Medium Effort Methods

The cost-benefit analysis is about comparing the costs and benefits of a project or a major activity and using this comparison as a basis for decision-making for the implementation of the project/activity. The costs and benefits are in most cases described in monetary terms to allow comparison. However, it is sometimes difficult to express welfare gains, for example, as a monetary unit. If at the end of the analysis the benefit is higher than the total cost, a project/activity should be implemented. Experience and expected values are used to determine costs and benefits in advance.

The Monte Carlo simulation is one of the stochastic simulation methods in which random numbers are used within certain ranges for the calculation of the scenarios. To estimate risks or decisions under uncertainty, stochastic and dynamic methods are almost exclusively used today. With the help of Monte Carlo simulation, the impact of different decisions and their probability of occurrence can be estimated using synthetic data. It is a calculation method to simulate extreme cases, but also to secure everyday decisions. This makes it usable for a wide variety of industries.

Event Tree Analysis (ETA) is a method that examines the consequences of a particular event. Starting from an initial event, the tree is divided into two branches, whereby the upper one represents a positive and the lower one a negative development (event trees are usually drawn from left to right). Repeated branching of the tree shows possible effects of an initial event on a system. The aim of ETA is the identification of possible damage events.