During cost estimation training events and consulting efforts, the author is often asked about the similarities and differences between two common risk methodologies: Method of Moments and Monte Carlo. These methodologies are used in a number of commercial software tools, such as TruePlanning®, Crystal Ball®, and @Risk®. Cursory observations show that the results are similar. However, a full study of the similarities and differences has not been done with regard to the behavior of these two risk methodologies within a commercial parametric estimating framework such as TruePlanning®.
Independent of the method used, one of the most abstract tasks facing the cost estimator is how to spread risk dollars across a program once the risk analysis has been completed. Programs differ, phases differ, inherent program risks differ; there is no one perfect solution for every situation. The author will examine several risk phasing methodologies to assist the estimator in choosing an appropriate solution.