MONTE CARLO ANALYSIS TO MANAGE RISKS AND IMPROVE CIP PLANNING AND BUDGETING

Matthew P. Smith; Jag Salgaonkar; David K. May; Hans J. Gaus

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MONTE CARLO ANALYSIS TO MANAGE RISKS AND IMPROVE CIP PLANNING AND BUDGETING

Abstract

Overview As part of the fiscal year (FY) 2005/2006 budgeting effort, Orange County Sanitation District (OCSD) incorporated the use of a Monte Carlo analysis. The analysis is the final step of a structured effort by OCSD to assess risk events and their associated impacts, and the likely budget amounts for risk. The carefully structured effort resulted in a 3 percent budget increase or approximately $66 million, raising the $2.371 billion program to a total of $2.437 billion. The determination of how to budget to cover the cost of risk impacts is a direct output of the Monte Carlo analysis.

Overview As part of the fiscal year (FY) 2005/2006 budgeting effort, Orange County Sanitation District (OCSD) incorporated the use of a Monte Carlo analysis. The analysis is the final step of a structured effort by OCSD to assess risk events and their associated impacts, and the likely budget amounts for risk. The carefully structured effort resulted in a 3 percent budget increase or approximately...

Author(s)

Matthew P. SmithJag SalgaonkarDavid K. MayHans J. Gaus

SourceProceedings of the Water Environment Federation

SubjectSession TUE6: Risk Management: A Roll of the Dice or Good Planning?

Document typeConference Paper

PublisherWater Environment Federation

Print publication date Jan, 2006

ISSN1938-6478

SICI1938-6478(20060101)2006:1L.502;1-

DOI10.2175/193864706783789833

Volume / Issue2006 / 1

Content sourceUtility Management Conference