Cost/Risk Analysis

Costs can be estimated on the basis of previous experience and knowledge of what is required. I think it is not unreasonable in any project undertaking to plan on at least a fifty percent cost overrun in the long term, and such cost overruns should be calculated into any budget proposal associated with a project. Coffee costs and in some contexts corruption costs should also be part of one's calculus.

Risk analysis may take many forms. Most important are estimates of risks in terms of physical harm or violence to people or loss of material or information due to unexpected events. It is difficult to plan for the unexpected, but to have emergency plans and backup systems available, as well as anything that might permit on-the-spot repairs.

It is often difficult to estimate potential risks based upon unknown and unforeseeable possibilities. The worst that can happen in any context is not only failure of a project undertaking, but the loss of the means to undertake the project in the first place. Short of this, one should be prepared to handle the worst that can happen in any project undertaking.

Tradeoff Analysis