Time and cost contingency management using Monte Carlo simulation

In the practice of project management, cost contingency is a widely used application to counteract adverse uncertainty and risk which result in cost increase. Cost contingency is an important component in the end to end life cycle of a project. Time should also hold an equal importance as cost. In this paper, the Monte Carlo simulation approach is recommended as part of a proposed methodology for both time and cost contingency management. Individual components are assigned a time and cost contingency budget in both days and dollars, which have some grade of uncertainty regarding their completion time and future costs.