Formal Risk Analysis and Decision Theory Principles are being utilized in daily operational decisions. A PC and Macintoch software program has been developed to minimize the effort and time required for this type of analysis. The process encourages structured thinking and the documentation of the justification and assumptions used in making decisions. This approach is not designed to replace the intuitive approach to decision making but rather to augment it.

The results of the project are encouraging. This methodology is being used more often by a larger group of decision makers. Communication between project team members has been improved as the common language of probability and cost is more frequently used when discussing alternatives. The emphasis of the project is to convince potential users that problem structure and the correct layout of alternatives is the single most important component of the process.

Keywords:
decision node, chance factor, software, total probability, practical implementation, risk assessment, risk analysis, decision tree, decision maker, risk and uncertainty assessment
Subjects:
Risk Management and Decision-Making, Information Management and Systems, Risk, uncertainty, and risk assessment, Decision-making processes
Copyright 1994, Society of Petroleum Engineers
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