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STR N421 - Lecture 5 - 2011

# Drmagedezzatgeorgy variable variable risks the

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Unformatted text preview: s or extensive analysis. Dr. Maged Ezzat Georgy Variable Variable Risks The average risk allowance (contingency) for a certain variable risk is the risk-induced cost with 50% chance of being exceeded. 50% 50% Dr. Maged Ezzat Georgy Variable Risks The maximum risk allowance (contingency) for a certain variable risk is the risk-induced cost with 10% chance of being exceeded. 90% Dr. Maged Ezzat Georgy 10% Fixed Fixed Risks Let us take an example... Risk Ult. Cost Average Maximum Productivity \$100k \$25,000 \$80,000 Exchange rate \$200k \$30,000 \$130,000 Subsurface cond. \$80k \$12,000 \$55,000 . \$67,000 \$265,000 . Σ Dr. Maged Ezzat Georgy Decision Trees Decision Decision Trees Primarily used in the field of decision-making. In quantitative risk analysis, this technique is a way of looking at multiple interdependent risks. In a way, it expands on the expected value approach. Dr. Maged Ezzat Georgy What’s a De...
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