Quantifying Risk In Waterfall Methodology: Case Study At Aplikasi Super

In this paper, we presented a very simple mathematical model based on Dynamic Programming to answer one of the biggest concerns in Waterfall methodology, namely, quantifying risk. Our approach essentially resembles Elmaghraby (2005), but we have more stages and use uniform distributions. With this approach, we can show and quantify the risk in Waterfall methodology so that the decision-maker can understand the implications of his decision. Dynamic Programming solutions also provide a blueprint for adjusting decisions if the early (previous) stage does not go as planned. A case study at Aplikasi Super with some sensitivity analysis is provided as a numerical illustration.