These methods are useful in assessing the overall risk of the project and the need for such things as contingency funds, and time. Here the focus is not on individual events but on the likelihood the project will be completed on time and within budget. PERT and related techniques take a more macro perspective by looking at overall cost and schedule risks. PERT (program evaluation and review technique) and PERT Simulation can be used to review activity and project risk.Correlations between past projects’ cash flow and S-curves (cumulative project cost curve-baseline- over the life or the project) have been used to assess cash flow risks.Statistical variations of net present value (NPV) have been used to assess cash now risks in projects.Decision trees have been used to assess alternative courses or action using expected values.Although there are many statistical techniques available to the project manager that can assist in assessing project risk, probability analysis is one of the more common ones. Probability analysis is one of the techniques that can be used in the Risk Assessment process.
