Project risk simulation methods – a comparative analysis
AbstractEffective risk management provides a solid basis for decisionmaking in projects, bringing important benefits. While the financial and economical crisis is present at the global level and the competition in the market is more and more aggressive, the interest in project risk management increases. The paper presents a comparative analysis of the effectiveness of two quantitative risk analysis methods, Monte Carlo simulation and the Three Scenario approach. Two experiments are designed based on real projects, in order to compare the effectiveness of these methods. The conclusions of the comparative analysis are that Three Scenario approach, even if is not as accurate as Monte Carlo, assures the results stability, if the same shape of the probability distribution curve is considered. The Three Scenario approach is easy to be applied in practice and requires a shorter computation time than Monte Carlo.
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Bibliographic InfoArticle provided by Economic Publishing House in its journal Management & Marketing.
Volume (Year): 7 (2012)
Issue (Month): 4 (Winter)
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project risk management; Monte Carlo; Three Scenario approach; simulation.;
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