Posted by Global Economy – Global Risk
Risk Track
Downloadable Files:
RISK-1 Cullis Paper Global_Economy_Global_Risk-final
Abstract:
As we progress towards an increasingly global economy, proposals are more and more frequently priced in multiple currencies. Exchange rates are not only difficult to predict, the risk associated with these predictions compounds the further into the future the predictions are made. In a recent proposal assessed by the authors, ~1/3 of the total proposed price was initially estimated in pounds (£, GBP.) The proposal team then used projected foreign exchange rates (a single point estimate per year of the period of performance) to determine the price in dollars. The authors built a model that uses historical currency variance, Monte Carlo simulation, and a normal distribution in order to quantify the risk associated with the estimate. This model can be used to quantify the risk for any estimate converting from any currency to any other currency, provided the projected rates for the period of performance are known.
Author(s):
Bethia Cullis
Bethia Cullis is an Operations Research Analyst at Northrop Grumman. She is currently the Program Manager support to all Independent Cost Evaluations (ICEs) and Proposal Support activities requested to her department by Northrop Grumman. In addition to her ICE work, Ms. Cullis has supported numerous ship programs including DD(X), the DDG 51 class, LHD 8 and LHA 6, the LPD 17 class and CVN 21. Before joining Northrop Grumman in 2004, Ms. Cullis was employed as an analyst by Newry Corporation, a competitive consulting firm in Cleveland. She completed her undergraduate degree in Economics and English at Case Western Reserve University.
Chris Leonetti
Chris Leonetti is an Operations Research Analyst for Northrop Grumman. He currently performs cost and risk analysis on several programs within the Intelligence Community. Prior to his work with the IC, Mr. Leonetti was a member of the TASC cost team for the United States Navy’s DDG-1000 and CG(X) programs. Mr. Leonetti also works on Independent Cost Evaluation (ICE) teams doing internal risk assessments. Mr. Leonetti received his B.S. from the College of William & Mary in Applied Mathematics with a second major in Government in May 2004 and his M.S. in Computational Operations Research in December 2005.
Eric Druker
Eric Druker graduated from the College of William and Mary with a B.S. in Applied Mathematics in 2005 concentrating in both Operations Research and Probability & Statistics and a minor in Economics. Over the past two years he has been employed by Northrop Grumman as an Operations Research Analyst. He performs cost and risk analysis on several programs within both the Intelligence and DoD communities. Mr. Druker has also worked on high profile projects such as the Virginia Information Technology Agency and the United States Army Corps of Engineers (USACE) proposals. He was a recipient of the 2005 Northrop Grumman (IT) President’s award for his work on several high profile Independent Cost Evaluations during which he helped to develop the risk process currently used by Northrop Grumman (IT)’s ICE teams. He has also performed decision tree analysis for Northrop Grumman Corporate law and built models for Hurricane Katrina Impact Studies and Schedule/Cost Growth determination.
Crystal Hauser
Crystal Hauser is an Operations Research Analyst at Northrop Grumman. Since joining Northrop Grumman in 2005, she has provided cost and risk analysis support for several programs within both the Intelligence and DoD communities. Ms. Hauser currently serves in a leadership position within her IC cost work. Prior to her work with the IC, Ms. Hauser was the TASC cost team lead for the United States Navy’s DDG-1000 and CG(X) programs. Ms. Hauser also serves as a lead on Independent Cost Evaluation (ICE) teams providing internal risk assessments for Northrop Grumman. Ms. Hauser received her B.S. in Industrial and Systems Engineering from Virginia Polytechnic Institute and State University. She also participated in a dual Master’s degree program with Virginia Polytechnic Institute and State University and Ecole des Mines de Nantes in Nantes, France (M.S. Industrial and Systems Engineering and Diplôme de Formation Spécialisée, Génie des Systèmes Industriels).