s.cholette, based on mcgraw-hill/irwin managing risk
TRANSCRIPT
S.Cholette, based on McGraw-Hill/Irwin
Managing Risk
Managing Risk
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Risk Management Process
Risk Management Process
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The Risk Event Graph
FIGURE 7.1
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Risk Management’s Benefits
Risk Management’s Benefits
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The Risk Managemen
t Process:a 4 Step Program
FIGURE 7.2
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Managing Risk
Managing Risk
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Partial Risk Profile for Product Development Project
FIGURE 7.3
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Risk Breakdown Structure
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Risk Assessment Form:A Typical Example
FIGURE 7.4
Detection Difficulty is a misnomer- better to consider it as “ability to mitigate/avoid upon discovering the problem” before having to resort to a full blown contingency planAlthough the text shows how to calculate “risk value” by multiplying these numbers together, be cautious about relying on such an arbitrary measure
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Impact Scales- One Example
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Risk Severity Matrix- an example
FIGURE 7.5
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Managing Risk
Managing Risk
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Contingency Planning
Contingency Planning
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Sample Risk Response Matrix
FIGURE 7.7
Note: although unclear from this text example the Detailed Response Strategy and Contingency Plans are not the same thing.We might Reduce the chance of User Backlash by designing a more user-friendly interface. But, if we fail to do that, our Contingency Plan is to have a large support staff help frustrated users navigate
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Risk and Contingency Planning
Risk and Contingency Planning
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Contingency Funding and Time Buffers
Contingency Funding and Time Buffers
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Contingency Fund Estimate-Sample
TABLE 7.1
Figures in 000’s $Note: the Management Reserve is too small for my comfort
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Managing Risk (cont’d)Managing Risk (cont’d)
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Risk Goes Hand in
Hand with…
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Change Management Control
Change Management Control
“Your prototype looks great, but can we use a web interface instead?”
Err, I guess so, but…
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Change Management Control
Change Management Control
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The Change Control Process
FIGURE 7.8
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Benefits of a Change Control System
Benefits of a Change Control System
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What is the difference between avoiding a risk and accepting a risk ?
What is the difference between mitigating a risk and contingency planning ?
What are th likely outcomes if a change control process is not used ? If a change control log is not used ?
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Change Request
Form: Sample
FIGURE 7.9
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Change Request
Log: Sample
FIGURE 7.10
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One way of incorporating Risk Planning:PERT—Program Evaluation Review Technique
One way of incorporating Risk Planning:PERT—Program Evaluation Review Technique
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Activity and Project Frequency Distributions
FIGURE A7.1
Why might activity distributions look so skewed?Even with such skewed activity distributions, why is the overall Project distribution symmetric?
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Activity Time Calculations
The weighted average activity time is computed by the following formula:
(7.1)
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Activity Time Calculations (cont’d)
The variability in the activity time estimates is approximated by the following equations:
The standard deviation for the activity:
The standard deviation for the project:
Note the standard deviation of the activity is squared in this equation; this is also called variance. This sum includes only activities on the critical path(s) or path being reviewed.
(7.2)
(7.3)
t
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Example Given the following activities, expected durations and
predecessor information, construct the AoN project network and use the CPM.
a5,a45a6
a36a5
a216a4
a120a3
a113a2
---30a1
predecessorsdurationActivity
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Activity Times and Variances
TABLE A7.1
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Probability of Completing the Project
The equation below is used to compute the “Z” value found in statistical tables (Z = number of standard deviations from the mean), which, in turn, tells the probability of completing the project in the time specified.
(7.4)
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Text Example
Consider the following 6-activity project Draw the AoN and use the CPM to compute the CP, slack Use PERT to analyze the chance the delays on CP activities
does not push the project duration beyond 67 days. Anything else we should consider?
Activity a m b te=(a+b+4m)/6 var=((b-a)/6)^2a1 17 29 47 30 25a2 6 12 24 13 9a3 16 19 28 20 4a4 13 16 19 16 1a5 2 5 14 6 4a6 2 5 8 5 1
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Example: Network, CP, Slack
FIGURE A7.2 (cont’d)
a1
a3 a5
a6
a4a2
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PERT, Considering the CPActivity a m b te=(a+b+4m)/6 var=((b-a)/6) 2̂a1 17 29 47 30 25a2 6 12 24 13 9a3 16 19 28 20 4a4 13 16 19 16 1a5 2 5 14 6 4a6 2 5 8 5 1
nice they div ide by 6! ev en nicer the sqrts are integer!
CPMpaths a1->a2->a4->a6 64 thus this is the critical path
a1->a3->a5->a6 61 total slack = 3
Giv en a scheduled time: Ts 67
Chance project (considering CP) is less:stdev(path) =sqrt( sum var(path) 6.00 still integer-w heee!
z = (Ts-Te)/stdev(Cpath) 0.5so prob = 69% is the chance w e are not later than the scheduled time, considering the CP.
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Example: Possible Project Duration
FIGURE A7.3
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Some Sample Z Values
TABLE A7.3
A z-table listing such values will be provided to you on exams
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What Might We Have Forgotten? In the CPM, it is clear what the critical path is! With PERT we can now consider network sensitivity in
more detail. Extension of the textbook example- what additional analysis
would you do?
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PERT: Caveats Abound For checking project duration considering multiple paths,
it’s not as simple as adding up the probabilities. Different paths usually have some activities in common. Once again, the whole assumption of independence of activity
durations must be considered.
For complex or high-value projects, Monte Carlo simulation is often a more appropriate approach. Beyond scope of this class, take DS851 or DS852 for more!
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Group Exercise Sample question from a DS856 final exam: Use
the following table and a desired completion of 60 days
What is the likelihood that the CP exceeds 60 days?, How do PERT calculations differ from that of CPM, using the “most likely” time?
What should the PM worry about tracking besides CP activities? What doesn’t the PM need to worry about?
Activity predecessor a m bA none 8 10 12B A 5 7 9C B 10 15 20D A 10 15 50E A 18 18 18F C,E,F 20 22 42