability chosen depends on the purpose to which the PMT wishes to apply the answer.
For example, if the purpose is setting a target date for completion of the project that is attainable but requires a concerted effort by everybody in the project team, perhaps a probability of 50-60% is appropriate.
But if the purpose is to secure project approval and funding, including a management reserve allocation to cover the possibility of things going wrong, a probability of 90-95% may be more appropriate.
What do you think? Does your organisation have policies on this?
The question I want to raise for discussion is: Assuming the simulation is based on a realistic model, what probability level should the PMT use for realistic planning and decision making?
An immediate response is likely to be: The probability chosen depends on the purpose to which the PMT wishes to apply the answer.
For example, if the purpose is setting a target date for completion of the project that is attainable but requires a concerted effort by everybody in the project team, perhaps a probability of 50-60% is appropriate.
But if the purpose is to secure project approval and funding, including a management reserve allocation to cover the possibility of things going wrong, a probability of 90-95% may be more appropriate.
What do you think? Does your organisation have policies on this?