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Project Risk Management: Monte Carlos Simulation: Part B: Project Time Duration

The document discusses quantitative and qualitative risk assessment methods. Qualitative risk assessment is more subjective and focuses on identifying risks and assessing the likelihood and impact without numbers. Quantitative risk assessment assigns numerical values to risks based on measurable data to analyze effects on cost, scope and schedule. A summary table shows qualitative risk assessment is quicker but subjective while quantitative is time-consuming but uses tools and probabilistic estimates. The conclusion recommends using both methods together for a comprehensive risk assessment.

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muhammad saqib jabbar
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56 views3 pages

Project Risk Management: Monte Carlos Simulation: Part B: Project Time Duration

The document discusses quantitative and qualitative risk assessment methods. Qualitative risk assessment is more subjective and focuses on identifying risks and assessing the likelihood and impact without numbers. Quantitative risk assessment assigns numerical values to risks based on measurable data to analyze effects on cost, scope and schedule. A summary table shows qualitative risk assessment is quicker but subjective while quantitative is time-consuming but uses tools and probabilistic estimates. The conclusion recommends using both methods together for a comprehensive risk assessment.

Uploaded by

muhammad saqib jabbar
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Project Risk Management:

Monte Carlos Simulation

Part B: Project time duration:

Co-location:

B D H

I J
A

C E G

A B D H I J

Expected Time Duration: 20+24+20+24+16+20= 124

A C E D H I J

20+ 28+ E + 24 + 16+ 20

A C F G I J

Expected Time Duration: 20 + 28 + 24 + 20 + 16 + 20 = 128

Findings:

The best path to start project is when expected time is 124 days.
Qualitative vs Quantitative risk assessment:

Two well-established methodologies dominate risk analysis: qualitative and quantitative. Yet, despite
their universality, a surprising number of people within the project management bubble struggle to
understand how best to deploy these methodologies.

Qualitative Risk Analysis is Subjective:

The most obvious difference between qualitative and quantitative risk analysis is their approach to the
process.

Qualitative risk analysis tends to be more subjective. It focuses on identifying risks to measure both the
likelihood of a specific risk event occurring during the project life cycle and the impact it will have on the
overall schedule should it hit.

The goal is to determine severity. Results are then recorded in a risk assessment matrix (or any other
form of an intuitive graphical report) in order to communicate outstanding hazards to stakeholders.

Quantitative Risk Analysis is Objective

Quantitative risk analysis uses verifiable data to analyze the effects of risk in terms of cost overruns,
scope creep, resource consumption, and schedule delays. 
In layman’s terms, quantitative risk analysis assigns a numerical value to extant risks — risk A has a 40%
chance of occurring, based on quantifiable data (fluctuations in resource costs, average activity
completion time, logistics etc.) and a 15% chance of causing a delay of X number of days. It’s entirely
dependent upon the quantity and accuracy of your data

Summary:

Qualitative Quantitative
Risk level Project level
Subjective evaluation of probability and impact Probabilistic estimates of time and cost
Quick and easy to perform Time consuming
No special software or tools required May require specialized tools

Final Thoughts:

Ultimately, the risk assessment methodology you use should depend on what you are trying to measure
and what outcomes you’d like to see from that measurement. A quantitative risk assessment focuses on
measurable and often pre-defined data, whereas a qualitative risk assessment is based more so on
subjectivity and the knowledge of the assessor. A quantitative risk management methodology is best
suited for a detailed look at comparing like-things across your organization, while a quantitative risk
assessment is best for evaluating the implementation of a framework that does not inherently have pre-
defined values. In many cases, you can combine the two methodologies to enhance an existing risk
assessment. Knowing which methodology to use in various situations could mean the failure or the
success of your risk management program.

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