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Unformatted text preview: 1 CVEN 349: Civil Engineering CVEN 349: Civil Engineering Project Management Project Management LECTURE # 7 Fall 2009 Dr. Ivan Damnjanovic Risk Analysis Risk Analysis Procedure Procedure 1. Figure out what could go wrong ( hazard identification ) 2. Figure out what would happen next ( event propagation ) 3. Figure out what the outcomes would be ( consequence calculation ) 4. Consider risk level & what you can/should do about it ( Risk Assessment & Mitigation ) “Event Tree” “Event Tree” Material On Time Right Material Wrong Material +$1,500,000 +$1,000,000 0.95 Outcome Probability 500k 0.005 900k 0.010 1M 0.070 1.4M 0.06 On Time Material Late Crew Agrees To OT No OT Right Material Wrong Material Right Material Wrong Material +$900,000 +$1,400,000 +$1,000,000 +$500,000 0.9 0.7 0.85 0.85 1.5M 0.855 Expected Value: $1.448M 2 What is a Decision? What is a Decision? A decision is a choice between alternatives that involves an irrevocable allocation of resources. ¡ No choice? Not a decision. ¡ No irrevocable allocation of resource? Not a decision. Do the following statements represent Do the following statements represent decisions? decisions? ¡ I’ve decided the sky is blue. ¡ I’ve decided that I deserve an A in 349. ¡ I’ve decided to mow the lawn today....
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- Fall '09
- Decision Making, good decision, multiple objectives