Estimation and evaluation of uncertainty: a minimalist first pass approach

Published on Dec 1, 2000in International Journal of Project Management4.694
· DOI :10.1016/S0263-7863(00)00016-8
Chris Chapman22
Estimated H-index: 22
(University of Southampton),
Stephen Ward22
Estimated H-index: 22
(University of Southampton)
This paper describes an approach to the estimation and evaluation of uncertainty designed for ease of use. It is designed to be easier to use than probability impact grid based approaches, and it links qualitative approaches in this format to quantitative approaches. It is based on a general view of uncertainty which incorporates ambiguity as well as variability and lack of data. A concern for identifying sources of uncertainty is one characteristic of the approach which flows from this perspective. Other characteristics include deliberate conservative bias to counteract persistent underestimation of uncertainty. It is set in the context of an iterative approach to an overall uncertainty management process. The example used to illustrate the approach involves project duration and cost estimation for bidding purposes.
  • References (14)
  • Citations (61)
📖 Papers frequently viewed together
389 Citations
5,383 Citations
225 Citations
78% of Scinapse members use related papers. After signing in, all features are FREE.
#1Chris Chapman (University of Southampton)H-Index: 22
#2Stephen Ward (University of Southampton)H-Index: 22
Last. Julia A. Bennell (University of Southampton)H-Index: 18
view all 3 authors...
This paper describes a simple, transparent approach for developing competitive bids, based on an appreciation of cost uncertainty and estimates of the probability of winning with different levels of bid. The process offers an ‘applied’ approach which facilitates an iterative approach to bid development and appropriate consideration of important qualitative factors which are difficult to model. The process is illustrated with a case example which has been well received by practitioners as a teach...
48 CitationsSource
Abstract A common problem in project risk management processes is the need to determine the relative significance of different sources of risk so as to guide subsequent risk management effort and ensure it remains cost effective. A common approach is to rank risks in terms of probability and impact to identify sources of risk which will receive the most attention. This paper examines the shortcomings of this technique in guiding the analysis and management of risks and considers the information ...
109 CitationsSource
This paper provides an overview of a project risk management process developed by a working party of the Association of Project Managers. It is a synthesis of methods developed by a number of individuals and organizations over an extended period. All aspects of it have been tested and developed in the context of successful practice (and difficulties associated with achieving success). The process of synthesis has provided a number of new insights. These include: a more detailed phase structure b...
144 CitationsSource
#1J. U. M. SmithH-Index: 2
515 Citations
This paper outlines a personal view of the OR method. It incorporates scientific methods and systems methods as appropriate, operating in a set of close, linked, parallel, description-to-implementation dimensions. It argues that effective and efficient use of this method requires attention to orthogonal situation-specific and model-specific dimensions. It suggests several other dimensions which may be of value. Its basis is largely experience as a consultant working within the situation- and mod...
24 CitationsSource
#1Stephen Ward (University of Southampton)H-Index: 22
#2Chris Chapman (University of Southampton)H-Index: 22
This paper considers information requirements for the development of a bid price in a generalized competitive-bidding situation. A framework for the bid-preparation process is described. The framework outlines the steps required to combine various types of information to produce a bid price. Particular emphasis is placed on information about competitors, criteria to be used by a contract buyer, and the buyer's method of evaluating bids. The framework incorporates the ‘maximization of expected pr...
30 CitationsSource
#1P. ClarkH-Index: 1
#2Chris Chapman (University of Southampton)H-Index: 22
Abstract Over the past eight years the Projects Department of BP's Group Engineering and Technical Centre has evolved a risk analysis methodology which is applied during the project appraisal phase to all major engineering construction projects. The computational methods in current use are based on the Common Interval and Memory (CIM) approach, which allows the direct enumeration of distribution combinations rather than the more common Monte Carlo simulation approach. Computer software has been ...
6 CitationsSource
#1Colin M. SorrillH-Index: 1
Introduction to Risk Analysis Basic Approaches to Risk Analysis CIM Models for Independent Risks Case Study: Reliability Analysis of an LNG Facility Case Study: Choosing a River Crossing Method Eliciting Subjective Probabilities for Risk Analysis CIM Models for Dependent Risks Case Study: Project Costs Case Study: Construction Cost Estimate and Contingency CIM Models for Structural Dependence CIM Models for Processes through Time Economic Risk Evaluation for Large Projects Some More General Refl...
92 Citations
#1Chris Chapman (University of Southampton)H-Index: 22
#2Dale F. Cooper (University of Southampton)H-Index: 9
Risk engineering models for decision making under uncertainty are illustrated by a succession of increasingly complex example applications. The approach is based upon simple arithmetic procedures which are easy to understand and use. Offshore North Sea projects are the basis for the example applications, but the approach has been used in a range of problem environments in the U.K., Canada and U.S.A. The emphasis is a flexible structure for viewing problems which allows modelling at a level of de...
32 CitationsSource
Describes the current status of SCERT (synergistic contingency evaluation and response techniques). SCERT is an attempt to provide a systematic approach to the planning and financial evaluation of large engineering projects involving significant risks. Its mathematical basis is a decision tree/semi-Markov process representation of a project. This basis is integrated with qualitative risk assessment procedures. The emphasis is preplanning positive responses to potential contingencies, the need to...
46 CitationsSource
Cited By61
#1Zachary A. CollierH-Index: 13
#2James H. Lambert (UVA: University of Virginia)H-Index: 31
Models, being incomplete and simplified representations of complex, real-world systems, contain simplifications and abstractions. However, models with errors or incorrect assumptions can suggest misleading results from the perspective of the decision-maker. Model risk arises from errors within models, or the incorrect use of models, and if undetected, can have significant impacts on businesses and organizations whose decisions and business processes depend on the model outputs. Thus, there is a ...
1 CitationsSource
#1Aitor Couce-Vieira (CSIC: Spanish National Research Council)H-Index: 1
#2David Ríos Insua (CSIC: Spanish National Research Council)H-Index: 5
Last. Siv Hilde HoumbH-Index: 1
view all 3 authors...
AbstractMost existing risk analysis methods focus on analysing risks that a system might face throughout its life. However, there is no explicit method for risk analysis during incidents. Approaches such as bow-ties and attack trees provide reliable information about triggers and escalation of incidents, but do not cover risk evaluation. Risk matrices include the entire risk analysis process; however, their risk evaluation approach is oversimplified. This paper presents a General Model for Incid...
1 CitationsSource
#1Yong Zhong (ECUST: East China University of Science and Technology)
#2Zhigao Chen (ECUST: East China University of Science and Technology)
Last. Haibo Hu (ECUST: East China University of Science and Technology)
view all 4 authors...
AbstractThe premise of dealing with uncertainty in this article is to figure out the impact of uncertainties on project performance. This article proposes a framework for quantitative analysis that combines a fuzzy mathematics approach with system dynamics theory. Simulations generated using a model based on the framework show that uncertainties affect project performance by changing project parameters, and the mechanisms involved depend on the sources of the uncertainties. Furthermore, while te...
#1Salim Rostami (Katholieke Universiteit Leuven)H-Index: 3
#2Stefan Creemers (Katholieke Universiteit Leuven)H-Index: 10
Last. Roel Leus (Katholieke Universiteit Leuven)H-Index: 24
view all 3 authors...
We study the stochastic resource-constrained project scheduling problem or SRCPSP, where project activities have stochastic durations. A solution is a scheduling policy, and we propose a new class of policies that is a generalization of most of the classes described in the literature. A policy in this new class makes a number of a priori decisions in a preprocessing phase, while the remaining scheduling decisions are made online. A two-phase local search algorithm is proposed to optimize within ...
19 CitationsSource
#1Tony MernaH-Index: 7
#2Faisal AL-ThaniH-Index: 3
#1Luz Stella Cardona-Meza (National University of Colombia)H-Index: 1
#2Gerard Olivar-Tost (National University of Colombia)H-Index: 7
Discussion about project management, in both the academic literature and industry, is predominantly based on theories of control, many of which have been developed since the 1950s. However, issues arise when these ideas are applied unilaterally to all types of projects and in all contexts. In complex environments, management problems arise from assuming that results, predicted at the start of a project, can be sufficiently described and delivered as planned. Thus, once a project reaches a critic...
2 CitationsSource
#1Milind PadalkarH-Index: 2
#2Saji Gopinath (Indian Institute of Management Kozhikode)H-Index: 3
Abstract Project management as a discipline possesses a rich body of literature characterized by early determinism and later expansion to broader contexts aided by paradigmatic, thematic, and methodological diversity. The dynamic nature of research entails many parallel streams of enquiry under differing perspectives without convergence to parsimonious theories. We argue that an integrated view of project management research in terms of its thematic evolution and trends is necessary for an under...
26 CitationsSource
#1Fiona C. Saunders (University of Manchester)H-Index: 7
#2Andrew H. Sherry (University of Manchester)H-Index: 14
Last. Andrew W Gale (University of Manchester)H-Index: 18
view all 3 authors...
Uncertainty is a fact of project life. Most decisions that are made on a safety-critical project involve uncertainty, the consequences of which may be highly significant to the safe and timely delivery of the project. Based on interviews with project management practitioners on nine large-scale civil nuclear and aerospace projects, we explore how uncertainty emerges, and how project management practitioners identify, analyse and act on it. We make three important contributions. First, we present...
2 CitationsSource
#1David J. LairdH-Index: 1
While extensive empirical research has been conducted in the past to assess the value of project management and planning on large projects and to evaluate the impact of critical success factors (CSFs) and other organizational factors, little research is available on the techniques and factors used on small IT projects, and their influence on project success. This dissertation presents a research study which tests the relationship between the type and level of project planning performed on small ...
1 Citations
#1Milind Padalkar (Indian Institute of Management Kozhikode)H-Index: 2
#2Saji Gopinath (Indian Institute of Management Kozhikode)H-Index: 3
Abstract Project management research is characterized by dominance of determinism, decision-theoretic approaches, and weak theories. The growth of research interest in non-deterministic paradigms through the lenses of complexity and uncertainty is recent, and could provide stronger theoretic explanations. However, analysis of select project management literature reveals that the constructs of complexity and uncertainty are yet to be grounded in terms of definitions and constituent variables. We ...
21 CitationsSource