{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

G whether an additional site access whether road will

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: ither happen in total or not at all, e.g., whether an additional site access whether road will be required. If it happens, an extra cost associated with the risk will be incurred in full. If it does not happen, no cost will be incurred. Dr. Maged Ezzat Georgy Fixed Risks The average risk allowance (contingency) for a certain certain fixed risk is the EV for the risk. EV = probability * cost (if it occurs). The maximum risk allowance is the entire cost of the risk. risk. Dr. Maged Ezzat Georgy Fixed Fixed Risks Let us take an example... Risk Cost Prob. Average Maximum Access road $40k 20% $8,000 $40,000 Security post $10k 35% $3,500 $10,000 Special consultant $20k 60% $12,000 $20,000 . $23,500 $70,000 . Σ Dr. Maged Ezzat Georgy Variable Risks These are events that may occur but the extent is uncertain, e.g., labor productivity changes or labor fluctuations of exchange rate. Typically, a histogram / probability distribution can be developed based on historical record...
View Full Document

{[ snackBarMessage ]}