Carnegie Mellon University

Risk Analytics

Course Number: 45863

In today's world, executives must make decisions under very high degrees of uncertainty. Whether these decisions concern forecasting, capacity and supply chain planning, or financial analyses of complex financial instruments, first understanding, then modeling and finally mitigating risk is crucial to the competitiveness of the firm. Hence, risk management becomes every executive's business; for some it even becomes a C-level career evidenced by the advent of the chief risk officer (CSO). This course will help you to understand the basic methods and tools in this fast growing area.

The course is a hands-on course on computer simulation of business systems that are subject to uncertainty or risk. It takes the perspective of the consultant who needs to analyze an uncertain world by building a simulation model and using it to understand the behavior of the system and explore the effects of alternative decisions. Upon completion of the course you will be able to develop integrated solutions to system-level problems by carrying out the entire process of designing a simulation model, implementing it in the appropriate software, executing the simulation, collecting and analyzing output data, and using the results of the analysis to evaluate alternative decisions. From an executive perspective, you will be able to comprehend uncertainty analyses presented to you and to challenge and pressure-test assumptions prior to making a decision. No prior knowledge of simulation is required. The only background assumed is some basic knowledge of statistics and probability. We will review these basic skills in the first week to bring everybody to the same level.

In this course, you will learn to solve real problems facing Fortune 500 corporations using simulation. Several of them are sales forecasting, drug licensing, investment and portfolio decisions, capital budgeting, new business planning, technology selection, and financial hedging. This will be a fun course and the tools you will learn in this class will help you further improve your current skill set and marketability. (4/13)

Degree: MBA
Concentration: Operations Management
Academic Year: 2022-2023
Semester(s): Mini 1
Required/Elective: Elective
Units: 6
Prerequisite(s): 45860


Lecture: 100min/wk and Recitation: 50min/wk