Please enable JavaScript.
Coggle requires JavaScript to display documents.
Ch 9 Uncertainty - Coggle Diagram
Ch 9 Uncertainty
Dealing with Uncertainty
Uncertainty has been the underlying condition responible for the evolving structure of human organization throughout history
-
-
-
Lessons:
-
When you develop a forecast, don’t get overconfident in your analysis – lots of different outcomes are possible, you cannot be sure you’re considering every possibility
-
Network Analysis
Using arrow diagrams, network analysis finds a critical path that determines the least amount of time for project completion
The crucial aspect of network analysis is identifying those activities that must be completed before some other activity or activities can start
-
-
Expected Value Technique
Expected value analysis is a technique that Estimates the costs or revenues based on the likelihood of each possible outcome
- you evaluate possible events that might occur
- Important because you can neither predict outcomes with certainty nor completely control the outcomes
The expected value is an average of the possible outcomes, weighted by their likelihoods
We may not realize the EV for any one investment, but over a period of time we should achieve the expected value on average across all projects
-