Level:
Advanced
TCM Section(s):
7.6. Risk Management
3.3. Investment Decision Making
Venue: 2022 AACE International Conference & Expo
Abstract: Project organizations make decisions about projects including whether to pursue the project, its technical configuration, how to organize it, locate it, finance it, what “done” means, how long will it take and how much will it cost.These decisions take studies, analyses of alternatives and expert judgment before the project is sanctioned.During the gestation period for any significant project strategic decisions are being made, and one of the main considerations will include the balance of risk in any alternative.This paper addresses analyzing risk in a decision model simplified to highlight the important risks that make a difference about which project to do, its configurations and indeed whether to do a project at all.
The purpose of this paper is to describe and discuss some of the risk analysis tools that can be used when these important scoping strategies are being developed by senior management of any project-oriented organization. These important decisions are made well before there is a project plan, schedule and cost estimate.The paper proposes to develop models simplified to highlight the key risk events of an alternative under consideration and some tools that are available currently to address them. These tools bring clarity, transparency, traceability, repeatability and consistency with recommended practices of project risk analysis.Simple models were developed to illustrate two of these methods, probabilistic branching and conditional branching.One of the desired outcomes is to introduce these methods and their use to organizational senior management and engage them in the tools’ development for their project.
TCM Section(s):
7.6. Risk Management
3.3. Investment Decision Making
Venue: 2022 AACE International Conference & Expo
Abstract: Project organizations make decisions about projects including whether to pursue the project, its technical configuration, how to organize it, locate it, finance it, what “done” means, how long will it take and how much will it cost.These decisions take studies, analyses of alternatives and expert judgment before the project is sanctioned.During the gestation period for any significant project strategic decisions are being made, and one of the main considerations will include the balance of risk in any alternative.This paper addresses analyzing risk in a decision model simplified to highlight the important risks that make a difference about which project to do, its configurations and indeed whether to do a project at all.
The purpose of this paper is to describe and discuss some of the risk analysis tools that can be used when these important scoping strategies are being developed by senior management of any project-oriented organization. These important decisions are made well before there is a project plan, schedule and cost estimate.The paper proposes to develop models simplified to highlight the key risk events of an alternative under consideration and some tools that are available currently to address them. These tools bring clarity, transparency, traceability, repeatability and consistency with recommended practices of project risk analysis.Simple models were developed to illustrate two of these methods, probabilistic branching and conditional branching.One of the desired outcomes is to introduce these methods and their use to organizational senior management and engage them in the tools’ development for their project.