Discuss the Contribution of John the 23rd Towards Human Rights in Developing Countries
4. Risk Analysis
4.1. Objectives of Risk Analysis
Typically, a project's qualitative risk assessment will recognize some risks whose occurrence is so likely or whose consequences are so serious that further quantitative analysis is warranted. A key purpose of quantitative risk analysis is to combine the effects of the various identified and assessed risk events into an overall project risk estimate. This overall assessment of risks can be used by the transportation agency to make go/no-go decisions about a project. It can help agencies view projects from the contractor's perspective through a better understanding of the contractor's risks. More commonly, the overall risk assessment is used to determine cost and schedule contingency values and to quantify individual impacts of high-risk events. The ultimate purpose of quantitative analysis, however, is not only to compute numerical risk values but also to provide a basis for evaluating the effectiveness of risk management or risk allocation strategies.
Many methods and tools are available for quantitatively combining and assessing risks. The selected method will involve a tradeoff between sophistication of the analysis and its ease of use. There are at least five criteria to help select a suitable quantitative risk technique: 1. The methodology should be able to include the explicit knowledge of the project team members about the site, design, political conditions, and project approach. 2. The methodology should allow quick response to changing market factors, price levels, and contractual risk allocation. 3. The methodology should help determine project cost and schedule contingency. 4. The methodology should help foster clear communication among the project team members and between the team and higher management about project uncertainties and their impacts. 5. The methodology should be easy to use and understand.
Figure 13: Cost risk assessment top-level diagram
[pic]
4.2.
4.1. Objectives of Risk Analysis
Typically, a project's qualitative risk assessment will recognize some risks whose occurrence is so likely or whose consequences are so serious that further quantitative analysis is warranted. A key purpose of quantitative risk analysis is to combine the effects of the various identified and assessed risk events into an overall project risk estimate. This overall assessment of risks can be used by the transportation agency to make go/no-go decisions about a project. It can help agencies view projects from the contractor's perspective through a better understanding of the contractor's risks. More commonly, the overall risk assessment is used to determine cost and schedule contingency values and to quantify individual impacts of high-risk events. The ultimate purpose of quantitative analysis, however, is not only to compute numerical risk values but also to provide a basis for evaluating the effectiveness of risk management or risk allocation strategies.
Many methods and tools are available for quantitatively combining and assessing risks. The selected method will involve a tradeoff between sophistication of the analysis and its ease of use. There are at least five criteria to help select a suitable quantitative risk technique: 1. The methodology should be able to include the explicit knowledge of the project team members about the site, design, political conditions, and project approach. 2. The methodology should allow quick response to changing market factors, price levels, and contractual risk allocation. 3. The methodology should help determine project cost and schedule contingency. 4. The methodology should help foster clear communication among the project team members and between the team and higher management about project uncertainties and their impacts. 5. The methodology should be easy to use and understand.
Figure 13: Cost risk assessment top-level diagram
[pic]
4.2.