Quantifying Cost Risk Early in the Life Cycle

摘要

A new method for analyzing life cycle cost risk on large programs is presented thatrnresponds to an increased emphasis on improving sustainability for long-term programs. Thisrnmethod provides better long-term risk assessment and risk management techniques. It combinesrnstandard Monte Carlo analysis of risk drivers and a new data-driven method developed by thernHoy and Hudak (1994). The approach permits quantification of risks throughout the entire liferncycle without resorting to difficult to support subjective methods. The Hoy-Hudak methodologyrnis shown to be relatively straightforward to apply to a specific component or process within arnproject using standard technical risk assessment methods. The total impact on system is obtainedrnusing the program WBS, which allows for the capture of correlated risks shared by multiplernWBS items. Once the correlations and individual component risks are captured, a Monte Carlornsimulation can be run using a modeling tool such as Analytica to produce the overall life cyclerncost risk.