Triangular distribution
A distribution defined by minimum, most likely and maximum values; widely used for expert-elicited ranges in cost and schedule models.
Risk driver
A discrete risk modelled with a probability and an impact range that can affect several activities at once, used in AACE RP 57R-09 to integrate cost and schedule risk.
Contingency
The difference between the point estimate and the estimate at the confidence level management chooses to fund (GAO-20-195G).
Confidence level
The probability that the outcome will not exceed a given value; P80 is the value with an 80% chance of not being exceeded.
Monte Carlo simulation
A technique that randomly samples values for uncertain inputs many times to simulate a model and build the probability distribution of its output (GAO-20-195G).
Root cause event
The underlying event that sets off a chain of intermediate events leading to a risk event; KRIs tied to root causes give the earliest warning (COSO, 2010).
Trigger point
A pre-determined level of a KRI that, when reached, requires defined action or escalation by management (COSO, 2010).
Leading indicator
An indicator that changes before the risk event it relates to, often by tracking a root cause or intermediate event, so action can be taken in advance.
Key performance indicator
A metric that gives a high-level view of performance, usually focused on results that have already occurred (COSO, 2010).