Quantitative Risk Analysis and Prioritization
Qualitative risk analysis is helpful in initial screening and prioritization of risks, but quantitative methods are needed to more rigorously and objectively sort risks. Quantitative risk analysis is used to more accurately determine the potential impact of project risks on the most important dimensions of a project: scope, quality, budget, and schedule.
Ultimately, the management of project risks will consume precious and limited organizational resources. Quantitative risk analysis methods must be used to allocate these resources in the most optimal way.
Books & Resources:
Book
Project Management Institute. 2013 A guide to the project management body of knowledge (PMBOK ® Guide)
Instruction:Read pages 333-341.
Cooper, D., Bosnich, P., Grey, S., Purdy, G., Raymond, G., Walker, P., & Wood, M. 2014 Project Risk Management Guidelines
Instruction:Read pages 95- 103 and 153-172
Heldman, K. (2005). Project manager's spotlight on risk management. http://site.ebrary.com.proxy1.ncu.edu/lib/ncent/docDetail.action?
Instruction:Read pages 136-143
Website Link
Edureka, (2014). Understanding quantitative risk analysis [Video file]. https://www.youtube.com/watch?
Instruction:Watch video
Assignment: Prioritize Project Risks and Summarize a Quantitative Risk Analysis Method
Instructions:
Assignment Part 1 - Prioritize Project Risks
Instructions
This assignment has two parts. In the first part, prepare and submit an Excel spreadsheet in which you quantitatively rate the project risks you identified in the Week 2 assignment, calculate a Risk Factor for each risk, and then sort the risks from highest to lowest Risk Factor. Be sure to use a scale of 1-10 for the Likelihood (with 1 being not very likely and 10 being practically certain) and a scale of 1-10 for the Impact (or Consequence) (with 1 being negligible and 10 being catastrophic). Use the RF = P X C method for calculating the Risk Factor for each risk and use a formula in Excel so that if the Likelihood or Impact rating changed, the Risk Factor would automatically change. You must sort all of the risks in your Excel spreadsheet from highest Risk Factor to lowest Risk Factor.
Assignment Part 2 - Summarize a Quantitative Risk Analysis Method.
Instructions
The second part of this assignment requires you to write a paper that summarizes any four quantitative risk analysis methods described in Part III of the Cooper et. al. (2014) text and pages 333 to 341 of the PMBOK® Guide (2013).
Support your paper with a minimum of three (3) external resources. In addition to these specified resources, other appropriate scholarly resources, including older articles, may be included.
Length: 5-7 pages not including title and reference pages
Your paper should demonstrate thoughtful consideration of the ideas and concepts presented in the course by providing new thoughts and insights relating directly to this topic. Your response should reflect scholarly writing and current APA standards. Be sure to adhere to Northcentral University's Academic Integrity Policy.