Question

a Can uncertainty surrounding projects ever be eliminated? Discuss within the context of risk management 2 The project manager can be seen to be in charge 9 risk management on the project but risk management is often seen as the responsibility of everyone involved is the project including project team members, sponsors, key business unit stake holder and the like Identify and describe three ) common techniques used in quantitative risk 1. Descibe the information that you would expect to find 1- in a 'risk register

Answer 1

Answers:

Question: a. Uncertainties can be controlled but never eliminated completely. A project is bound to have some degree of uncertainty and the project planning should incorporate the strategy to deal with any uncertainty if it arises during the project execution phase. Uncertainties can have negative as well as a positive impact, therefore the uncertainty needs to be dealt with the risk management techniques. There are qualitative as well as quantitative approaches to deal with the risk in a project and a project manager should be trained to handle such project related uncertainties.

Question: b.

Question: b.i. Three common quantitative techniques used in risk management are as follows:

a. The expected monetary value of riks: In this method, we try to estimate the probability of the occurrence of an event with risk and its likely impact either cost to project or benefit to project. Then we multiply the probability with the impact amount to estimate the expected monetary value (EMV) of the Risk.

b. Sensitivity Analysis: in this technique, we change a certain parameter to understand the impact of change in the parameter in the outcome. It is like if-then scenario analysis to predict the possible impact of the risk.  

c. Simulation Modelling: This is an advanced method to simulate the scenarios under different types of risk and its likely impact Simulation modeling gives a better idea of the impact of the risk on the project outcome.

Question: b.ii. A risk register is used to maintain all the information about the risk. It contains the following information:

a. Risk details

b. Nature and type of risk details

c. Likey occurrence of risk

d. impact or monetary expected value of the risk

e. strategy to fight the risk

f. containment and mitigation measures to be taken if the risk event occurs.

Question: b. iii. The four basis response strategy to the negative risk is as below:

a. The first one is to avoid as far as possible to have a negative risk.

b. if the risk occurs then try to adopt the reduced strategy by adopting the containment measures.

c. The third strategy is to transfer the risk by using different insurance options available to cover up the risk

d. The last strategy is to accept because sometimes the containment measures are more expensive than the impact of risk therefore we need to analyze and do the same.