HW4.docx - Homework 4 1 In Homework 3 you updated your...

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Homework 4 1. In Homework 3, you updated your spreadsheet with risks for your project of interest. In your spreadsheet, you included the following for each risk. On first worksheet/tab: priority, risk ID, status, probability of risk event, probability of impact, risk likelihood, total loss, and expected loss. On second worksheet/tab: risk ID, risk event statement, risk event drivers, impact statement, and impact drivers. a. For each risk on the list, first decide if the total loss value is either so small that the risk can be self-insured, or so large that the risk must be considered active. For the former, make sure the status is "inactive," while for the latter, make sure the status is "active." Now divide the list of risks into two groups: active and inactive. Then, within each group, sort the risks in descending order of expected loss. Now ensure that the priority ranking is as intended. Split the list of risks into two separate worksheets, one for active risks and the other for inactive ones. b. For each risk on the active list, determine if you should defer risk resolution pending more information, take no action (accept the risk), or develop an action plan. (You must have at least two risks on your list for which you will develop action plans.) c. For each risk from part b for which an action plan should be developed, examine the risk event and impact drivers. Then, for each risk, develop at least one prevention plan and one contingency plan. By examining the changes in the expected loss as a result of your action plans, determine how much (if any) reserves to allocate. Record these action plans on your risk-tracking spreadsheet (e.g., see Figure 8-2). At this stage, you'll have one worksheet per active risk.
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