What if the assumptions change?
Named adjustments applied in order, so any forecast can be traced back to what produced it. The honest output is the spread between scenarios, not the middle one.
What the budget becomes under different assumptions
Every scenario is a list of named adjustments applied in order, so any forecast can be traced back to the assumption that produced it.
Adjustments
Give either a percentage or a fixed amount. Percentages apply to the running total, so order matters and is shown.
Group adjustments into scenarios by name. Anything sharing a scenario name is applied together, in the order listed.
Where each scenario lands
Scenario by scenario
How scenarios are built
Each adjustment is applied to the running total in the order listed. A percentage compounds off whatever the total is at that point, which is why the order is shown and the basis of every step is recorded.
Nothing is predicted. These are the arithmetic consequences of assumptions you supplied. The useful output is usually the spread between scenarios rather than any single figure.
This is not a risk simulation. Scenarios are discrete what-ifs; they say nothing about how likely any of them is. For probability-weighted exposure use the cost risk simulator, which samples thousands of outcomes.
Scenarios are not forecasts
A scenario says: if rates rise 8% and we add the reporting module, the budget becomes this. It does not say that will happen, and it does not say how likely it is.
That distinction gets lost the moment a single number leaves the room. The honest way to present this work is the spread — here is the range these assumptions produce — rather than picking the middle one and calling it the forecast.
Order matters with percentages
Adding 45,000 of scope and then applying an 8% rate rise is not the same as applying the rise first. The difference is 8% of the scope addition, which on a large change is real money.
Every step here shows what it was calculated on, so a number can always be traced rather than merely reproduced.
Test contingency against the worst case, not the likely one
Contingency exists for the case you did not plan for. Comparing it against your central scenario tells you nothing useful; comparing it against the worst credible combination tells you whether the reserve is real.
If the worst case sits comfortably inside contingency, you are probably holding too much. If it is far outside, the reserve is decorative.