ClassNotesModuleC_L8

# ClassNotesModuleC_L8 - Module C Project Management Advanced...

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1 Module C: Project Management Advanced Project Management Agenda 1. Risk & Probability factors 2. Cost / Time tradeoff 3. Fast Tracking 4. Keeping Decision Flexibility 5. Module Summary Risk Handling ± Have an escape route (Defensive Driving) ± Dive with a buddy (Scuba Diving) ± Have a crash-boat (Dingy Sailing) ± No move without 2 firm holds (Climbing) ± Around before over, over before on (Hiking) ± Multiple engines (Large aircraft)

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2 Risk ± Risk is formally defined as the probability of an event multiplied by the outcome of that event should it occur. • Risk identification - • Risk assessment – • Risk management - Risk Example ± Risk identification: ± Risk assessment: ± Risk management: (eliminate) (reduce) (pass on) (insure) “Expected Cost / Expected Return” Roll a die. Get \$1 if any of 1-2-3-4-5 appears Pay \$10 if a 6 appears. Probability of loss happening: 1/6 Expected cost of loss: 1/6 x \$10 = \$1.67 [Do not confuse with: Expected return on roll = \$1 x 5/6 - \$10 x 1/6 = -83¢]
3 Total Risk for a Project Identify the risks Evaluate the probabilities and costs of these risks Total Financial Risk = (risk probability)(cost if happens) Cost Where Uncertain \$P in possible worst case (pessimistic) \$O in possible best case (optimistic) \$M is the expected cost (most probable) Can use \$P and be safe (and lose the contract) Can use \$O and get the contract (and lose \$\$) Can use \$M, but may not be properly affected by outside chances use \$(P+O+4M)/6? [no guarantees] FYI Risk Info equivalent risks: Smoking 1.4 cigarettes (lung cancer) Eating 40 tablespoons of peanut butter

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## This note was uploaded on 04/17/2008 for the course ECE APS112 taught by Professor Weiss during the Spring '08 term at University of Toronto.

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ClassNotesModuleC_L8 - Module C Project Management Advanced...

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