Quantitative Risk Management Glossary

Contingency is the cost or time added to a project's base estimate or schedule to cover identified risks and estimating uncertainty within the agreed scope.

Linking risks and activities that move together so the model does not understate total risk.

A qualitative 5x5 rating grid, and why it cannot size contingency.

The probability of meeting cost and schedule targets together.

Merge bias is the extra schedule risk created when several parallel paths converge on one activity or milestone.

Running a cost or schedule model thousands of times to get a distribution of outcomes.

P10 is the value with a 10% probability that the actual outcome will be at or below it.

P50 is the value with a 50% probability that the actual outcome will be at or below it.

P80 is the value with an 80% probability that the actual outcome will be at or below it.

P90 is the value with a 90% probability that the actual outcome will be at or below it.

Comparing results before and after mitigation to value each response.

Oracle's schedule risk tool, formerly Pertmaster.

Choosing triangular, PERT, uniform or other shapes for model inputs.

Quantitative Cost Risk Analysis: Monte Carlo simulation of a cost estimate.

QSRA (Quantitative Schedule Risk Analysis) is a Monte Carlo simulation of a project schedule.

Quantitative risk assessment (QRA) measures risk in numbers rather than labels.

Quantitative risk management (QRM) is the practice of managing project and business risk with numbers.

IQRM's method for calibrating risk inputs from project data.

Linking register risks to the schedule activities they affect.

The record of identified risks, owners, probabilities and impacts.

Writing a risk as cause, event and effect so it can be quantified.

Safran Risk is project risk analysis software from Safran Software Solutions.

Time held between the plan and the committed date, sized from a QSRA.

Testing schedule logic and constraints before a risk analysis.

A three-point estimate describes an uncertain cost or duration with three values: optimistic (minimum), most likely, and pessimistic (maximum).

The chart that ranks risks by their effect on the result.

A triangular distribution is a probability distribution defined by three values: a minimum, a most likely value (the peak) and a maximum.