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(RISK-2592) Integrated Cost/Schedule Risk Analysis for Pre-Concept Alternatives Analysis/Technology Selection

Level: Intermediate
Author(s): Samuel Steiman, PE; Molly Donovan
Venue: 2017 AACE International Annual Meeting, Orlando, FL

Abstract: Quantitative risk analysis is commonly performed for mature projects with a well-defined baseline to estimate appropriate contingency reserves. This paper demonstrates how the integrated cost/schedule risk analysis process described in AACE® International Recommended Practice 57R-09 can be applied to projects on the opposite end of the maturity spectrum, in the pre-concept phase, where alternatives analysis and technology selection are driving considerations.

The application is a company evaluating advanced nuclear reactor technologies in different sizes/configurations to commercialize a full-sized multi-module power plant. The integrated cost/schedule risk results provide insights not available from the best-guess/deterministic cost/schedule estimates, and are key to identifying the preferred alternative from a cost/schedule perspective.

This paper describes the process for building a functional cost/schedule model, demonstrating a practical application of the 57R-09 guidelines for mapping a billion dollar cost estimate into summary-level resources, building a schedule at the appropriate level of detail, adding risks/uncertainties, and interpreting the results unique to integrated cost/schedule analysis. Finally, this paper presents a unique approach to applying probabilistic cashflow results to develop a recommended project funding plan.