A circular error probability (CEP) metric in ballistic missile science is an experimental indicator of the accuracy of a missile system. There are a lot of error sources that cause a ballistic missile to deviate from its ideal trajectory, and that causes a deviation from required CEP. This work discusses the problems of dispersion of ballistic missiles due to inertial navigation system (INS) errors. INS deterministic errors are usually calibrated and compensated using some proper techniques. However, INS stochastic errors can be modeled and analyzed. In this study, a chosen missile is thoroughly analyzed using the six degrees-of-freedom missile flight trajectory simulator. A Monte Carlo simulation is used to generate a large number of flight trajectories to inspect the effect of INS stochastic noise on missile CEP. Moreover, a strategy for selecting an adequate sensor according to mission requirements and its corresponding sensor errors is introduced.