Estimation methods

Risk Companion supports two estimation methods for each perspective. Pick the one that matches your confidence level and analysis needs.

Single point estimation

Enter one value per perspective representing your best estimate of the impact. Risk Companion uses this value directly in all calculations, including EMV and ETV.

Financial Impact: $250,000

When to use single point

You have high confidence in the estimate
The risk is well understood and recurring
You need a quick initial assessment
Deterministic reporting is required

Triangular (3-point) estimation

Enter three values per perspective to capture the range of possible outcomes. This method models uncertainty explicitly and is required for Monte Carlo simulation.

The three values

Min

$100,000

Best-case scenario

Mode

$250,000

Most likely outcome

Max

$500,000

Worst-case scenario

When to use triangular

Significant uncertainty exists around the estimate
You plan to run Monte Carlo simulations
The risk is new or complex with limited historical data
Stakeholders need to see the range of possible outcomes

How triangular feeds Monte Carlo

When you use triangular estimation, Risk Companion can run a Monte Carlo simulation across all risks in a project. The simulation samples thousands of random values from each triangular distribution, then aggregates them to produce a probability distribution of total project exposure.

This gives you confidence intervals (for example, the P80 value) rather than a single number, which is far more useful for setting contingency reserves and communicating risk to stakeholders.

Simulation workflow

1
Assess with triangular values
Enter Min, Mode, and Max for each impact perspective on every risk you want included.
2
Run the simulation
Risk Companion samples from each triangular distribution and aggregates the results across all project risks.
3
Review the output
The results show a probability distribution with key percentiles (P10, P50, P80, P90) so you can set reserves at the confidence level your organisation requires.

Choosing the right method

You can mix methods across perspectives within the same risk. For example, use single point for financial impact where you have a firm quote, and triangular for schedule impact where the timeline is less certain.

When using triangular estimation, keep the mode as your best estimate. Set Min and Max to realistic bounds rather than extreme outliers, as wide ranges can skew Monte Carlo results.