Sign In
App icon

DAU App

Available Now!
Get the App
Click Here to Continue Browser Session   ❯
bolt

Symmetric Approximation

Updated 9/5/2019

Launch Tool
Symmetric Approximation
0 stars out of 5 based on 0 user ratings.


Symmetric Approximation is a cost risk analysis tool that is often used to compute the probability of cost overruns and/or cost underruns given a point estimate.  It has been referred to as "The Poor Man's Monte Carlo."  While it may be used to identify and evaluate different areas of uncertainty in a wide range of scenarios, in the world of contracting this typically means evaluating the elements of cost that make up the total cost.  

This Excel template allows the User to identify and enter into the simulation model those areas of uncertainty he or she wishes to evaluate.  This is followed by inputting the associated values in the appropriate matrix table.  The final step is selecting the appropriate distribution model and remembering to enter the letter associated with the distribution model into the column called "Shape."  This must be done or nothing will work.  There are five distribution models from which one can choose:  1) Normal (N), 2) Triangular (T), 3) Discrete (D), 4) Uniform (U), and 5) Beta (B). 

The goal of the Symmetric Approximation model is to combine all the sources of cost uncertainty in order to estimate the risk of exceeding the point estimate.  This is done with the understanding that after risk has been identified, the User may desire to consider taking the necessary steps in order to mitigate said risk.  For example; should the results generate a high degree of cost variance (CV), one may wish to go with a cost reimbursable type of contract to mitigate this risk.  This is only one example as there are many more.

In addition to the Symmetric Approximation tool, down below in a second tab there is a worksheet called "Over and Under Run Calculator."  This particular model was developed by DAU faculty and applies only to Normal distributions.  This tool is very easy to use.  After the mean and standard deviation have been entered, all one needs to do is enter the point estimate, then in an instant the cost overrun and cost underrun is calculated.  


Chat with DAU Assistant
Bot Image