Answer to Question #221714 in Management for Gabby

Question

Discuss how you would perform quantitative risk analysis in a project management environment.

Answer 1

In a project management environment, I would perform quantitative risk analysis by first obtaining the risk inputs which are the risk register, the risk management plan, schedule management plan, cost management plan and the organizational process assets. The quantitative risk analysis of a project calculates output for the risk register. A risk could be anything that could positively (opportunity) or negatively (threat) impact a project. After identifying the risks in the risk register, I can then identify appropriate tools to use in quantitative risk analysis for probability distributions, data gathering techniques and modeling techniques. Probability distributions mathematically represent the probability of a risk occurring and can be represented graphically or in tabular form. Data gathering and representation techniques entail a structured interview to determine probability and impact of risk from subject matter experts. I can then decide on a modeling technique from either sensitivity analysis, expected monetary value analysis, decision tree analysis, simulation or Tornado diagrams. The output after modeling will be used to update the risk register.