Modelling risk trade-off

Modelling risk trade-off

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Article ID: iaor1994110
Country: United Kingdom
Volume: 44
Issue: 5
Start Page Number: 445
End Page Number: 460
Publication Date: May 1993
Journal: Journal of the Operational Research Society
Authors:
Keywords: project management
Abstract:

This paper considers the trade-offs that may be made in the risk and uncertainty associated with various performance criteria of a project activity. Specifically, duration, cost and quality are the criteria considered, and the uncertainties in them are regarded as manifestations of the intrinsic risk of the activity. Three complementary approaches to conceptualizing and modelling risk trade-offs, as an aid to project planning, are presented in the context of a single activity. A cognitive mapping approach encourages articulation and exploration of ideas about risk trade-offs. A contingency-response analysis approach aids detailed risk contingency planning. A risk-level approach provides a picture of risk exposure options. This last approach, in particular, is developed in the context of projects consisting of sequences of activities.

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