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A Guide to Project Management

Of events and other relationships among variables and

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Unformatted text preview: ope Reduction Unacceptable to the Client Quality Reduction Unacceptable to the Client ment ment Quality Quality Degradation Barely Noticeable Only Very Demanding Applications Are Affected Quality Reduction Requires Client Approval geE L geE PL The impacts on project objectives can be assessed on a scale from Very Low to Very High or on a numerical scale. The numerical (cardinal) scale shown here is non-linear, indicating that the organization wishes specifically to avoid risks with high and very-high impact. P Figure 112. Rating Impacts for a Risk The use of data of low precision--for instance, if a risk is not well understood-- may lead to a qualitative risk analysis of little use to the project manager. If a ranking of data precision is unacceptable, it may be possible to gather better data. 11.3.3 Outputs from Qualitative Risk Analysis .1 Overall risk ranking for the project. Risk ranking may indicate the overall risk position of a project relative to other projects by comparing the risk scores. It can be used to assign personnel or other resources to projects with different risk rankings, to make a benefit-cost analysis decision about the project, or to support a recommendation for project initiation, continuation, or cancellation. .2 List of prioritized risks. Risks and conditions can be prioritized by a number of criteria. These include rank (high, moderate, and low) or WBS level. Risks may also be grouped by those that require an immediate response and those that can be handled at a later date. Risks that affect cost, schedule, functionality, and quality may be assessed separately with different ratings. Significant risks should have a description of the basis for the assessed probability and impact. .3 List of risks for additional analysis and management. Risks classified as high or moderate would be prime candidates for more analysis, including quantitative risk analysis, and for risk management action. 136 NAVIGATION LINKS ACROYMNS LIST ACRONYMS LIST ACROYMNS LIST A Guide to the Project Management Body of Knowledge (PMBOK Guide) 2000 Edition 2000 Project Management Institute, Four Campus Boulevard, Newtown Square, PA 19073-3299 USA Chapter 11--Project Risk Management Risk Score for a Specific Risk Probability 0.9 0.7 0.5 0.3 0.1 0.05 0.04 0.03 0.02 0.01 Risk Score = P I 0.09 0.07 0.05 0.03 0.01 0.18 0.14 0.10 0.06 0.02 0.36 0.28 0.20 0.12 0.04 0.72 0.56 0.40 0.24 0.08 0.80 0.05 0.10 0.40 0.20 Impact on an Objective (e.g., cost, time, or scope) (Ratio Scale) Each risk is rated on its probability of occurring and impact if it does occur. The organization's thresholds for low (dark gray), moderate (light gray) or high (black) risk as shown in the matrix determines the risk's score. A Guide to the A Guide to the Figure 113. Probability-Impact Matrix .4 Trends in qualitative risk analysis results. As the analysis is repeated, a trend of results may become apparent, and can make risk response or further analysis more or less urgent and important....
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