Study on risk scenarios of project failure based on Monte-Carlo simulation

Project failure is a common outcome in complex large-scale project system because of the extensive risks. In this paper, risk scenario, which is one of the fundamental parts in risk analysis, is proved useful to estimate project failure risk. Based on the scenario theory in product system, this paper provided a methodology for identification of project risk scenario in project system. An approach based on Monte-Carlo simulation is used to generate scenarios and their frequencies. Besides, the importance measure for project risk scenarios was defined at a normalized way in the simulation environment. At last, a computational study was given to illustrate the approach, in which schedule and cost risks were taken into consideration.