Chapter 8 – Cost through the schedule
The Quantitative Schedule Risk Analysis Handbook · Edition 1, August 2026 · by the team behind [Epoch SRA](https://epochsra.com), an Excel add-in for schedule risk analysis · corrections welcome at contact@epochsra.com
Schedule risk and cost risk are usually analyzed by different people with different tools, then stapled together in a review. The staple is the weakness: on most programs, the dominant cost risk is the schedule. Standing armies bill by the day whether or not the chamber is free; every week of slip is payroll, facilities, and overhead with no offsetting progress. A cost model that does not ride on the schedule distribution is modeling a different program.
The mechanism: one simulation, two readouts
The honest construction requires no second model. Each simulated future already contains every task's duration. Give tasks a burn rate – cost per working day – and a fixed cost where one exists, and each iteration prices itself: task cost equals fixed plus rate times that future's duration; program cost is the sum, plus the cost impacts of whichever discrete risks fired in that future. Twenty thousand futures yield a cost distribution exactly as they yielded a date distribution – same draws, same correlations, no stapling.
Two numbers fall out that reviews immediately adopt. The cost P80: the budget figure with a stated confidence, replacing the traditional single estimate plus arbitrary contingency percentage. And the delay price: across the joint samples, the expected cost per week of finish slip past P50 – schedule risk translated into the only unit some steering committees hear. "This risk moves P80 by six weeks" lands differently when the next line reads "at €85k per week."
Where the rates come from, and what that means
Burn rates are the user's numbers – loaded labor, facility costs, level-of-effort overheads. This is both the method's practicality (every program controller has them) and its honesty boundary: the cost distribution inherits its shape from the calibrated schedule simulation, but its scale from your rates. It is therefore derived, not calibrated – no replay of historical cost outcomes stands behind it unless one has actually been run. A tool or analyst who labels cost percentiles with the same confidence as backtested schedule percentiles is borrowing credibility the numbers have not earned. Say "derived from the schedule simulation through your rates" and the number is defensible; say "calibrated" and it is not.
What this replaces
The traditional alternative is contingency-by-percentage: estimate the cost, add 15% because the last program added 15%. The joint construction replaces a folk number with a distribution: contingency becomes the distance from your point estimate to your chosen cost percentile, and it moves when the schedule risk moves – which is the whole point. When a mitigation kills a risk, its cost consequence is measurable in the same run that measures its schedule consequence, and the mitigation's business case writes itself.
--- In practice: put a burn rate on your five largest level-of-effort tasks – payroll divided by working days is enough – and compute what one month of program slip costs. That single number, however rough, upgrades every schedule-risk conversation your program will have this year.