Is Something Missing from Project Risk Management? Correlation Matters

Abstract

In this paper, we show that correlations between the durations of project activities can change the project’s total variance and some risk sensitivity indexes such as the Cruciality (CrI) and SSI (Schedule Sensitivity Index). These results are relevant in project risk management as correlations may change risk response strategies, and monitoring efforts should focus on other activities. We performed Monte Carlo simulations using different network topologies with different characteristics.