The estimate for a very large mining project was being developed prior to seeking approval to proceed into detailed development.
Schedule uncertainty was being analysed in-house and Broadleaf was engaged to assess the uncertainty in the estimate. Some early works had been completed and the estimate fell into five parts that were each major projects in their own right.
Using existing qualitative project risk assessments, we identified the major risk drivers in each of the separate projects and developed a summary estimate that matched the risk drivers. It grouped together costs subject to the same risk drivers and maintained a separation between those subject to different risk drivers.
The risk drivers were used to plan a series of workshops in which the uncertainty around important cost estimating parameters was assessed. We used our specialised approach to limiting bias and ensuring realistic range assessments.
The range assessments were documented and used to populate a model built in @Risk for Excel. The initial results and sensitivity analysis was examined to validate the model and some features of the model were revised.
After further reviews and updates, the model was completed and a full report prepared on the conduct and outcome of the analysis. This was used to establish a recommended contingency for the project and to identify areas of cost uncertainty that the project team would target with a view to achieving greater certainty.