Measuring the Impact of Risk Events and Uncertainty in Activity Durations on Project Schedule

Abstract

Construction projects are usually over budget and beyond their planned schedule. One possible reason for these situations is that proper risk management techniques are not applied during the planning and execution of projects. This paper introduces a method which uses the impacts of risk in project scheduling. A simple infrastructure project is considered for analysis. Uncertainty in activity durations is assigned using various statistical distributions. Further, certain risk events are added to the project using risk register. The impact of these uncertainties in activity durations and risk events are modeled and simulated in @Risk software. The software uses Monte Carlo simulations for risk analysis. The results show that the model can predict the impact of uncertainty in activity durations on the pro-ject completion time. The additional days added to the planned schedule because of occurrence of risk events can also be predicted with confidence. The results provide confirmation that risks associated with project schedules can be managed if properly accounted for