ClassNotesModuleC_L8

ClassNotesModuleC_L8 - Module C: Project Management...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
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)
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
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¢]
Background image of page 2
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
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 13

ClassNotesModuleC_L8 - Module C: Project Management...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online