Monte Carlo Analysis

The project management term Monte carol analysis, despite the images that are conjured on first glance by the term, in reality has nothing to with an elaborate strategy aimed at maximizing one’s winnings when it comes to their time playing for dollars in the casino. Instead, when used in terms of project management, Monte carol analysis refers specifically to a technique in which the project team leader or project team computes and/or quantifies the complete and total project cost and/or project schedule a number of times through the use of input values that have been selected at random through the careful utilization of probability distributions or potential costs and/or potential durations. The purpose of utilization of the Monte Carlo analysis is for the sake of calculating a defined distribution scenario of possible total costs associated with the project as well as a range or possible completion dates of the project.

This term is defined in the 3rd and the 4th edition of the PMBOK.