Advanced Decision Analysis with Portfolio and Project Modeling - ADA

Discipline: Petroleum Business
Level: Specialized
Instructors who teach this course:
  • Mr. Tim Nieman
  • Mr. John Schuyler


Related courses
Petroleum Project Management: Principles and Practices - PPM
Petroleum Risk and Decision Analysis - PRD
Portfolio Modeling and Management - PMM
About the course Designed For You will learn Course Content
About the course
Quality forecasts and evaluations depend upon well-designed project and portfolio models that are based upon clear decision policy, sound professional judgments, and a good decision process. In this course participants learn to build good models. We use the familiar Microsoft Excel spreadsheet as the platform for project and risk assessment models. Add-in software provides Monte Carlo and decision tree capabilities. The course emphasis is on the evaluation concepts and techniques, rather than particular software programs. One personal computer is provided, at additional cost, for each two participants.
Designed For
Evaluation engineers, analysts, managers, planners, and economists. This course is intended for professionals involved with developing project evaluation, portfolio, and other forecasting and assessment models. Prior background in decision analysis is expected. Before registering, please visit http://www.maxvalue.com/prereq.htm to review course prerequisites and to take a short self-assessment quiz. You may login using 'participant' (no quotes) as both the user ID and password.
You will learn
How To:
  • Frame, build, and evaluate decision models and extract key insights
  • Apply the exponential utility function for risk policy
  • Design investment portfolio optimization models that include constraints, requirements, and typical interrelationships between projects
  • Use decision tree software for value of imperfect information analysis
  • Use Monte Carlo simulation software with optimization
  • Develop quality Excel models for projects and portfolios
Course Content
  • Decision Modeling: application of DA process for modeling; influence diagrams; free cash flow concept; sensitivity analysis; good modeling practices; real options overview
  • Monte Carlo Simulation: prospect risking (similar to play analysis); calculating probabilities and distributions with simulation; modeling and optimizing investment portfolios; valuing added control and flexibility; stopping rules; ways to model correlation
  • Decision Tree Analysis: value of information review; sensitivity analysis; solving with utility for risk aversion
  • Decision Policy: overview of finance theory related to PV discount rate and risk (CAPM, modern portfolio theory); shareholder value model; portfolio optimization to maximize value; efficient frontiers; multi-criteria decisions; risk policy as a utility function; expected utility and certain equivalent; insurance and hedging
  • Implementation: presentation formats; judgments and biases; model-centric enterprise model and balanced scorecard element focusing on shareholder value creation