Simulation in Project Management – Definition and Meaning
A simulation in project management is the analytical technique of modeling various project scenarios to examine and understand their potential impacts on project objectives (such as schedule, costs, or resource utilization). It is used to test possible outcomes of different actions or the effects of uncertainties and risks, typically through “what-if” analyses or more advanced methods like Monte Carlo simulation, in which variables and assumptions are systematically varied.
Example, best practice, and further information
In a construction project, a simulation could be used to calculate the likely impact of different weather delay scenarios on the overall project completion date. A best practice is to apply simulation techniques for quantitative risk and opportunity analysis as well as for evaluating alternative project plans. This aligns with techniques such as scenario analysis or Monte Carlo analysis in the PMBOK Guide and can be compared to planning games used in agile methods. Simulations support informed decision-making and improve flexibility in dealing with uncertainty.