Computation and the Location of a Risk Factor

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Integrated Project Management
By Earl Hall, Juliane Johnson
Table of Contents
Chapter 9.  Risk Analysis Details


Each task leader provides his or her risk analysis worksheet(s) to the project manager. The project manager them prepares a table listing each task according to the critical path sequence, what its D and likelihood (Y) are, and its creep or step-function character. This table is distributed to each member of the project team. The team then will convene to review this worksheet and pick out the risk factor insertion points. See Table 9-1 for the risk factor contribution worksheet.

It is important that the full body of displayed information be available to the team. The project manager should lead the team through a review. Some team members may wish to discuss the data. If discussion points are raised that lead to line item adjustments, it is good; the task leader, however, always has the final call on what the task contribution for his or her task should be. The team will discuss and decide on risk factor insertion points at the risk factor meeting.

The rule of thumb is to insert a risk factor every 20 30 critical tasks. Whenever a natural sequence completion point (a point where one phase of the effort is completed) within the 20 30 task range emerges, this point should be used. If there is one point where the task start date must be firm, insert a risk factor just ahead of this task to protect this date. For example, if one task is "test assembly in a test cell" and the test cell availability is tightly scheduled, insert the risk factor before this task to be sure that you buffer upstream risks and meet the test scheduled date.

When the risk factor insertion points have been identified, the risk factor's size is determined by adding up all of the contributions in the task sequence leading up to the insertion point. If one or two step-function risks are in the series, and one (or more) step function-risk D is nearly as large, or larger, than the sum of the contributions, the risk factor should be adjusted as previously discussed. Step-function Ds significantly smaller than the series risk factor do not need to be given any special consideration.


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    Integrated Project Management
    Integrated Project Management
    ISBN: 0071466266
    EAN: 2147483647
    Year: 2005
    Pages: 190

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