Risk

decision making under risk

Decision Making Under Risk and Uncertainty

Decision making under risk and uncertainty is a fact of life.  There are many ways of handling unknowns when making a decision.  We will try to enumerate the most common methods used to get information prior to decision making under risk and uncertainty.  We’ll also look at decision rules used to make the final choice.  For …

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Evaluating an R&D Project with a Decision Tree

Decision trees are useful for projects that proceed in stages where investment decisions may change over time.  In this application brief, we will use decision tree analysis to evaluate a research and development project where we are uncertain if a commercial product can be produced as a result of the research portion of the project. …

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Exposing Project Schedule Risk Hidden in Best Estimates

When we try to estimate a project completion time, often the temptation is to use a best guess completion time for each task, find the critical path, and add up the times.  This method lacks information about the project schedule risk, and if done honestly, often results in a finish time later than the due …

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Project Risk Analysis - Hanging Climber

Qualitative vs. Quantitative Project Risk Analysis – What’s the Difference?

As part of risk management, a project risk analysis is performed to assess the impact of risks and the probability of the risk occurrence.  In this article we will look at the differences between qualitative and quantitative project risk analysis. To see how project risk analysis fits within risk management, please refer to this article. …

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Ways to Mitigate Risks to Business Inputs and Outputs

Risk is a broad term that can apply to many situations. For this article, we are talking about ways to mitigate business risks to inputs and outputs. Contract employment Use contract employees to scale up/scale down employment needs.  The potential downside is having to train temporary employees. Use contract employees that allow for exit if …

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