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Why ENCE 627

Today’s project manager cannot deliver on time, within budget, and also fulfill complex deliverable requirements without understanding and proactively managing risks. This course provides the insight, tools, and practical know-how for identifying project risks, quantitatively analyzing their importance to project success, and developing management plans. This is a quantitative course which provides the student a foundation in modern analytical methods and techniques.

Note: This course requires a previous course in probability and statistics to receive permission from the department to take it.

ProfessorGregory Baecher, PhDGregory Baecher, PhDStats Credits 3 Offered* Spring On-Campus, Fall Online


Metrics measurement

The mathematics of measurement are fundamental to quantifying data and uncertainties, and that’s need to be well understood.

Risk register or inventory

The risk register as a central repository for all risk identified by the organization and that includes information such as the source of the risk, its nature, how would might be mitigated, and who is responsible for monitoring it.

Decision theory

As we begin to quantify risk, the next question is how to make decisions on the basis of uncertain information. That’s the essence of statistical decision theory.

Project selection risks

How do we decide to take on certain projects? As everything else, this is a question of making decisions in the face of uncertainty.

Utility theory and risk aversion

It is straightforward to make decisions on the basis of expectations, but that’s not the way real people behave. Most of us are risk-averse. That is, we are willing to sacrifice some amount of expected return in order to reduce uncertainty. Utility theory provides a basis for doing so.

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Offered: Spring On-Campus, Fall Online*
Week 1Introduction
  • measurement
  • uncertainty
  • risk
Week 2Risk register
  • qualitative uncertainty
  • mitigation
Week 3Quantitative uncertainty
  • Probability theory
Week 4Quantitative uncertainty
  • Probability models
Week 5Cost and schedule uncertainty, mitigation Week 6Monte Carlo theoryWeek 7Monte Carlo practice Week 8Decision theory I Week 9Judgmental probability Week 10Utility theory and risk aversionWeek 11Decision theory II Week 12Bidding and negotiationWeek 13Risk transfer via insurance and contracts Week 14Reinsurance and financial instruments

*All course content, including schedule, topics, and books are subject to change semester-to-semester. Course costs are dependent on students' individual situations, including but not limited to, online vs on-campus enrollment, in-state vs out-of-state enrollment, and scholarships. Not all books on this page may be required readings and additional readings may be assigned. Please check the UMD Schedule of Classes for most up to date semester offerings. Instructors give students specific semester details once they are enrolled.