Risk Analysis in the Evaluation of Plant Investments: The Contribution of a Non-Deterministic Approach

Abstract

This paper discusses the application of risk analysis techniques to a feasibility study for a chemical additives production plant in Saudi Arabia. The ordinary estimation techniques, which indicate utilization of resources, future cost trends, and operating profit forecasts, are supported by a risk analysis model that is used to evaluate the variability of analyzed targets based on the definition of different scenarios. Project investors can use this tool during the decisional phase to minimize the risks related to project results.

Keywords

risk analysis stochastic approach uncertainty forecast

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