Risk Modeling for Determining Value and Decision Making

Risk Modeling for Determining Value and Decision Making

Published:
Content:
Author(s):
Free Standard Shipping

Purchasing Options

Hardback
ISBN 9781584881674
Cat# C1674

$104.95

$83.96

SAVE 20%


Other eBook Options:
 

Features

  • Written in plain English and in an easy to read, narrative style - keeps statistical jargon to a minimum
  • Explains and exemplifies state-of-the-art risk-related technologies
  • Focuses on the value of opportunities and using value to rank and prioritize them
  • Presents real-world examples from a broad range of applications
  • Summary

    Risk or uncertainty assessments are used as aids to decision making in nearly every aspect of business, education, and government. As a follow-up to the author's bestselling Risk Assessment and Decision Making in Business and Industry: A Practical Guide, Risk Modeling for Determining Value and Decision Making presents comprehensive examples of risk/uncertainty analyses from a broad range of applications.

    Decision/option selection Manufacturing
    Environmental assessment Pricing
    Identification of business drivers Production sharing
    Insurance Scheduling and optimization
    Investing Security
    Law

    Emphasizing value as the focus of risk assessment, this book offers discussions on how to make decisions using each risk model and what insights the model can provide. The presentation of each model also includes computer code that encapsulates its logic and direction on how to apply the model to other types of problems.

    The author devotes a chapter to techniques for consistently collecting data in an inconsistent world and offers another chapter on how to reflect the effect of "soft" issues in the value of an opportunity. The book's final chapters delineate the techniques and technologies used to perform risk/uncertainty analyses, including sections on distribution, Monte Carlo process, dependence, sensitivity analysis, time series analysis, and chance of failure.

    Visit RiskSupport.com for more information!

    Table of Contents

    INTRODUCTION
    Scope Realism
    Models, Validation, and Precision
    Value
    TWO APPROACHES TO SOLVING DECISION TREES-A CLASS-ACTION SUIT EXAMPLE
    Introduction
    Building the Decision Tree
    What is the Question?
    Interpretation of the Probabilistic-Branching Model
    So, So What?
    TERRORISM RISK MODELS-RELATIVE AND ABSOLUTE RISK
    Terrorism Relative-Risk Model
    What is the Question?
    Building the Contributing-Factor Diagram for the Relative-Ranking Terrorist-Threat Risk Model
    Category Weights
    Relative-Risk Model Equations
    Relative-Risk Model Applied to Terrorist Organization #1
    Relative Risk Model Results from Evaluation of Terrorist Organization #1
    Relative-Risk Model Applied to Terrorist Organization #2
    Relative-Risk Model Results from Evaluation of Terrorist Organization #2
    Comparison of the Two Terrorist Organizations
    Building the Terrorism Absolute-Cost Risk Model
    Absolute-Cost Risk Model Equations
    Application of the Absolute-Cost Risk Model to Terrorist Organization #2
    Absolute-Cost Risk Model Results for Evaluation of Terrorist Organization #2
    So, So What?
    GATHERING INFORMATION CONSISTENTLY IN AN INCONSISTENT WORLD
    Introduction
    The Problem
    The Solution
    So, So What?
    NEW MANUFACTURING FACILITY- BUSINESS-JUSTIFICATION MODEL
    Introduction
    What is the Question?
    Construction of the Contributing-Factor Diagram
    Populating the Model with Data
    Risk Model Equations
    Results from Model Execution
    So, So What?
    OIL-FIELD-DEVELOPMENT INVESTMENT-OPPORTUNITY RISK MODEL
    Introduction
    What is the Question?
    Categories and Variables
    Field-Development Risk Model Equations
    Populating the Model with Data
    Results from Model Execution
    So, So What?
    USING CHANCE OF FAILURE AND RISK-WEIGHTED VALUES TO REFLECT THE EFFECT OF "SOFT" ISSUES ON THE VALUE OF AN OPPORTUNITY
    Introduction
    Accurate Estimates of Value are Essential
    Types of Chance of Failure
    How to Express and use Chance of Failure
    Risk-Weighted Values and the Value of a Portfolio Element
    Value of a Portfolio Composed of Dissimilar Elements
    So, So What?
    PRODUCTION-SHARING AGREEMENT RISK MODEL
    Introduction
    What is the Question?
    Building the Contributing-Factor Diagram
    Risk Model Equations
    Populating the Model with Technical Data
    Chances of Abject Failure
    Populating the Model with Financial Data
    Results from the Model
    So, So What?
    SCHEDULING AND OPTIMIZATION RISK MODEL
    Introduction
    The Problem
    Design of the Model and the Contributing-factor Diagram
    The Risk Model Code
    Results from Model Execution
    So, So What?
    DECISION/OPTION-SELECTION RISK MODEL
    Introduction
    The Current Situation
    The Problem
    Results from Model Execution
    So, So What?
    RISK PROCESS TO IDENTIFY BUSINESS DRIVERS, MAXIMIZE VALUE, AND DETERMINE THE VALUE OF POTENTIAL EXPENDITURES
    Introduction
    The Problem
    The Risk/Uncertainty Model
    Populating the Model with Data
    Results from Model Execution
    Determining Business Drivers and Maximizing Value
    Determining the Value of New Information/Services
    So, So What?
    SUMMARY
    Other Applications
    It is Mostly the Process - Not the Technology
    Accomplishment of Vision Generates Real Returns
    Exploration Example
    Maintenance/Construction Example
    BUILDING A CONSENSUS MODEL
    What is the Question? - Most of the Time and Effort
    Consensus Model
    Group Dynamics
    Write it Down
    Sort it Out
    Group Dynamics Again
    Units
    Overarching Categories
    BUILDING A CONTRIBUTING-FACTOR DIAGRAM
    The Contributing-Factor Diagram - Getting Started
    Identify and Define Variables
    Ask the Right Question
    Double-Dipping
    Double-Dipping and Counting the Chickens
    Fixing the Double-Dipping and Counting of Chickens Problem
    CFD-Building Example
    Short List of Hints for Building a CFD
    MONTE CARLO ANALYSIS
    A Bit of History
    For What is it Good?
    Simple Monte Carlo Example
    How Many Random Comparisons are Enough?
    Output from Monte Carlo Analysis - The Frequency and Cumulative Frequency Plots
    Interpreting Cumulative Frequency Plots
    Combining Monte Carlo-Output Curves
    DECISIONS AND DISTRIBUTIONS
    Decisions
    Just what is a Distribution?
    Distribution - How to Approach Them
    Symmetrical Distributions
    Skewed Distribution
    Spike Distributions
    Flat Distributions
    Truncated Distributions
    Discrete Distributions
    Bimodal Distributions
    Reading Data from a File
    Peakedness
    "Specific" Distribution Types
    CHANCE OF FAILURE
    Chance of Failue - What it It?
    Failure of a Risk Component
    Chance of Failure that does no affect and Input Distribution
    Incorporating chance of Failure in a Plot of Cumulative Frequency
    Another Reason for chance of Failure
    The "Inserting 0s Work Around"
    COF and Multiple Output Variables
    TIME SERIES ANALYSIS AND DEPENDENCE
    Introduction to Time-Series Analysis and Dependence
    Time-Series Analysis - Why?
    Time-Series Analysis - How?
    Time-Series Analysis -Results
    Some Things to Consider
    Dependence - What is It?
    Independent and Dependent Variables
    Degree of Dependence
    Multiple Dependencies and Circular Dependence
    Effect of Dependence on Monte Carlo Output
    Dependence - It's Ubiquitous
    RISK-WEIGHTED VALUES AND SENSITIVITY ANALYSIS
    Introduction to Risk-Weighted Values and Sensitivity Analysis
    Risk-Weighted Values - Why?
    Risk-Weighted Values - How?
    The Net Risk-Weighted Value
    The Economic Risk-Weighed Resource (ERWR) Value
    Risk-Weighted Values - The Answer
    Sensitivity Analysis - Why?
    Sensitivity Analysis - How?
    Sensitivity Analysis - Results

    Editorial Reviews

    "This book makes for some interesting reading and is notable for addressing important nontechnical issues related to modeling risk…it provides insight into the way in which some nontechnical people think, thus offering a potential for better communication with business-oriented clients."
    - Technometrics, May 2001

    "This book is based on the original work of the author, who is a well-known specialist in the field of decision and risk analysis. …The narration of the issues of concern referring to making decisions is excellent and gives the proper atmosphere of a proper discussion to address decisions of large investments or important topics. …the overall practical experience of the author adds value… The book is important. It brings to the potential reader a challenging way of looking into the decision-making process by using direct approaches …The advantage of the book is that it addresses the decision -making process in a direct and simple manner, following patterns given by the author in the contributing-factor diagram… I f one is serious about using the knowledge of decision analysis in one's practical, everyday work, this book is worth the price…this book is worth reading and, to the extent possible, integrating in various tasks for solving decision problems facing a corporation or a person."
    -JASA, September 2001

    "An instructor should consider this book for class use, because it gives a direct approach to the decision-making process, uncertainty, and risk estimation and how to interpret such knowledge in assessing and determining the values of potential alternatives, which are not always explicitly expressed by managers, stakeholders, or decision makers."
    -JASA, September 2001