Uncertainty and Risk Analysis
Copyright 1999 Business Dynamics PricewaterhouseCoopers United Kingdom firm. All rights reserved.
Table of Contents
1
Introduction
..................................................................................................................12
Phases of risk analysis
..................................................................................................23
Identifying the risks
.......................................................................................................4
Introduction.............................................................................................................................4Initial risk identification workshops.......................................................................................4The risk register......................................................................................................................8Using a model to identify risks................................................................................................9
4
Quantifying risks
.........................................................................................................10
Which risks should be quantified?........................................................................................10Theoretical background to quantifying risks.......................................................................11Separating risks out...............................................................................................................20A review of the issues that arise when quantifying risks with experts.................................21
5
Risk analysis
...............................................................................................................24
Introduction to Monte Carlo analysis...................................................................................24Identifying the significant risks.............................................................................................28A practical example of the identification of key risks..........................................................31
6
Presenting the results
.................................................................................................32
Graphical presentation..........................................................................................................32Statistical measures...............................................................................................................35Presenting it in English.........................................................................................................37
7
Beyond presentation
....................................................................................................38
Introduction...........................................................................................................................38Valuing risk...........................................................................................................................38What does a distribution of NPVs mean?.............................................................................40
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