Cost Risk Mastery: Monte Carlo for Building Projects

Name: Cost Risk Mastery: Monte Carlo for Building Projects
Rating: 4.0 (22 reviews)

Learn Monte Carlo Simulation to forecast, control, and optimize project costs

Created byMartial Youadjeu.

Last updated 9/2025

English

What you'll learn

Defining what is a risk in a project context
Learning the processes of risk management
Understand the various concepts associated to contingency and cost risks
Learn the various steps required to run a Monte Carlo Simulation
Learn how to develop a Monte Carlo simulation in MS Excel using VBA interface
Get the VBA code for practicing and customization

Course content

4 sections • 19 lectures • 3h 19m total length

Introduction4:09
Explore measuring cost risk in construction using Monte Carlo analysis in Excel, covering cost estimation, risk terminology, and practical Excel/VBA steps to quantify budget confidence.
Corporate decision, Project objectives, accuracy of cost estimates11:05
The lecture explains how project objectives—scope, time, and cost—drive corporate decisions, highlights cost estimates, risk, and the need to optimize limited financial resources using Monte Carlo analysis to assess contingencies.
Risks: Definition and Identification11:19
Define risk as an uncertain event that may affect project objectives, and outline risk management steps: planning, risk identification, analysis, risk register, response planning, and monitoring.
Risks Analysis10:50
Identify and analyze project risks by evaluating probability, impact, and expected monetary value, then prioritize them with qualitative and quantitative analysis, including Monte Carlo analysis.
Risk Response Plan6:44
Identify and quantify risk, then craft a risk response plan that addresses opportunities and threats through contract choices, insurance, and mitigation or exploitation of risks.

Risks and Project Budgets14:08
Learn to build a cost breakdown structure, estimate activity costs, and form a project budget, then use Monte Carlo analysis to evaluate contingency and risk.
Monte Carlo Fundamentals8:36
Explore Monte Carlo fundamentals to quantify construction project risk by building probabilistic models with distributions, running thousands of scenarios in Excel VBA to estimate contingency and cost outcomes.
Procedure for Monte Carlo Analysis13:02
Perform Monte Carlo analysis of cost by identifying critical cost accounts, assigning distributions, quantifying risks, building a cost model, and running 1,000 simulations to estimate mean and contingency.

The Project Estimate as a Starting Point6:18
Leverage the project estimate as a starting point by examining cost accounts, building work packages, and uniform format classifications to assess tender costs and set contingency through Monte Carlo analysis.
Critical Cost Accounts3:11
Identify critical cost accounts, including painting, plumbing, electrical, and subcontractor costs, to establish contingency with confidence, then use preliminary estimates to run a project risk analysis and simulation.
Risks for Critical Cost Accounts10:52
Explore Monte Carlo risk modeling for critical cost accounts in Excel, defining variability, calculating ratios, and evaluating best and worst case scenarios with expert input.
Creation of the Monte Carlo Model in Excel16:51
Build an Excel-based Monte Carlo model to estimate cost risk across sixteen items, using low, most likely, and high estimates, fixed percentages, and thousands of simulated scenarios with automation.
Z value and probabilities2:04
Learn how Z values relate the expected value to probability by using average and standard deviation, and apply normal distribution to compute probabilities for cost risk in Monte Carlo simulations.
Preparation for VBA17:32
Prepare for VBA-driven Monte Carlo simulations by building a four-class model and defining class ranges. Compute mean, standard deviation, and probabilities using z-values for the risk summary.

Sub procedure to collect the number of iteration or scenari15:12
Implement a VBA sub procedure to collect the number of iterations or scenarios for a Monte Carlo simulation in Excel, including input validation and memory-efficient result handling.
Function to calculate each scenario14:47
Learn to implement a vb function that calculates each Monte Carlo scenario from low, most likely, and high estimates, using random numbers and a sixteen-scenario total.
Sub procedure to calculate all scenario or all iterations9:28
Explore a sub procedure to run every scenario in a Monte Carlo simulation by computing each iteration, storing results in an array, and timing the process for speed.
Testing and running the program19:52
Test and run a Monte Carlo simulation in Excel using VBA macros, executing thousands of scenarios to estimate cost risk, confidence levels, and contingency reserves.
Closing Remarks3:43
Closing remarks show how to use Monte Carlo simulation with Visual Basic to assess project cost risk, build models, and run scenarios for career-ready insights.

Requirements

Beginner in VBA
Beginner in MS Excel
Beginner in Monte Carlo Simulation

Description

Master Cost Risk Management for Building Projects Using Monte Carlo Simulation

Want to know exactly how cost risks can make—or break—your building project? This course shows you step by step how to measure and manage them like a pro.

We start with the essentials: risk management fundamentals, project objectives in the context of corporate finance, and the real meaning of “risk.” You’ll see how traditional approaches to cost risk often fall short—and why.

Next, we dive into Monte Carlo Analysis, a proven method used by top organizations to predict project cost outcomes. You’ll learn the process based on recognized best practices and see why it outperforms conventional methods.

Then, using a realistic sample project, we’ll identify critical cost accounts and their risks. You’ll build a Monte Carlo model from scratch and prepare it for VBA simulation—getting hands-on with Excel like a true cost-risk expert.

Finally, we go full action mode in the VBA interface:

Collect user-defined iterations
Calculate total costs per iteration
Generate parameters for the full simulation
…and test it all to make sure it works perfectly.

Bonus: Excel files and VBA codes are downloadable so you can follow along and replicate everything.

!!! For educational purposes only—consult a professional before applying to real projects.

Take this course if you want confidence in cost forecasting, smarter risk management, and the tools to simulate every scenario before it hits your budget.

Who this course is for:

Risk management amateur
Risk management professional
Cost Engineer
Managers
Anyone interested in cost risk analysis

Cost Risk Mastery: Monte Carlo for Building Projects

What you'll learn

Explore related topics

Course content

1.0. FUNDAMENTALS5 lectures • 44min

2.0. CONCEPTS3 lectures • 36min

3.0. APPLICATIONS WITH EXCEL6 lectures • 57min

4.0. APPLICATIONS WITH VBA & EXCEL5 lectures • 1hr 3min

Requirements

Description

Who this course is for: