Risk-Based and Economic-Based Alternative’s Selection (RBEBAS)

Yuri G. Raydugin
Additional contact information
Yuri G. Raydugin: Risk Services & Solutions Inc.

Chapter Chapter 6 in Risk-Based Project Decisions in Situations of High Complexity and Deep Uncertainty, 2024, pp 171-186 from Springer

Abstract: Abstract This chapter is devoted to selection of project alternatives by finding a trade-off between risk exposures and economic benefits of evaluated alternatives. The selection bridges the gap between project business case and development of project scope that answers the business case. (It is presumed that the business case is robust enough to adequately answer the predicted project external environment.) The risk-based and economic-based alternative’s selection (RBEBAS) methodology has three components in its PRM system: framework, process and tools. The RBEBAS process includes steps to generate viable project alternatives, differentiate them regarding their risk exposures, shortlist alternatives that meet risk exposure criteria and select an alternative from the shortlisted with the best economic benefits. Game theory is drawn to clearly formulate decision-making criteria: minimax (minimization of maximum risk exposure) and maximin (maximization of minimal economic benefits). A requirement of one additional selection criterion is hinted—flexibility constraint—that allows avoid locking in any alternative if the external environment substantially changes in future. Implications of this as a part of transition to monitor-and-adopt decision-making are fathomed in consecutive chapters. A simplistic RBEBAS business case is reviewed that is built on three generic business risks used as alternative’s differentiators.

Keywords: Risk-based and economic-based alternative’s selection (RBEBAS); Alternative’s generation; Risk exposure; Project cashflow; Decision tree; Risk differentiator; Minimax criterion; Maximin criterion; Flexibility constraint (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-031-56988-3_6

Ordering information: This item can be ordered from
http://www.springer.com/9783031569883

DOI: 10.1007/978-3-031-56988-3_6

Access Statistics for this chapter

More chapters in Springer Books from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().