Expected Loss

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Expected Loss

Post by kp56 »

In RiskyProject Expected loss is calculated parameter. Could you please explain the calculating algorithm?
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Re: Expected Loss

Post by Intaver Support »

Expected cost of risk is calculated based on formula:
(Mean cost of project - Original (deterministic) cost of project) * cost correlation coefficient of this risk
It means that expected cost is this is a contribution of each risk to total cost increase of project. Interestingly that the mean cost of task, where this risk is assigned, is not in this formula directly. It is a correlation, which is used. The correlation coefficient is calculated based on total project cost and cost increase due to risk.
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Intaver Institute Inc.
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