Risk and decision analysis in projects

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Bibliographic Details
Main Author Schuyler, John R., 1950-
Format Electronic eBook
LanguageEnglish
Published Newtown Square, Pa. : Project Management Institute, ©2001.
Edition2nd ed.
Subjects
Decision making.
Uncertainty.
Risk management.
Decision making > Mathematical models.
elektronické knihy
electronic books
Online AccessFull text
ISBN9781628700541
1628700548
1880410281
9781880410288
Physical Description1 online resource (xiii, 259 pages) : illustrations

Cover

Table of Contents:
  • Chapter 1 Risk and Decision Analysis 3
  • Decision Problems 3
  • Credible Analysis 5
  • Risk and Uncertainty 6
  • Frequency and Probability Distributions 7
  • Expected Value 12
  • Summary: Expected Value, the Best Estimator 17
  • Appendix 1A Moment Methods 18
  • Popular Equations 19
  • Correlation 20
  • Chapter 2 Decision Analysis Process 23
  • Ten Steps toward Better Decisions 23
  • Who Does All This Work? 28
  • Chapter 3 Decision Policy 29
  • Intuition Is a Poor Method 29
  • Decision Maker's Preferences 29
  • Attitude toward Different Objectives 31
  • Attitude toward Time Value 32
  • Attitude toward Risk 34
  • Decision Policy Summary 35
  • Crane Size Decision 36
  • Chapter 4 Utility and Multi-Criteria Decisions 41
  • Exceptions to Expected Monetary Value Decision Policy 41
  • Conservative Risk Attitude 42
  • Utility Function for Risk Policy 44
  • Multi-Criteria Decisions 49
  • Three Pillars of Decision Analysis 53
  • Decision Policy Summary 56
  • Chapter 5 Decision Trees 59
  • Decision Trees 59
  • Wastewater Plant Example 60
  • Tree Software 65
  • Decision Tree Summary 66
  • Chapter 6 Value of Information 67
  • Revisiting the Wastewater Plant Problem 67
  • Value of Information 67
  • Plant Information Alternative 69
  • Value of Information Summary 74
  • Appendix 6A Bayesian Analysis 75
  • Appendix 6B Killing the Project in Time 77
  • Early Warnings 77
  • Gateways 77
  • Point-Forward Analysis 78
  • Options Add Value 79
  • Feel Good about Your Decision 79
  • Chapter 7 Monte Carlo Simulation 81
  • Approximating Expected Value 81
  • Wastewater Plant Revisited 81
  • Monte Carlo Technique 83
  • Wastewater Plant Simulation 90
  • Simulation in Practice 93
  • Comparing Simulation to Trees 96
  • Chapter 8 Project Risk Management
  • By the Numbers 97
  • The Business Perspective 97
  • Model Scope 98
  • PMBOK Guide Sections 99
  • Pre-Project Risk Management 100
  • During the Project 100
  • Keep Your Perspective 105
  • Appendix 8A Quick-and-Dirty Decisions 107
  • Common Simple Situation 107
  • Appendix 8B Risk Management Plan 111
  • Sensitivity Analysis 111
  • Evaluating Alternatives 111
  • Appendix 8C Mitigating and Avoiding Risks 114
  • Portfolio Risks 114
  • Commodity Prices 114
  • Interest Rate and Exchange Rate 115
  • Environmental Hazards 115
  • Operational Risks 115
  • Analysis Risks (Reducing Evaluation Error) 115
  • Appendix 8D Comparison with the PMBOK Guide
  • 2000 Edition 116
  • Asset Value Perspective 116
  • Continuous Risk Events 116
  • Risk Prioritization Needs Quantification 117
  • Part II Modeling and Inputs
  • Chapter 9 Modeling Techniques 121
  • Forecasts from Models 121
  • Deterministic Project Models 122
  • Deterministic Cashflow Models 126
  • Modeling Process 129
  • Modeling Tools 133
  • Sensitivity Analysis 134
  • Dynamic Simulation Models 139
  • Summary
  • Toward Credible Evaluations 140
  • Chapter 10 Probability Distribution Types 141
  • Probability Distributions 141
  • Discrete Distributions 142
  • Continuous Distributions 144
  • Which Distribution Is Best? 149
  • Chapter 11 Judgments and Biases 151
  • Three Roles 151
  • Judgments 151
  • Biases 156
  • Improving Evaluations 158
  • Chapter 12 Relating Risks 161
  • Correlation 161
  • Sources of Correlation 163
  • Ways to Represent Correlation 163
  • Human Factors 167
  • Chapter 13 Stochastic Variance 169
  • Base Case versus Stochastic Model 169
  • Variance Analysis 172
  • Appendix 13A New Venture Analysis 178
  • Chapter 14 Exploiting the Best of Critical Chain and Monte Carlo Simulation 183
  • Critical Chain 183
  • Decision Analysis with Monte Carlo Simulation 185
  • Comparing Approaches 186
  • Combining Methods 186
  • Chapter 15 Optimizing Project Plan Decisions 191
  • It's an Optimization Problem 191
  • Example Project Model 192
  • Optimizing Activity Starts 193
  • Incentives 195
  • Optimization Experience 196
  • Simplifying Project Decisions 199
  • Chapter 16 Probability Rules 201
  • Venn Diagrams and Boolean Algebra 201
  • Key Probability Theorems 202
  • Thinking Logically 206
  • Chapter 17 Expert Systems in Project Management 207
  • Smart Computers 207
  • Expert Systems 208
  • Appendix 17A Neural Networks 213
  • Appendix 17B Fuzzy Logic 215
  • Appendix A Summary of Methods 219
  • Some Additional Methods 219
  • Deterministic or Stochastic? 221
  • Appendix B Decision Analysis Software 223
  • Spreadsheets 224
  • Monte Carlo Simulation 225
  • Decision Tree Analysis 227
  • Project Risk Management 229.

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