What quantitative risk analysis technique is used to select the optimum course of action from a number of alternatives?

The correct answer is C. Decision tree analysis. Decision tree analysis is the quantitative risk technique specifically designed to evaluate competing alternatives under uncertainty by mapping outcomes, probabilities, and expected monetary values (EMV) for each path. It directly supports selecting the optimum course of action.

Predictive, Plan-Based Methodologies

Question

What quantitative risk analysis technique is used to select the optimum course of action from a number of alternatives?

Options

ASensitivity analysis
BSimulation
CDecision tree analysis
DInfluence diagram

How the community answered

(27 responses)

B
7% (2)
C
89% (24)
D
4% (1)

Explanation

Decision tree analysis is the quantitative risk technique specifically designed to evaluate competing alternatives under uncertainty by mapping outcomes, probabilities, and expected monetary values (EMV) for each path. It directly supports selecting the optimum course of action. Sensitivity analysis (A) identifies which risks most impact project objectives but does not compare alternatives. Simulation/Monte Carlo (B) models overall project uncertainty but does not compare discrete alternatives. Influence diagrams (D) are graphical tools showing causal relationships, not decision-optimization tools.

Topics

#Quantitative Risk Analysis#Decision Tree Analysis#Risk Management#Expected Monetary Value (EMV)

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