Thursday, December 8, 2022 with Scott Ferson and Nick Gray (8:30AM-5:30PM)
This full-day workshop features hands-on examples worked in R or Python (whichever you prefer) on your own laptap, from raw data to final decision. The workshop introduces and compares Monte Carlo simulation and probability bounds analysis for developing probabilistic risk analyses when little or no empirical data are available. You can use your laptop to work the examples, or just follow along if you prefer. The examples illustrate the basic problems risk analysts face: not having much data to estimate inputs, not knowing the distribution shapes, not knowing their correlations, and not even being sure about the model form. Monte Carlo models will be parameterized using the method of matching moments and other common strategies. Probability bounds will be developed from both large and small data sets, from data with non-negligible measurement uncertainty, and from published summaries that lack data altogether. The workshop explains how to avoid common pitfalls in risk analyses, including the multiple instantiation problem, unjustified independence assumptions, repeated variable problem, and what to do when there’s little or no data.
The numerical examples will be developed into fully probabilistic estimates useful for quantitative decisions and other risk-informed planning. Emphasis will be placed on the interpretation of results and on how defensible decisions can be made even when little information is available. The presentation style will be casual and interactive. Participants will receive handouts of the slides and electronic files with software for the examples.