Overview

Included in degrees & certificates

• 289
• 379

Prerequisites

• OS3080
• OS3701

Learning Outcomes

Understand the Concepts of Risk and Uncertainty in Cost Estimation:

• Define risk and uncertainty as they relate to cost estimation and distinguish between the two.
• Explain the impact of risk and uncertainty on project cost estimations and the importance of managing them effectively.

Identify and Analyze Risks Associated with Cost Estimation:

• Learn to identify potential risks in cost estimation processes and projects.
• Use qualitative and quantitative risk analysis techniques to assess the impact and likelihood of identified risks.

Model Risk and Uncertainty in Cost Estimates:

• Apply probability distributions (e.g., normal, lognormal, triangular) to represent uncertain costs.
• Use statistical methods and tools like sensitivity analysis and scenario planning to model and understand the impact of risk and uncertainty on cost estimates.
• Learn and become comfortable with software packages for Monte Carlo Simulation such as @Risk, ACEIT and Crystal Ball.

Apply Risk and Uncertainty Principles in Cost Estimation:

• Learn how and where to apply uncertainty to point cost estimates.
• Learn to assess the quality of risk and uncertainty quantification as applied to existing cost estimates.
• Starting with a point cost estimate, learn how to judiciously apply risk and uncertainty principles to develop a risk-adjusted cost estimate.

Advanced Techniques for Managing Uncertainty:

• Explore advanced methods for dealing with uncertainty in cost estimation, including analytical approaches such as scenario-based methods and Formal Risk Assessment of System Cost Estimates (FRISK).Understand how to update cost estimates and risk assessments as new information becomes available.