SAB7#131 Analysis Quantitative Risk

1. Number of consequences

1. Determine which risk events warrant a response
2. Determine overall project risk (risk exposure)
3. Determine the quantified probability of meeting project objectives
4. Determine cost and schedule reserves
5. Identify risk requiring the most attention
6. Create realistic and achievable cost, schedule, or scope targets

Annotations:

• Sensivity analysis is a technique to analyze and compare the potential impacts of identified risks. A tornado diagram may be used to graphically depict the results of that analysis. Risks are represented horizontal bars: the longets and uppermost bar represents the gratest risk, and progressively shorter horizontal bars beneath represent lower-ranked risks. The resulting graphic resembles a funnel cloud, tornado.

Annotations:

• To evaluate a risk, you can look at the probability or the impact, but calculating the expected monetary value is a better measure to determine an overall ranking of risks. The formula for expected monetary value (EMV) is simply probability (P) times impact (I).