1. Decision Tree

2. Recap

3. Software Engineering II
Lecture 18
Fakhar Lodhi

4. Simple (0.30)
380,000
450,000
275,000
310,000
490,000
210,000
400,000
350,000
500,000
Difficult (0.70)
Build
Minor changes (0.40)
Simple (0.20)
Reuse
Major
changes
(0.60)
Complex (0.80)
Minor changes (0.70)
Buy
Major changes (0.30)
Contract
Without changes (0.80)
With changes (0.20)

5. Decision Tree Analysis
Expected cost
= ∑ (path probability)I x (estimated path cost)
Expected costbuild = 0.30* *450
= 429 K
Reuse = 0.4* *0.2* *0.8*490
= 382 K
Buy = 267 K
Contract = 410 K

6. Risk analysis and management
Risk concerns future happenings. Today and yesterday are beyond active concern. The question is, can we, therefore, by changing our action today create and opportunity for a different and hopefully better situation for ourselves tomorrow. This means, second, that risk involves change, such as changes in mind, opinion, action, or places. … [Third,] risks involves choice, and the uncertainty that choice itself entails.
Robert Charette

7. Risk analysis and management concerns
Future – what risks might cause the project to go awry
Change – what change might cause the risk to strike
How changes in requirements, technology, personnel and other entities connected to the project affect the project
Choice – what options do we have for each risk