What is P50 and P90?

What is P50 and P90?

The risk model contains inputs into possible variance of the quantities, rates of items known as planned risk and unplanned risk events from a risk register. The risk simulation is run 10,000 times generally and picks a number within the ranges assigned and calculates an overall outturn cost and plots the result. The software performs this calculation another 9,999 times plotting a point for each simulation, ending up with a histogram of 10,0000 points. The histogram is plotted as a cumulative distribution graph and the 50th and 90th percentile values are read off the cumulative distribution graph. Statistically, P50 and P90 represent the confidence level of a cost not being exceeded. A P50 value has a 50% probability that it will be exceeded, whereas, a P90 only has a 10% probability of being exceeded.

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