Probability Analysis: Many kinds of probability analysis:
A) FMEA, just presented, is one: the “likelihood” of a risk event happening is its “probability” of occurrence.
B) PERT analysis can also be used:
- The network is established as part of CPM, thus providing a model for us to experiment on, asking “what if” questions.
- The addition of time and cost distributions to the estimated/planned times (i.e. pessimistic and optimistic times and costs for each activity) enables us to explore probabilities of completion on time and within budget, thus exploring risk issues.