Perform Quantitative Risk Analysis

Perform Quantitative Risk Analysis is the process of numerically analyzing the effect of identified risks on overall project objcctivcs (Tabic 11-5 and Figure 11-7). Perform Quantitative Risk Analysis is performed on risks that have been prioritized by the Perform Qualitative Risk Analysis process as potentially and substantially impacting the project's competing demands. The Perform Quantitative Risk Analysis process analyzes the effect of those risk events and assigns a numerical rating to those risks. It also presents a quantitative approach to making decisions in the presence of uncertainty. This process uses techniques such as the Program Evaluation and Review Technique (PERT), Monte Carlo simulation and decision tree analysis to:

• Quantify the possible outcomes for the project and their probabilities

• Assess the probability of achieving specific project objectives

• Identify risks requiring the most attention by quantifying their relative contribution to overall project risk

• Identify realistic and achievable cost, schedule, or scope targets, given the projcct risks

• Determine the best project management decision when some conditions or outcomes are uncertain.

Perform Quantitative Risk Analysis generally follows the Perform Qualitative Risk Analysis proccss. In some eases, Perform Quantitative Risk Analysis may not be required to develop effective risk responses. Availability of time and budget, and the need for qualitative or quantitative statements about risk and impacts, will determine which method(s) to use on any particular projcct. Perform Quantitative Risk Analysis should be repeated after Plan Risk Responses, as well as part of Monitor and Control Risk Responses, to determine if the overall project risk has been satisfactorily decreased. Trends can indicate the need for more or less risk management action.

Table 11-5 Perform Quantitative Risk Analysis: Inputs, Tools & Techniques, and Outputs

Inputs

Tools & Techniques

Outputs

2. Risk management plan

3. Cost management pfan

4. Schedule management plan

5. Organizational process assets

1. Data gathering and representation techniques

2. Quantitative risk analysis and modeling techniques

3. Expertjudgment v )

1. Risk register updates y J

6.0 Project Time Management

7,0 Project Cost Management

5.2 Define Scope

Enterprise/ Organization

• Sctieduie management plan

> Cost management plan

• Project scope statement

• Organizational process assets li.i Plan Risk Management

Risk Register

r T

11.4

Perform

Quantitative

*>

Risk Analysis

> Risk register updates

Risk Register

> Risk register updates

Figure 11-7 Perform Quantitative Risk Analysis Data Flow Diagram

Project Management Made Easy

Project Management Made Easy

What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.

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