Risk Management - a Quantitative Approach

Name: Johnny Chamata

Student ID: 7E1B9207/13443261

Course: MSc. Project Management

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Project Risk Management 641

Assignment 2: Quantitative Risk Analysis

Lecturer: Mr. Rajalingam Sokkalingam

Senior Lecturer – Electrical and Computer Engineering

School of Science and Engineering

Word Count: 5,255 words

Submission Date: June 22nd, 2012

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Content:

1. Introduction ………. ………………..………….………………………………............................... 3

1.1 Executive Summary ………………………………………………………………………………… 3

1.2 Project Scope ……………………………………………………………………………………….. 3

1.3 Relevant Information ……………………………………………………………………………….. 4

2. Budget Report ………… ……………………………..…………………………………………….... 5

2.1. Detailed WBS… ……………………………………………………………………………………. 5

2.2. List of Cost Variables...…………………………………………………………………………….. 5

2.3. Budget Calculation .………………………………………………………………………………... 6

2.4. Risk Identification .………………………………………………………………………………….. 7

3. Recommendation for Contingency ……………….………………………………………………… 9

4. Management Reserve..……………………………………………………………………………… 11

5. Sensitivity Analysis ……………..…………………………………………………………………….13

5.1. What is Sensitivity Analysis? ………………………………………………………………………13

5.2. Most Sensitive Cost Variable …..………………………………………………………………... 13

5.3. Most Sensitive Risk Variable …………………………………………………………………….. 15

6. Cost Comparison … ………………………………………………………………………………… 16

7. Appendix ……………………………………………………………………………………………... 19

7.1. Quick Reports………………………………. …………………………………………………….. 19

7.2. Probability Distribution: Explanation & Justification …………………………………………… 21

7.2.1. One Cost Variable ………………………………………………………………………………. 21

7.2.2. One Risk Variable ………………………………………………………………………………. 22

7.3. Correlation of Two Cost Variables ………………………………………………………………. 23

1- Introduction

1.1 Executive Summary

HSBC Bank has decided to connect its four branches over the State of Qatar using a Frame Relay (FR) Network. These branches are...