Integrated Cost and Schedule Risk Analysis (IRA). Why? 5 visuals explain it!

Share This Post

Share on facebook
Share on linkedin
Share on twitter
Share on email


In Oil & Gas industry projects are always complex whether onshore or offshore. Remote locations, site access, communities, resources constraints and long lead items (LLI), etc. can be challenging to execute the project. Performed schedule and cost risk analysis with uncertainty using Monte Carlo simulation for Condensate Process and Storage Facility Project

Even developing schedule model for level -I schedule is challenging and time taking. Obviously then level-II & level -III schedule model will take more time, effort. After developing model, it is a common understanding to use “index finger” to run simulations and that’s it. Although it’s required to run simulations many times to analyze the data and spread of the distribution. Adding time-dependent cost plays an important role in displaying the Schedulecost Joint confident level (JCL). 

It is more challenging when schedule using different calendars and assign weather probabilistic calendar to one specific activity. Developing a schedule and cost stochastic model for a risk analysis using Monte Carlo simulation requires time to work with key stakeholders including planners. Activity links also play a vital role in output.

visit for more details


Oil & Gas, Condensate, Processing Facility, Schedule, Cost, Level -1 Schedule, JCL, Risk, Risk Register, Quantitative, Qualitative, Quantitative Schedule Risk Analysis (QSRA), Quantitative Cost Risk Analysis (QCRA), Integrated Cost & Schedule Risk Analysis (IRA), Probability distribution, Cumulative probability Distribution, Monte Carlo Simulation (MCS) , Iteration, Uncertainty, Data, Data Analysis, data gathering, Calendar, Construction, Engineering, procurement, FEED, Resources, Resource Risk, 

Project Schedule for Condensate Storage Facility

Schedule risk analysis (SRA) helps to analyze the uncertainty in the project schedule using Monte Carlo Simulation. Deterministic schedule duration and finish date don’t provide enough information to answer flowing questions:

  1. What is the probability of completing the project on the target date?
  2. What if the predecessor of an activity finishes late?
  3. What is the eighty (90%) chance of finishing the project?

SCR scope is:

  1. Schedule Risk Analysis (SRA) to analyze uncertainty
  2. Correlating the activities
  3. Probabilistic Branching

Level – I schedule is required to perform cost and schedule risk analysis during feasibility or initial stage of the project. Level – I schedule is given with cost estimates below:

Level Schedule for Integrated cost and schedule risk analysis.
Pic 1 - level - I Schedule

Project Uncertainty and Risk

uncertainty to project activity can be a result of lack of information, sudden market up and down, inflation and inaccurate estimation etc. 

Following risk events has been identified after risk workshop with key stakeholders. risk management is an iterative process and new risks are identified during the complete project life cycle.  List of identified risk is:

Pic 2 - Schedule Risk
Cos risk -
Pic 3 - Cost Risk

Quantitative & Schedule Risk Analysis

Cost and schedule risk analysis is performed using Monet Carlo simulation. cost and schedule risks are linked to activities. Activities are correlated to avoid merge biased. It is very important to re-run the simulation and visualize the result. Before running simulation perform checking:

1- Schedule activity relationship and linkage.

2- Check for any soft and hard constraint. 

3- validate cost estimate.

4- Resource allocation, resource over allocation and resource leveling.

5- Project calendar(s) and linking of calendar to project activities.

6- It is recommended to perform DCMA 14 points analysis to validate the schedule.

Results are:

Probability Density Chart -
Pic 4 - Quantitative Schedule Risk Analysis Results
S curve -
Pic 5 - Quantitative Cost Schedule Risk Analysis Results

Joint Confidence Level (JCL) is an integrated uncertainty analysis of   joint cost, schedule, uncertainty and risk. It helps to visualize schedule and cost results to make decision under uncertainty. 

Joint Confidence level for cost and schedule -


Integrated Cost and Schedule Risk (IRA) is performed to analyze the complete project scenario as a whole with associated uncertainty and risk. It also helps to validate the project estimates and budget. It also useful to calculate contingency reserves to manage risks.

Thank You


More To Explore

Leave a Reply

Your email address will not be published. Required fields are marked *