Calculating Expected Costs

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Fer23
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Calculating Expected Costs

Post by Fer23 » Thu Jan 05, 2017 11:23 am

How do you calculate an expected value for the cost of a project?
Project risk management, decision and risk analysis

Intaver Support
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Re: Calculating Expected Costs

Post by Intaver Support » Thu Jan 05, 2017 11:27 am

Expected values are calculated automatically as part of the Monte Carlo simulation and can be derived as cumulative probability or percentile. In the example below, the project has an expected value (EV) of $17,152,674.94 at the p80. In layman’s terms this means that the cost of the project will be at or below this cost 8 out of 10 times.

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