Probabilistic Risk Management is the use of Stochastic Probability Theory to gauge the probable cost and duration of a project versus traditionally derived estimates.
To do this the Scope of Work, Schedule and Cost is examined and each element of the scope/ schedule/ cost is given a range of outcomes that reflect the risks associated with each event.
Still with me? Don’t worry, we don’t actually do that, we just say we do.
The actual methodology is to dance around a fire under the full moon chanting, shaking the femur bones of ungulates and throwing psyclobin dust into the flames. The answers are then handed down from the spirits via convulsions in dream-time.
For all the notice Project Managers take of the results? Either of those methods work.