Epistemic vs. Aleatory uncertainty

Revision as of 21:27, 17 February 2019

Panagiotis Vounatsos - s182563

Abstract

Uncertainty is embedded in many aspects of a project, program and portfolio management. It is present in decision making for project integration and complexity, scope management, schedule management, cost management and risk management as this is mentioned in PMI standards as well as in risk management given in AXELOS project management standards.

Uncertainty derives from not knowing for sure if a statement is true or false. More specifically, it is the absence of information and if put more scientifically, it is the difference between the amount of information required to perform a task and the amount of information already possessed. Uncertainty is considered crucial to be identified and mitigated as it can contribute to severe consequences to the aforementioned aspects of a project, program or portfolio. Depending on the level of the uncertainty and the consequence it may result in jeopardizing the outcome of an action or even of the whole project. It is worth mentioning that uncertainty is not only a part of the project management but also a part of the technical implementation of a project.

The capability to quantify the impact of uncertainty in the decision context is critical. Uncertainty can be divided in several categories but the most dominant ones in uncertainty theory are epistemic and aleatory uncertainty. Epistemic uncertainty derives from the lack of knowledge of a parameter, phenomenon or process, while aleatory uncertainty refers to uncertainty caused by probabilistic variations in a random event. Each of these two different types of uncertainty has its own unique set of characteristics that separates it from the other and can be quantified through different methods. Some of these methods include simulation, statistical analysis or measurements. There is still ongoing research for increasing the accuracy of a result and include more parameters in calculating an outcome.

Uncertainty

What is Uncertainty

In this subsection the

Epistemic vs. Aleatory uncertainty

Uncertainty in Management

References