Risk Management Question Answers

Published: 2021-07-07 00:15:00
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Question 1A conclusive analysis in Quantitative Risk Analysis (QTRA) requires that a Qualitative Risk Analysis (QLRA) be concluded. The QLRA is done by rating the probability and impact of the risks on a scale of between 1 to 5, where 1 is for low and 5 for high risks. Each risk is analyzed separately from the rest. From this analysis, the risks are then prioritized. The Quantitative Risk Analysis requires that the probability and impact of the risks be compiled. The compiled data then constitutes the overall effect of the risk. Because a risk is general, it then requires that the managers determine the impact of the risk financially with respect to budgets. The combined impact and probability impacts are best for prioritizing the threats and opportunities. For threats, the managers then work on the most probable risks in ascending order (Dash, 2015).The quantitative records are used in projecting the financial risks involved with particular risks. The managers only plan after analyzing the quantitative risks. The highest risks for mitigation are; availability of senior designers and need for separate automation software. Having scored 60%, the availability of designers is quite significant especially because it has a high probability of occurrence. Though the impact is not as great, the probability raises the overall risk impact. Also, because the risk touches on the senior management, the risk demands urgent attention to ensure that the impact of inadequate labor does not affect the subordinates and other staff. The need for separate automation software regards the production process and hence touches on the productivity of the firm. The risk also has above average chances of occurrence. The overall effect is at a staggering double the budget. Hence the risk demands it be given priority over other risks (Dash, 2015). Also since on an overall aspect it is up to 58%, the risk could stall more than half of the total production.The data in the Pareto bars is from different countries and different company brands. The diversification of company brands is essential in providing an average score of companies in different regions, therefore pointing out the best performing regions. Also, the diverse products and services help determine the projects that are fastest to achieve; software and solution companies achieve the assigned projects faster compared to production companies. The graphs depict the impact of each risk. Time is notably the most impactful of the risks. Termed under scope risk, time is not recoverable and at the same time it costs money. The cause of the most impactful risks, are manageable by the Project Managers, “The top five subcategories are all things that are partially within the purview of the project leader,” (Kendrick, 2008, p. 5). Hence, while presenting the status of the risks in an organization, the managers should analyze their fault and capabilities in addressing these perils.If there is a 15% probability percent of the project exceeding three weeks, then the probability if the project taking three weeks or less equals to 85%:100%-15%=85%100% equals the total probability of completion of the project but there is a time limit. Because completion of projects before and on time do not result in any risks, they are regarded as equals and hence the 85%. However, penalties and interests may be added if projects are delayed and hence the 15% is regarded differently.Question 2The team has identified a risk in changes expected in the current materials used in the production. The specified materials used in the production of solar panels require changes. First, the Ethyl Vinyl Acetate (EVA) to be used in the project takes too long to heat cool (curing process) hence the reducing the anticipated number of panels to be made per day. A change in the EVA to one that cures faster will require that all the available material be scrapped of as defective and buy another product. Also, the new EVA is very expensive compared to the supposedly wrong EVA. The other option is to buy another heating machine to compensate the time that the EVA takes to cure. Two more machines are required for this project to be completed on time, because additional of one machine will not warrant completion of the project on time.The cost of new machines to supplement the delayed production process was not anticipated during the project development. The root cause of the risk in cost is changes in the project implementation process (new machine). The unanticipated delay in production and assembly of solar panels has also lead to loss in labor-hours. The employees employed were anticipated to be sufficient with respect to the expected 124 cycles in a day but with half of that, half of the funds spent in paying the employees is wasted. The changes is process could also be attributed to the delay in maturity of the project. Due to the unprecedented changes, the project will take longer than was expected.The qualitative and quantitative analyses are of essence, irrespective of the risk that they are associated with. The Qualitative analysis is important in showing the risks that should be given priority. The priority is derived from costs and time associated with the risks. The risks are then put under the risk register based on the impact they have on the project. The quantitative analysis combines the risks and their probabilities to determine their priorities in terms of action taken to mitigate them. The Project Manager also looks at the trends of occurrence of the risks so that some low impact risks are given priority because they have high chances of reoccurring.Mexi-Energy Risk RegisterRisk NameDescriptionRisk CategoryProbabilityImpactRisk ScoreInexperienced TeamDue to the project being relatively new, the team is mostly inexperienced on the issues related to the project. The machines used in this projects are custom made and the team has no experience with such designs.Threat80%significant2.4Contract misunderstandingsDue to California Energy not wanting to relinquish the contract of provision of energy to another contractor, there may be delays before the project commences.Threat60%catastrophic2.4Delay in acquisition of work permitsThe state and municipal governments are responsible for provision of the provision of this certificates. The delay will allow the employees to acquaint themselves with the machines.Opportunity40%Moderate0.8Machine FailureFirst is the probability that the custom made machines might not work as anticipated. Second the power from the plant might surpass the design of the machines.Threat60%Catastrophic2.4Delay in delivery of the machineThe machine manufacturer is a company dealing in electrical designs. However, the design is new and the firm has not designed another like the machine to be used. Tests might take longer than expected therefore leading to delay in commencement of the project.Threat40%Significant1.2Environmental hazardsThe project is one of its kind. The machines used will ensure that no energy is wasted; the hot steam is recycled and simultaneously electricity is generated. However, the probable environmental hazards such as explosions have not been entirely researchedThreat20%Catastrophic0.8Key:Impact Rate: Catastrophic- 4Significant- 3Moderate- 2Minimal- 1Risk Score= (Impact rate*Probability)/100Mexi-Energy Risk Breakdown Structure ProjectExternalContractsWork PermitCompetitionMarketWeatherSubcontractorsTechnicalMachineSoftwareKnowledgeDesignReferencesDash, S. N. (2015, August 25). PMP Prep: Qualitative vs. Quantitative Risk Analysis. Business Transformation, 1(1), 1. Retrieved from https://www.mpug.com/articles/pmp-prep-qualitative-vs-quantitative-risk-analysis/Kendrick, T. (2008). Identifying and Managing Project Risk (2 ed.). New York: American Management Association.

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