Integrated Cost & Schedule Risk — Expected Value

What integrated risk via expected value is

The thread of this whole module is integration: not analyzing cost and schedule risk in separate silos, but recognizing they spring from the same risks. RP 65R-11 is the simplest expression of that idea. It reuses the expected-value method you already know (Lesson 9), but applies it along two dimensions at once — money and time — so the two reserves are built on a single, consistent set of risks and assumptions.

How it works

It's the expected-value method extended to two columns. For each risk in the register, you record its probability, its cost impact, and its schedule impact — then compute expected values down both:

The cost column is exactly the expected-value contingency from Lesson 9 ($220k). The schedule column applies the same logic to days of delay — giving a coordinated time reserve of about 20 days alongside the cost number, both from the identical set of risks.

Why integrate at all?

Beyond consistency, integration captures the link that drives most overruns: time costs money. When a risk delays the project, it doesn't just move the finish date — it triggers extended overheads, prolonged equipment hire, and escalation. An integrated view sees that a schedule risk is also a cost risk, and sizes both reserves accordingly.

Using integrated expected value well

Build one risk register and, for each risk, capture both its cost and its schedule impact. Compute the two expected-value totals to get a coordinated cost contingency and time reserve. Use this as a fast, transparent integrated baseline — ideal when you need both reserves quickly and consistently — and step up to simulation-based methods when the schedule network's interactions matter enough to model explicitly.

Nine things to remember

1. Integrated risk analysis treats cost and schedule as one problem.
2. 65R-11 is the entry-level method, using expected value.
3. Each risk gets both a cost EV and a schedule EV from one register.
4. Worked example: $220k cost contingency and ~20 days reserve.
5. One register keeps the two reserves consistent — no gaps or double-counts.
6. Time costs money — schedule risk is also cost risk.
7. Summed delay-days is only an approximation — schedule risk isn't additive.
8. It's the fast, transparent integrated baseline.
9. The next three lessons add parametric, Monte Carlo, and ranging rigor.