Professional Project Analysis: Tools and Techniques for Managing Risk and Uncertainty
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Professional Project Analysis: Tools and Techniques for Managing Risk and Uncertainty Course
Introduction:
Significant investments are necessary for large capital-intensive projects across various industries, involving the acquisition, exploration, operation, and maintenance of new assets. The decision to invest in such projects begins with crucial choices made during the exploration phase of new developments or the expansion of existing fields. Decision-making tools, employed to assess project risks amidst uncertainty, aid companies in determining the likelihood of success or failure, ultimately influencing the decision to proceed with development or abandon the project.
Course Objectives:
By the end of this course, participants will be able to:
- Understand how to manage an organization's investments in large capital-intensive projects
- Identify how to make and understand financial decisions and be able to present these back to the stakeholder community
- Identify how to manage the cash flow of projects and manage and appraise the financial risk mitigation strategies
- Understand proper cash-flow and sensitivity analyses to forecast and control potential future conditions
- Define and manage project success factors and maximize the return on the capital invested in projects
- Understand how to define financial strategies and incorporate these into project risk mitigation strategies
Who Should Attend?
This Project Analysis training course is designed for program and project management professionals, project leaders, project engineers, cost engineers, and other senior project control and business services professionals who are responsible for or involved in evaluating projects and managing cash flow throughout the duration of the project delivery.
Course Outlines:
Fundamentals of Decision Analysis
- What is Project Management Decision Analysis?
- The Purpose of the Project Business Case
- The Need for Systematic Risk Management for Decision-Making
- Risk and Uncertainty on Projects
- Option Analysis
- Identifying Key Decision-making Factors
Measures of Project Profitability
- Fundamental Tools of Engineering Economics
- Time Value of Money
- Appraisal Methods - Discounted Cash Flow Projections
- Time Equivalence
Cash-Flow Modelling and Project Decision Analysis
- Financial Modelling and Project Evaluation
- Rate of Return Computations (IRR)
- Determining the Internal Rate of Return (IRR)
- The Risk of Not Understanding IRR
Analyzing Project Specifics
- Understanding the Project Context to Assist in Decision-making
- Determine Stakeholders and their Level of Influence
- Capture Requirements
- Determine Scope of Work
The Cost of Capital
- Capital & Operating Expenditures (CAPEX / OPEX)
- Estimating the Cost of Capital for a Project
- Benefit-Cost Ratio (BCR)
- Dis-benefits
Risk Modelling in Practice
- Identify Risks
- Forecasting Risk Impacts & Probabilities
- Opportunity Costs, Sunk Costs & Salvage Value of a Project
- Determining Risk Priorities
- The Need for Company Cash Flow
Decision Analysis: Expected Value Concept
- Basic Probability Concepts
- Fundamental Probability Concepts
- Mutually & Non-Mutually Exclusive, Independent Events
- Quantitative Project Risk Analysis
- Semi-Quantitative Bow-Tie Process
- Detailed Risk Quantification and Prioritization
- Expected Monetary Value
- Scenario Planning
- Simulation Process
- Tornado Diagram
- Defining the Variables - PERT
- Sensitivity Analysis Tools
Decision Trees, EMV, Risk Responses, and ROI
- Decision Tree Analysis
- Developing Decision Trees
- Solving Decision Trees
- Risk Responses
- Developing Risk Responses
- Evaluating Response Relevance
- Understanding ROI
- Identifying ROI
- Evaluating and Presenting your Project Options
- ROI Analysis