Risk Management Software: Risk Cost Simulation
RiskDecision allows to conduct a Monte Carlo Simulation in order to determine the Total Cost of Risk. Note that this is a statistical value. However, it provides you with an idea of probable risk costs.
For the future is uncertain and therefore not known, a series of random future situations are simulated and evaluated. These are graphically displayed: the risk cost situation before actions and the reduced risk cost situation after actions.
This graphic is excellent to see the progress in risk management, for it shows the reduction of total risk costs. Next to the graphic you further get the values for uncertainties before and after action plus included action costs. Mean (M) and Standard Deviation (SD) are displayed.
Usually, not all mitigation efforts contribute the same way to risk mitigation. You will find some dominant contributors.
During the Monte-Carlo analysis, RiskDecision keeps track of the Risks/Opportunities which are the primary contributors to the 'mean' cost. These tend to be the elements with high Probability and medium to high Impact. It also keeps track of the Risks/Opportunities which are the primary contributors to the distribution 'peak' (maximum exposure). These tend to be the elements with low Probability but with very high Impact. At the end of the analysis, the major contributors in each group are displayed below the primary Graphs.