A stochastic risk analysis through Monte Carlo simulation applied to the construction phase of a 600 MW gas turbine plant

Description

Construction projects are characterized by great uncertainty. Appropriate risk analysis techniques are required to estimate the adequate coverage level against the occurrence of extra costs to increase the progress of the project in the tenders. The project margin increases when an excessive provision leads to a more comprehensive coverage of the risks. The purpose of this research is to apply an innovative analysis method based on Monte Carlo Simulation (MCS) to a real project to demonstrate the advantages of a study in a stochastic regime. The amount of contingency determined by the proposed approach is more accurate compared with the previous method used by the company. In the illustrated application, MCS has been applied even to the study of the work progress status.

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