Risk Management Techniques
November 9, 2011
There are two categories for risk assessment: Qualitative and Quantitative. Qualitative methods seek to compare the relative significance of risk facing a project in terms of the effect of their occurrence on the project outcome. Quantitative techniques attempt to determine absolute value ranges together with probability distributions for the business or project outcome and, consequently, involve more sophisticated analysis. During this essay we will discuss risk measurement techniques from one of these two categories.
In order for management to determine which analysis technique is suitable they should consider the availability or resources for analysis, the experience of the analysts with the different techniques, the size and complexity of the project, the project phase in which the analysis takes place, the available information, and the purpose of the analysis. In any assessment that requires data management should consider accuracy, adequacy, relevancy, coherence, impartiality, direction, logicality, and validity.
The first analysis technique is a qualitative assessment called Delphi. Delphi is an intuitive technique and was developed at the RAND Corporation for technical forecasting. The Delphi technique was originally conceived as a way to obtain the opinion of experts without necessarily bringing them together face to face. The Delphi technique involves obtaining group consensus by asking respondents to give their opinion on the risks pertaining to a project or investment. A chairperson will collate the information and issue a summary of the findings to the respondents. The chairperson may request that some respondents change their opinion because of the groups’ collective opinion.
The Delphi is being used at all levels of government to move meetings to preset conclusions. Delphi has been applied in various fields such as program planning, needs...
Please join StudyMode to read the full document