Value of Control

This skill module introduces value of control and covers the following topics:

• Decision Trees – Expanded: Decision trees are the most recognizable feature of decision analysis. So, many people think these are synonymous.
• Value of Control I: Investing to reduce project and operations risk are typical value of control (VOC) problems. Improving "control" means taking action to improve the probability and/or outcomes of a chance event.
• Value of Control II: An oil tanker has a heightened risk of collision accidents and oil spills if it loses its steering or propulsion power system. This exercise is to develop a decision model to decide whether to spend additional money on maintaining the tanker's steering and propulsion systems.

See example online learning module

Target Audience

Geologists, engineers, geophysicists, managers, team leaders, economists, and planners

You Will Learn

• To properly sequence decision tree nodes
• To back-solve the decision tree for node-branch expected values
• When it is okay to put costs and benefits on branches when realizing those values
• Exercise: Plant expansion decision
• Low- to moderate-cost software tools
• Advantages and disadvantages of decision trees compared to Monte Carlo simulation
• The distinction between threats and opportunities in project management terminology
• About the risk matrix (useful to illustrate the VOC concept, though not recommended for decision making)
• To set up and solve a decision tree to evaluate the value of a control-adding alternative
• How to apply Monte Carlo to optimize one or multiple control decision variables
• To calculate the expected value (EV) cost of an accident
• How to set up a decision tree to evaluate the EV cost of an accident vs amount spent on maintenance
• Calculate the EV cost of an accident with Low Maintenance plus Insurance

Product Details