Discuss the advantages and disadvantages of Monte Carlo analysis in project risk management.
Should Monte Carlo analysis be used in every project? Why or why not?
Advantages=
This can be used for the modeling of non-linear and path-dependent payoff functions which are quite complex in nature
This is less affected by extreme events
Any statistical distribution can be used to simulate the returns
It is quite easy and flexible to use
With the advancement in computing technology, simulation has become quite easy
Disadvantages-
It needs a lot of computing power to perform all the simulation
There are high cost related to the development of VaR
It is not able to simulate the time-dependent variables
In comparison to the molecular analysis, Monte Carlo method is less effective
Monte Carlo method is mainly used to model the probability of different types of outcome which is not easily predictable because of the interference of random variables. So this method can be used in those projects which are likely to be influenced by any probabilistic problem.
Discuss the advantages and disadvantages of Monte Carlo analysis in project risk management. Should Monte Carlo...
3. Gregg wants to analyze the risk of the project using sensitivity analysis and Monte Carlo simulation. a. Explain to Baldwin Inc. how the two risk analysis models can be used to analyze risk of the project. 4. Gregg has estimated the fixed costs (including depreciation) of the Ohio project to be $1.5 million, sales price is $130, and the variable cost is $70, giving a contribution margin of $60. What is the break-even quantity for this project? 5. Baldwin...
subjuect--project management. discuss the advantages and disadvantages of scope management in a project. Consider what is necessary to maintain clear delineation of a project. answer should be don't less than 150 words
Identify the advantages of Monte Carlo simulation. Also, describe total portfolio management. Any similarities or differences?
Time series models and Monte Carlo simulations are complex but valuable tools in analyzing risk. Define the following terms in relation to Monte Carlo simulations: time series equations, volatility, normal distributions, mean reversion, long-term equilibrium, and Monte Carlo simulation. How do the terms relate to stochastic analysis?
One key distinction between scenario analysis and Monte Carlo simulation is: O Scenario analysis often considers many more scenarios than Monte Carlo simulation O Monte Carlo simulation often considers many more scenarios than scenario analysis Monte Carlo simulation often considers changes in one variable while scenario analysis can consider changing several variables at the same time Scenario analysis often considers changes in one variable while Monte Carlo simulation can consider changing several variables at the same time
discuss the advantages and disadvantages of outsourcing a grants management office
2. Explain the concept of an incremental economic analysis. 3. What economic criterion would you use to choose the best piece of equipment among three alternatives, each with a different operating cost, capital cost, and equipment life? 4. Do you agree with the statement "Monte-Carlo simulation enables the design engi- neer to eliminate risk in economic analysis"? Please explain your answer. 5. In evaluating a large project, what are the advantages and disadvantages of proba- bilistic analysis? 2. Explain the...
Discuss what a break-even analysis is. What are the advantages and disadvantages of this tool? How is it used by managers? How do you see it being used at your organization?
What do you see as the advantages and disadvantages of using project management software such as MS Project to organize a project?
Briefly explain the FOUR project management organization structures, giving advantages and disadvantages.