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Project Risk and Cost Analysis

 Project Risk and Cost Analysis

Authors: Michael S. Dobson, Deborah Singer Dobson
Credit: 2.0 CEUs
Testing Format: multiple choice
Your Price: $159.00
ISBN: 9780761214922
Format: Spiral/Comb/Coil Binding

Overview

In this Self-Study course, Project Risk and Cost Analysis, we will focus on risk in the context of project management, primarily in the area of risk’s effects on project costs, with emphasis on the many modern tools that help you and your organization quantify and manage project risk. We will follow the basic project risk management approach as laid out in A Guide to the Project Management Body of Knowledge (PMBOK® Guide), 4th Edition, popularly known as the PMBOK® Guide, along with other sources listed in the bibliography and suggested reading. Selected Learning Objectives: You will learn how to: – perform a formal risk and cost analysis -apply the Earned Value Method to risk management -and adjust schedule and budget reserves appropriately for your project conditions.

Testing Format

This course contains one multiple choice test valued at 2 CEU’s (continuing education units).

Table of Contents

Contents

About This Course

How to Take This Course

Introduction

Pre-Test

Chapter 1: Introduction to Project Risk and

Cost Analysis

Learning Objectives

Fundamental Concepts of Risk and Risk Management

Risk Defined

The Value of a Risk

Types of Risk

Risk Management Defined

Cost Analysis and Risk Management Planning

Recap

Review Questions

Chapter 2: Risk Identification

Learning Objectives

Identifying Risks

Risk Register

Risk ID

Description of Risk

Category of Risk

Where Found?

Probability of Occurrence

Nature and Degree of Impact

Risk Rating

Disposition

Comments

How to Identify Risks

Systematic Risk Identification

Documentation

Brainstorming

Diagramming Techniques

Checklists

Expert Judgment

Output from Risk Identification Process

Recap

Review Questions

Chapter 3: Qualitative Risk Analysis 37

Learning Objectives

Introduction to Risk Analysis

Qualitative Risk Analysis

Quantitative Risk Analysis

Qualitative Risk Analysis

Start

Impact

Probability

Urgency

Ownership

Solution

Acceptability

Risk Triage and Other Risk Analysis Processes

Recap

Review Questions

Chapter 4: Tools for Qualitative Risk Analysis 51

Learning Objectives

Qualitative Risk Analysis Tools

Assessing Probability and Impact

Establishing Ranges

Risk Thresholds

Combining Probability and Impact

Calculating Risk Scores with Non-Numerical Information

Developing a Risk Ranking for a Project

Updating the Risk Register and Developing a Risk Information Sheet

Recap

Review Questions

Chapter 5: Statistical Foundations of 69

Quantitative Risk and Cost Analysis

Learning Objectives

Quantitative Risk and Cost Analysis Fundamentals

A Statistic

The Law of Large Numbers

Probability, Odds, and Throwing Dice

Basic Rules of Probability

Distribution

Normal Distribution

Measures of Central Tendency: Mean, Median, and Mode

Normal and and Other Distributions

Standard Deviation

Other Types of Distributions

Recap

Review Questions

Chapter 6: Risk Cost Analysis 91

Learning Objectives

Introduction to Cost Risk Analysis

Classical Risk

Risk Cost Analysis

Insurance as a Model for Risk Cost Analysis

Contingency Allowance and Contingency Reserve

Pricing Insurance Risk

Risk Premiums

Insurance Risk with Low Variation

Insurance Risk with High Variation

Additional Factors in Risk Decisions

Black Swan Events

Developing a Final Risk Price

Recap

Review Questions

Chapter 7: Quantitative Cost Analysis Tools 111

Learning Objectives

Quantitative Cost Analysis

Cost Estimating Under Uncertainty

Cost Risk Analysis Tools

Cost-Benefit Analysis

Expected Monetary Value (EMV)

Decision Tree Analysis

Sensitivity Analysis

Recap

Review Questions

Chapter 8: Quantitative Schedule Analysis Tools 123

Learning Objectives

Sensitivity Analysis for Scheduling Issues

Schedule Risk Analysis

Schedule Development

Network Diagramming and Critical Path Analysis

Forward and Backward Pass

Critical Path and Float

Types of Schedule Risk

Three-Point Estimating Techniques

Program Evaluation and Review Technique (PERT)

Monte Carlo Simulation

Recap

Review Questions

Chapter 9: Risk Response Planning 143

Learning Objectives

Organizing for Risk Response Planning

Residual and Secondary Risk

Residual Risk

Secondary Risk

Multi-Stage Solutions

Managing Threats

Avoidance

Transfer

Mitigation

Managing Opportunities

Exploit

Enhance

Share

Managing Acceptance

Contingent Responses

Acceptance

Implementing Risk Response Strategies

Recap

Review Questions

Chapter 10: Risk Monitoring and Control 159

Learning Objectives

Risk Management Processes in Project Execution, Monitoring and

Control, and Closeout

Risk Management Plans and Policies

Risk Management Policy Development

Philosophy, Approach, Scope

Risk Management Methodology and Process

Project Risk Monitoring and Control Systems

Managing the Project Risk Environment

Establishing Risk Metrics and Early Warning Indicators

Earned Value Project Management

Implementing and Monitoring Risk Responses

Corrective Actions and Unplanned Responses

Watching “Watch and Wait” Risks

Change Management and Risk

Planning for Changes

Managing Unplanned Change

Revisiting Risk Identification and Risk Analysis

Closing Risks

Risk Management and Project “Lessons Learned”

Recap

Review Questions

Answers to Exercises and Case Studies 175

Exercise 1-1. Managing Important Risks

Exercise 1-2. Your Current Risk Management Process

Exercise 1-3. What You Spend on Risk Management

Exercise 2-1. Risk Identification Practice

Exercise 2-2. SWOT Analysis

Exercise 3-1. Cause-and-Effect Diagram

Exercise 4-1. Establishing Risk Thresholds

Exercise 4-2. Ranking Risks

Exercise 4-3. Prepare a Risk Information Sheet

Exercise 5-1. Probability Practice

Exercise 5-2. Calculate a Standard Deviation

Exercise 6-1. Greater Accident Variation

Exercise 6-2. Premium Income and Claims Outlays

Exercise 6-3. Pricing Risk

Exercise 7-1. Deterministic or Probabilistic?

Exercise 7-2. Calculating Expected Monetary Value (EMV)

Think About It . . . (Decision Tree)

Exercise 7-3. Decision Tree

Exercise 7-4. Sensitivity Analysis

Exercise 8-1. Critical Path

Exercise 8-2. Scheduling with PERT Estimates

Exercise 8-3. Calculating Standard Deviation for a Path or Network

Exercise 9-1. Risk Response Planning

Exercise 9-2. Residual and Secondary Risk

Exercise 9-3. Types of Risk Response

Exercise 10-1. Earned Value Method (EVM) Performance Index Ratios

Bibliography and Recommended Reading 201

Glossary 205

Post-Test 215

Index 221