Methods for innovation projects risk evaluation

Sipos, Gabriela Lucia and Ciurea, Jeanina Biliana (2008): Methods for innovation projects risk evaluation. Published in: Book of Proceedings of the May Conference on Strategic Management (June 2008): pp. 82-90.

Abstract

Starting an innovation project assumes to state some competitive objectives referring to the allocated budget, time limit for project’s ending and also to the quality and performance parameters of the new obtained product. Referring to the innovation project development, the risk of unfulfilling the stated competitive objectives referrers to the exceeding the project’s budget and terms, and also to unfitting in the quality and performance parameters established in the innovation project planning stage. The large diversity of risk sources can be expressed by the possibility of appearance of some unexpected variations of the cost, time and quality of the new products. The innovation projects risk is settled by the variations of the cost, time and quality objectives effective values comparing to the planned values. Those variations are determined by purely random factors. The innovation projects characterized by uniform variations of the cost, time and quality objectives effective values around the mean are considered to be under statistic control. Those projects’ risk may be quantified and the risk impact over the project can be limited. The innovation projects characterized by fluctuant variations of the cost, time and quality objectives effective values around the mean are considered to be out of statistic control. The aim of this paper is to present two categories of statistic methods for innovation projects risk quantifying. The first statistic methods that quantify the risk of unfitting the quantitative objectives referrers to the time risk, cost risk and the risk of unfitting established performance parameters. The second category of methods represents statistic methods that quantify the risk of unfitting the qualitative objectives of the projects – the risk of appearance major quality deficiencies.

• Item Type: MPRA Paper
• Language: English
• Keywords: innovation project, risk evaluation, cost, time and quality objectives
• Subjects: O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development > O32 - Management of Technological Innovation and R&D; G - Financial Economics > G3 - Corporate Finance and Governance > G32 - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure

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