Performing Quantitative Risk Analysis for Projects
When you are performing Quantitative Risk Analysis for the project, you are trying to determine the overall risk exposure for the entire project.
This can assist the organization to take advantage of opportunities which means you are turning negative outcome to a positive one. By performing a quantitative risk analysis, you can take steps to maximize the positive consequence of the opportunities facing your project.
Quantitative risk analysis is a technique that is used to assess the risk exposure events to overall project objectives and determine the confidence levels of achieving the project objectives. Quantifying risk can help you identify some time and cost contingencies of a project. It further enhances the prioritization and scoring of risks produced during qualitative analysis.
A Practical example…
The project team on the Supply Chain management software project identifies process data for a statistical analysis using a Monte Carlo simulation to determine the confidence level that the project will be completed on time and within the budget.
The team identifies critical project parameters that affect the project schedule. The team further determines the project success rate and makes decisions about viable project alternatives taking into account the risk within the project.
In most everyday project management scenarios, conducting a quantitative risk analysis is adequate to meet the project manager’s purposes only in sophisticated, mature project management is there much additional value added by conducting a quantitative risk analysis.
All activities in the Planning marketing function are related and will be the foundation for the next function to work from by building on the blocks created. The planning stage is crucial for success and aligns all other functions towards a common goal, plan, budget and audience.
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