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Probability Analysis-Risk Analysis

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.

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