A simulation is an analytical mathematical tool of project management that explores the impact of variances on deliverables or outcomes during a given project. Variances constitute a wide variety of unforeseen and unexpected events that may delay or impact the timeliness of deliverables. A computer model assists project management by anticipating variables and estimating risk. The simulation usually provides the risk as an expression of probability. Simulation of variances allows compensatory movements in project management to defray costs or durations in estimated completion of deliverable. The simulation is usually conducted at the lowest tier of a project to assess the overall effect of a variable on the entire project as a whole. Project simulations can be used proactively to define common areas of great potential risk and incorporate appropriate checks and balances into the project management plan to mitigate those risks. Project simulations usually use computational analysis that is dependent upon repeated and random variables in order to obtain results. Simulations are used in project management when it is generally not feasible to rely on concrete data to generate a result.
This term is defined in the 3rd and the 4th edition of the PMBOK.