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PGMP · Question #250

You are the program manager for your organization and you are trying to determine the possible outcomes of a risk event. You're analyzing the risk event's worst case scenario, most likely scenario…

The correct answer is C. Monte Carlo simulation. Using worst-case, most-likely, and optimistic scenario inputs to simulate the range of possible outcomes for cost, time, and scope is the Monte Carlo simulation technique.

Program Risk Management

Question

You are the program manager for your organization and you are trying to determine the possible outcomes of a risk event. You're analyzing the risk event's worst case scenario, most likely scenario, and optimistic scenario to simulate the possible affects of the risk on the program's cost, time, and scope ramifications. What simulation technique are you using in this situation?

Options

  • ADecision tree analysis
  • BForce field analysis
  • CMonte Carlo simulation
  • DSensitivity analysis

How the community answered

(40 responses)
  • A
    5% (2)
  • B
    13% (5)
  • C
    80% (32)
  • D
    3% (1)

Why each option

Using worst-case, most-likely, and optimistic scenario inputs to simulate the range of possible outcomes for cost, time, and scope is the Monte Carlo simulation technique.

ADecision tree analysis

Decision tree analysis evaluates discrete branching decision points and their associated probabilities and payoffs, not continuous simulation across a range of scenario inputs.

BForce field analysis

Force field analysis is a change management and decision-making tool that identifies and weighs driving versus restraining forces - it is not a quantitative risk simulation technique.

CMonte Carlo simulationCorrect

Monte Carlo simulation uses three-point estimates (pessimistic, most likely, and optimistic) as inputs to run thousands of randomized iterations, generating a probability distribution of possible project outcomes. This produces confidence-level estimates and cumulative probability curves for cost and schedule, directly modeling how risk events could impact the program across all three scenario types described.

DSensitivity analysis

Sensitivity analysis determines which individual risk variables have the greatest impact on project objectives by varying one factor at a time, rather than simulating combined probabilistic scenarios.

Concept tested: Monte Carlo simulation for quantitative risk analysis

Source: https://www.pmi.org/pmbok-guide-standards/foundational/pmbok

Topics

#Risk Management#Quantitative Risk Analysis#Monte Carlo Simulation#Program Risk

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