Qualitative and Quantitative Risk Analysis

Question: Discuss about theQualitative and Quantitative Risk Analysis. Answer: Introduction: The risk is defined as a possibility that occurred due to human actions and events and leads to the consequences that might harm or impact something which is related to the human being values (Kates Kasperson,1983). Projects are complex undertaking which involves a set of related works and activities perspective which should be defined. There are different kinds of risks which are involved with the projects; these could be complex and lengthy in nature. Risk analysis is the process in which the analysts find out the risk involved with the project. There could be different ways to find out the risks involved with the projects. There are two methods for the Risk analysis in the projects. Qualitative method Quantitative method Two techniques which are widely used for the project risk assessment are the Qualitative and Quantitative approach. These two techniques have several other methods which could be used for the risk assessments. The hierarchical analysis consists of two different analysis techniques which are RBS and WBS. Another risk analysis is the cost benefit analysis. In the project which I have chosen, I will be going to analyze the risk associated with the risks of these two methods. RBS: An RBS stand for the risk breakdown structure is considered as a helpful means for the analysis in a project. This is also defined in the terms of the WBS in which its stated that its a source based collection of project risks that can be seen over the project. Every downward direction represents an ever more detailed meaning of the different source of the project.(Hillson, 2002a). A RBS can be use but it's not possible to include full risk associated with the project as this will provide the basic structure of the primary risks involved in it. The perfect condition to provide a RBS which is directly relate to the industry or with the kind of project which is being undertaken by the organization. In the case of the finding the risks associated with the project which I have chosen the best way is to implement the RBS and find out the risks associated with the project which is being undertaken by the Organization itself. This will provide a specific breakdown of the risks associated wi th the particular project. I will apply the RBS as per our Risks associated with the Projects. The Design and the Timeline and Cost risks are major risks in my project so I will make sure that these risks will be addressed properly. Benefits: Risk Identification assistance: This provides a complete list of the risk which are associated with the project in quick manner. I will find the risks which are involved with the Project. Risk assessment: This provides the prominent way of the threat associated with the development. This makes sure that the main cause of the risk can be found easily. Comparison of alternatives: If same RBS is being used in different project at once, and then it becomes easier to compare different projects at once The RBS of the construction project will help the company to address same kind of risks in another construction project. I will make a list of alternative like an alternate design which will accomplish the failed design. This will provide a basic and necessary assessment for the risks involved. The Most Applicable Risks Associated with Construction Projects are: Risks related with time and cost of the project: Timeline and cost are two most crucial things in construction projects. I will select a basic timeline for the project which will be based upon the final timeline of the project. In project which I have chosen earlier the Timeline is about 4 Months and I will make it as per the Project requirement. Risk associated with Designers: The risk which is related with the design of the project, any faulty design or change in the design by the client during ongoing project is a risk for the construction and company. I will make sure that our Project design is appropriate and as per the requirement. Environmental Risks Risks Associated with the Project I have Applied Both the Technique Qualitative and Quantitative with to Describe the Risk. Qualitative Technique: SWOT analysis. SWOT: Swot analysis is an important tool for the strategic analysis, it helps an organization to determine the Strength, weakness, Opportunity and Threats related with the organizational activities. It starts with defining the objectives and the factors including external and internal which could affect the organizational activity. The strength and weakness are considered as internal aspects but the opportunity and threats are considered as external. In the case of Construction project SWOT analysis can be considered as a Qualitative Techniques for the risk assessment. SWOT provides the weakness and strength of a project. As per the project the weakness and the strength can be easily calculated. The weakness such as different risks; Environmental risks Financial risks These can be addressed in the SWOT analysis and this will give an insight of the risks involved in the Project. SWOT analysis also evaluates the Threat and Opportunity related to the construction project so that the organization could mitigate those risks. Risk Impact Matrix: The more and more significance of risk management made it even more approachable factor to determine the risks associate with the project. In case of my project the risks which are associated are, Risk with the Cost and timeline Risk associated with the Design Environmental risk The Risk Impact matrix is consists of two different objectives, the Probability o the risk to occur and the Impact. We can take the probability of the events as the High, Medium and Low as per the probability of occurrence. Probability of the occurrence can be anything could be 0 to 100 which will provide the basic overview of the risk occurrence. The Impact could be in varies nature, as our Project has risks involved with the Design perspective as well as on the Environmental perspective. The Probability of occurrence of the Design failure is more and out of 10 It would be 8 as per the probability. We also knows that risk associated with it is the expansion of the Cost and the Time involved in the Project, so the Probability of this risk is about 70% and its high. I will make a proper risk assessment matrix for the Risks associated with it So that I can manage the risks involved in the Projects. Risk Assessment Matrix: No. Risks Rating (1-10) Probability ( High or Low) 1 Cost and Time 8 HIGH 2 Environmental 4 LOW 3 Design Faults 8 HIGH Conclusion: This three kind of risk assessment techniques, SWOT and the last one Risk Impact matrix is being described. The project which I have chosen and the risks associated with it can be analyzed by these risk assessment techniques. Finding risks associated with a project and the consequence within it is a primary thing. As we know each project has own risk associated with it, and this should be perfectly addressed. I have done these risk assessment techniques and defined three risks which are related with the project I have chosen. Those will be analyzed and later on different alternative will be applied so that the project would become successful. Reference: V. Ramana (2011). "Beyond our imagination: Fukushima and the problem of assessing risk". Bulletin of the Atomic Scientists. Diaz Maurin, Franois (2011). "Fukushima: Consequences of Systemic Problems in Nuclear Plant Design". Economic Political Weekly Bennet, P. G. (2000). Applying the precautionary principle: A conceptual framework. In M. P. Cottam, D. W. Harvey, R. P. Paper, J. Tait (Eds.), Foresight and precaution Hillson , D . A . ( 2002b ) . Using the Risk Breakdown Structure (RBS) to understand risks . Proceedings of the 33rd Annual Project Management Institute Seminars Symposium (PMI 2002), presented in San Antonio USA, Hillson , D . A . ( 2003 ) . Using a Risk Breakdown Structure in project management . Journal of Facilities Management 2