In the first half of 2019, GBA Projects has been involved in preparing project schedules and cost estimates in readiness for gate reviews for projects in the mining, oil and gas sectors. Just like any major organisation, the companies nominating these projects follow stringent guidelines requiring the production of standard deliverables.

Each of which is required as input prior to funding investment decisions (FID) by their respective boards. 

For a typical project, the following project control deliverables are typically produced:

  • Project Schedule
  • Basis of Schedule
  • Cost Estimate
  • Basis of Estimate
  • Risk Register
  • Project Controls Plan
  • Change Management Plan

Whilst this list is not exhaustive, these key items are typically produced in draft format to facilitiate risk ranging workshops to determine the overall project time and cost contingencies required for the project.

However at the end of producing these documents we always get this question:

"what is my P50 and P90"?

This question is often asked with minimal understanding of what these terminoilogies actually mean. So what do they mean and how are these numbers actually derived? Enter Monte Carlo Simulation!

An example of Monte Carlo Analysis in action can be seen here in this short clip using Primavera Risk Analysis:

 

By simulating the project 'being executed' a thousand times, we are able to determine 1,000 possible outcomes for our project, factoring into each iteration a combination of risk and duration uncertainty.

Using our example above and by sorting the outputs of each iteration from lowest to highest, we are able to ascertain our most likely outcomes. For instance our P50 is shown as 11th May 2020. This means that over the 1,000 iterations 50% of those simulations completed on or before the 11th of May.

If we wanted to give the executive team or sponsor a date with more confidence, we could select the P80 which shows a completion date of 11th June 2020.

Find out how GBA Projects can help your project perform.

Contact us.

Clients

  • 01-santos-logo.jpg
  • 02-bhp-logo-new.jpg
  • 03-hansen-logo.jpg
  • 04-sydney-water.jpg
  • 05-beach-energy.jpg
  • 05-kbr-logo.jpg
  • 06-aurecon-logo.jpg
  • 07-lendlease-logo.jpg
  • 08-riot-tinto-logo.jpg
  • 09-sa-govt-logo.jpg
  • 10-spotless-logo.jpg
  • 11-built-environs-logo.jpg
  • 12-dyno-logo.jpg
  • 13-sa-power-logo.jpg
  • 14-incitec-logo.jpg
  • 15-electranet-logo.jpg