P10, P50, and P90 from Monte Carlo
When a calculation runs thousands of times over input ranges, three percentiles summarize the whole answer cloud, provided everyone agrees which tail is which.
The equation
P90: exceeded in 90 percent of trials. P50: the median. P10: exceeded in 10 percent
- In resources convention, P90 is the conservative low case
- P10 is the upside, exceeded only one time in ten
- Cost estimating often flips the labels, so always state the convention
Worked example
A probabilistic volume run returning P90 of 32.1, P50 of 56.9, and P10 of 95.0 million barrels says the field very likely exceeds 32 and has one chance in ten of beating 95. Note the mean can sit above the P50 when the distribution skews high.
When to use it
Percentiles of a total do not add across fields or line items: summing P90s produces something far more pessimistic than the portfolio P90. Aggregate the trials, then take percentiles of the sum.
Related Calculators and Reference
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- Construction Cost Risk Calculator: turn line item ranges into a confident budget.
- American Concrete Institute: authoritative guidance on concrete practice.