Risk Assessment of Space Mining Ventures Using Decision Modeling and Monte Carlo Simulation Michael Roy Jude
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University of North Dakota UND Scholarly Commons Theses and Dissertations Theses, Dissertations, and Senior Projects January 2018 Risk Assessment Of Space Mining Ventures Using Decision Modeling And Monte Carlo Simulation Michael Roy Jude Follow this and additional works at: https://commons.und.edu/theses Recommended Citation Jude, Michael Roy, "Risk Assessment Of Space Mining Ventures Using Decision Modeling And Monte Carlo Simulation" (2018). Theses and Dissertations. 2246. https://commons.und.edu/theses/2246 This Thesis is brought to you for free and open access by the Theses, Dissertations, and Senior Projects at UND Scholarly Commons. It has been accepted for inclusion in Theses and Dissertations by an authorized administrator of UND Scholarly Commons. For more information, please contact [email protected]. RISK ASSESSMENT OF SPACE MINING VENTURES USING DECISION MODELING AND MONTE CARLO SIMULATION by Michael R. Jude Bachelor of Science, Electrical Engineering, University of Colorado, 1976 Master of Engineering Management, University of Colorado, 1990 Ph.D., Decision Support, Walden University, 2000 A Thesis Submitted to the Graduate Faculty of the University of North Dakota in partial fulfillment of the requirements for the degree of Master of Science in Space Studies Grand Forks, North Dakota May 2018 Copyright 2018 Michael R. Jude iii This thesis, submitted by Michael R. Jude in partial fulfillment of the requirements for the Degree of Master of Science from the University of North Dakota, has been read by the Faculty Advisory Committee under whom the work has been done and is hereby approved. _______________________________________ Name of Chairperson _______________________________________ Name of Committee Member _______________________________________ Name of Committee Member This thesis is being submitted by the appointed advisory committee as having met all of the requirements of the School of Graduate Studies at the University of North Dakota and is hereby approved. ____________________________________ Grant McGimpsey Dean of the School of Graduate Studies ____________________________________ Date iv PERMISSION Title Risk Assessment of Space Mining Ventures using Decision Modeling and Monte Carlo Simulation Department Space Studies Degree Master of Science In presenting this thesis in partial fulfillment of the requirements for a graduate degree from the University of North Dakota, I agree that the library of this University shall make it freely available for inspection. I further agree that permission for extensive copying for scholarly purposes may be granted by the professor who supervised my thesis work or, in his absence, by the Chairperson of the department or the dean of the School of Graduate Studies. It is understood that any copying or publication or other use of this thesis or part thereof for financial gain shall not be allowed without my written permission. It is also understood that due recognition shall be given to me and to the University of North Dakota in any scholarly use which may be made of any material in my thesis. Michael R. Jude April 20, 2018 v TABLE OF CONTENTS LIST OF FIGURES ...................................................................................................................... viii LIST OF TABLES .......................................................................................................................... ix ACKNOWLEDGMENTS ............................................................................................................... x ABSTRACT .................................................................................................................................... xi CHAPTER 1: INTRODUCTION TO THE STUDY ..................................................................... 13 Introduction ................................................................................................................................ 13 Problem Statement ..................................................................................................................... 16 Background ................................................................................................................................ 17 Significance ............................................................................................................................... 19 Nature of Study .......................................................................................................................... 20 Research Questions .................................................................................................................... 22 Assumptions and Limitations .................................................................................................... 23 CHAPTER 2: LITERATURE REVIEW ....................................................................................... 26 Introduction ................................................................................................................................ 26 Risk in the Context of Space Mining ......................................................................................... 27 Risk and Revenue .................................................................................................................. 34 Risk and Initial Capitalization ............................................................................................... 35 Risk and the Uncertainty of Project Externalities ...................................................................... 38 Assessing Risk Using Statistical Analysis ................................................................................. 40 Conclusions ................................................................................................................................ 45 CHAPTER 3: METHODOLOGY ................................................................................................. 47 Introduction ................................................................................................................................ 47 Qualitative Quasi-Deductive Research ...................................................................................... 48 Mission Profile ........................................................................................................................... 49 vi Building the Initial Financial Model .......................................................................................... 51 Validation of Variables .............................................................................................................. 54 Protection of Human Subjects ................................................................................................... 56 Decision Modeling ..................................................................................................................... 57 Monte Carlo Simulation ............................................................................................................. 60 Conclusions ................................................................................................................................ 63 CHAPTER 4: ANALYSIS ............................................................................................................ 65 Assessing the Hypotheses .......................................................................................................... 77 CHAPTER 5: CONCLUSIONS .................................................................................................... 80 Recommendations for Further Research .................................................................................... 83 REFERENCES: ............................................................................................................................. 85 APPENDIX A: SURVEY INSTRUMENT .................................................................................. 96 APPENDIX B: INFORMED CONSENT FORM ....................................................................... 100 APPENDIX C: ANDREWS ET AL. (2015) BUSINESS CASE ............................................... 102 APPENDIX D: DECISION MODEL DETAIL........................................................................... 103 GLOSSARY OF ACRONYMS ................................................................................................... 110 vii LIST OF FIGURES Figure 1. Control Chart (Microsoft Word Graphic) ....................................................................... 42 Figure 2. Fishbone Diagram (Microsoft Word Graphic) ............................................................... 43 Figure 3. Decision Model .............................................................................................................. 53 Figure 4: Variable Representation ................................................................................................. 58 Figure 5: Gaussian Distribution Offset ........................................................................................... 59 Figure 6: Tornado Diagram Example ............................................................................................ 61 Figure 7: DPL Model Example ...................................................................................................... 66 Figure 8: Base Case Tornado Diagram .......................................................................................... 71 Figure 9: Reduced Variable Tornado Base Case ..........................................................................