The integrated process of project risk management based on influence diagrams

Abstract

We show how to apply influence diagrams theory to the whole process of the project risk management, which including risk identification, risk assessment, risk control and risk documentation. First, we propose a frame to construct a graphical risk influence diagram and two ways to construct the functional and numerical risk influence diagram efficiently. Next, we summarize two ways to calculate the risk probability and the project expectation value. Thirdly, we argue to utilize the value of perfect control and value of perfect information to control the project risk. Last, the project risk influence diagram is used as a framework to document the project risk.