Understanding Cost Uncertainty

Quantitative Cost Risk Analysis (QCRA) provides an evidence-based assessment of uncertainty in project cost estimates. Using probabilistic modelling and Monte Carlo simulation, it helps organisations understand potential cost outcomes, assess contingency requirements and make informed investment and delivery decisions.

Trajectory undertakes QCRA for complex infrastructure and capital projects, including standalone engagements to support business cases, gateway reviews, project approvals and investment decisions.

Why Cost Risk Analysis Matters

A cost estimate represents a forecast based on the information and assumptions available at a particular point in time. It does not, on its own, explain the uncertainty surrounding the estimate or the likelihood of achieving a particular cost outcome.

Quantitative Risk Analysis (QRA) provides a structured way to assess this uncertainty, combining identified risks and cost uncertainty within a probabilistic model.

The result is a clearer understanding of cost exposure, contingency requirements and the factors that have the greatest influence on potential outcomes.

How We Help

Trajectory's QCRA services can include:

Cost risk modelling: Combining cost uncertainty and identified risks within a probabilistic model.
Cost confidence assessment: Evaluating the probability of achieving different cost outcomes, including P50, P80 and P90.
Contingency assessment: Establishing an evidence-based basis for evaluating cost contingency requirements.
Risk and sensitivity analysis: Identifying the risks and uncertainties that contribute most significantly to cost exposure.
Independent review: Assessing an existing QRA model, its assumptions, inputs and outputs.

The scope is tailored to the project, the maturity of the estimate and the decisions the analysis needs to support.

When We Help

Organisations engage Trajectory to undertake QCRA when they need to:

Support a business case, investment decision or gateway review.
Assess cost confidence before project approval.
Establish or review contingency requirements.
Evaluate cost exposure associated with project risks.
Review an existing quantitative risk assessment.

Cost and Schedule Risk Integration

Cost and schedule uncertainty are often closely connected. Delays can increase project costs, while changes in scope, productivity and delivery strategy can affect both cost and time outcomes.

Where both dimensions need to be assessed, Trajectory can undertake Integrated Cost and Schedule Risk Analysis (iCSRA), bringing cost and schedule modelling together to provide a more complete view of project exposure.

If your primary requirement is schedule confidence, explore our Quantitative Schedule Risk Analysis (QSRA) service.

Our Approach

We begin by understanding the project, the available information and the decision to be supported. We then establish the appropriate analytical approach, develop or review the model, evaluate the results and communicate the findings in a clear, practical format.

Our focus is on making uncertainty understandable and analysis useful for decision-making.

Trajectory maintains licences for @RISK, Primavera P6, Primavera Risk Analysis (PRA), Safran Risk and Deltek Fuse, allowing us to undertake specialist risk analysis using appropriate tools without necessarily requiring clients to purchase additional software licences for the engagement.