Quantitative Risk Analysis and Modeling Techniques

Sensitivity analysis, Expected monetary value analysis and Modeling & simulation techniques are used under Quantitative Risk Analysis and Modeling Techniques to get the numerical risk value of the project objectives.

Sensitivity analysis is used when we change any of the variables what can be the impact on the end result. The most common diagram used under Sensitivity analysis is Tornado diagram. It is a bar chart to compare the relative importance of the variables. The y- axis consists of different risks and the x axis represents uncertainties for range for each of these risks in the form of bar chart and is drawn from highest length to the lowest length of the bars.

Expected monetary value analysis helps in finding which is riskier by comparing two different scenarios. For example is it worth to buy equipment or build on your own. The calculation is based on initial investment, probability and impact. The higher the value better is the option.

Modeling and simulation technique uses Monte Carlo simulation analysis by choosing the random values for each iteration and provides what should be the contingencies for every risk.

Quantitative Risk Analysis and Modeling Techniques is used under the process Perform Quantitative Risk Analysis.