Understanding Fixed Percentage Contingency


The second type of contingency profile – Fixed Percentage – simply adds a proportional risk buffer to the schedule and effort/cost of an existing estimation service solution.  Unlike the Target Probability method, this type of contingency profile doesn’t factor in input uncertainty or use Monte Carlo simulation. Adjusting the uncertainty slider bars has no effect on contingency solutions calculated using a fixed percentage profile.  Fixed percentage contingency is a straightforward calculation. Applying a 10% schedule/20% cost profile to an estimate will produce the following results:

      If the current solution estimated schedule is 10 months, a 10% fixed percentage schedule contingency adds 1 month (10% of 10 months) of schedule buffer.

      If the current solution estimated cost is $1 million, a 20% fixed percentage cost contingency adds $200,000 dollars (20% of 1 million) of cost buffer.

For more detailed guidance on working with fixed percentage profiles, see the Creating Fixed Percentage Solutions and Creating a Contingency Profile sections of this user guide.