The seventh step of a typical Oracle | Primavera Risk (Pertmaster) Monte Carlo analysis is to use standard risk reports for proactive planning and project management. This section will focus on generating and presenting the confidence-level histogram in a concise and understandable fashion.
The risk analyst will open the histogram in one of three ways:
The left pane give the user the ability to select a task, including options such as filtering and searching.
Right-clicking on the graph will give the following options:
Right-clicking on the statistics pane will give the user additional options:
The histogram options are located in the bottom-left corner:
Add to Distribution Analyzer & Show Distribution Analyzer are located in the bottom-right corner.
The Task and Resoures tabs are located in the bottom left-corner. Most risk charts are created for the task finish date, however a resource histogram can also be generated to see the confidence level for cost or man-hours.
The finish date, start date, duration, float, cost, NPV (net present value), and IRR (internal rate of return) tabs are shown below the graph. Risk analysts can generate confidence level histograms based on any of these tabs for various reason. The finish date of a milestone or activity is the most common chart.
One of the most important areas of a risk analysis is explaining the data. This is quite a challenge as the risk analyst must understand the project plan completely, have a background in estimating or scheduling, understand statistics, create written reports well, and present a strong case verbally. If a risk analyst or project manager is unable to answer both simple and advanced questions relative to the histogram (or any) chart, then their credibility may be compromised.
The histogram chart has two y-axes. The left axis corresponds to the number of hits (orange bars). The right y-axis corresponds to the cumulative curve which highlights the confidence level or percentage value. The graph is always read to be “ON or UNDER” a budget amount or “ON OR BEFORE” a date. The cumulative curve does not highlight the chance of finishing ON a metric, it illustrates whether the simulations finish BY the metric. If the risk analyst runs 1000 simulations, then an 80 percent confidence (probability) level can be explained as the date which 800 of 1000 (80%) iterations finished on or before. When viewing the chart notice that 80% of the histogram bars will be to the left of the 80% intersection mark of the cumulative curve.
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The PRC Enterprise Risk Register is a web-based risk management software solution which allows for the tracking of risk at the project and portfolio level. Audit logs for all risk updates and changes are available at the click of a button to aid with audits, claims and the flow of information. The power of the PRC Enterprise Risk Register is in the simplicity of the user interface, which is designed to navigate easily at both project and portfolio levels without compromising functionality or data. The PRC Enterprise Risk Register allows for mapping across project levels so the data can be reported at the portfolio level, even if the work, risk and organizational breakdown structures are not standardized.
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The PRC Enterprise Cost Risk Analysis is a customizable web-based solution for simulating estimate cost and determining cost contingency, cost drivers, and risk hotspots. The key to a good risk analysis is good inputs. The software cannot be a roadblock to success. Good risk software should be easy on the end user. Monte Carlo simulation is already a complex. The software should simplify the process.
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The PRC Enterprise Schedule Risk Analysis is a customizable web-based solution for simulating schedule duration and dates. At PRC Software, we believe that the key to good risk software is through good inputs and excellent user friendliness. A Monte Carlo simulation is already a complex. The software should not be complicated as well.
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PRC specializes in risk analysis, audit, and training. We have cross-industry experience in fields such as Aerospace & Defense, Oil & Gas, and Engineering & Construction. We believe that over-complicating the risk process often leads to wasted effort and poor results. Our goal is to "make it simple."
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