Project Risk Management - Budget Report using Monte Carlo Simulation

This report focuses on project risk management and developing a project plan for successful and efficient project delivery. It discusses the use of Monte Carlo Simulation for risk management and evaluates the project scope and recommended baseline budget. It also identifies key factors for project success and assesses the cost breakdown. Additionally, it analyzes two risk events and discusses the importance of risk management in project processes.

Project Risk Management
Assessment 2 – Report (Project Budget) (40%)
Monte Carlo Simulation
Due: end of week 13 (midnight Sunday)
1

Budget Report (using Monte Carlo Simulation)
NOTE: This is a formal project management document, not an academic assignment.
a) Introduction
Executive Summary
The purpose of this report is to develop such a project plan that can be used to deliver
the entire project in a successful and efficient manner deliver the entire project in a successful
and efficient manner. The managerial activities and the software management approaches
will be applied for the management and delivery of the entire project. The project is always
vulnerable to risks and thus, risk will always be the tail of the project.
Evaluation of hazard is a specific report about anything, which may influence an individual
through his work. When that has finished, the individual or representative will all of a sudden
determination against the steadiest exhibition for taking to diminish the likelihood of harming
anybody. The item is to check the condition, including an inability. That is gone out on a limb
out by realizing the hazard likewise using important administration activities for limiting or
disposing of the danger. Risk management is the process for identification of the risks and
then analysing the risks that grows with the project life cycle. Here in this project, the project
management helps the entire project to proceed in an efficient way and to fulfil the objectives
of the project. This project management should be included in the whole process of the
project planning in order to indentify the risks. The identification of the risks as well the
controlling methods can be done by this risk management process of the recycle plant. With
the implementation of the risk management, the implementation of the mitigation strategies
will be easy for the identified risks.
Project Scope
This report will be highlighting the factors related to the deployment of the monte
Carlo analysis over the project and identifying the factors those could possibly impact the
overall delivery of the project. The estimated cost for the entire project delivery is estimated
to be $50,500+-10% and the timeline for the project delivery is estimated to be 100+-10%.
The attempts being driven in the project emphasizes over the identification of the possible
factors those could possibly contribute in the identification of the possible risks those could
severely influence over the entire project and its delivery. The project scope is the entire work
required for the delivery of the projects that will be associated with the various kinds of
products as well as business services. This project scope will include all the required factors
as well as elements inside the project and the success of this scope are also associated with
the scope of the project. For an effective flow of the project like the planning as well as
carrying of the project, the “Project Scope Management” is the effective method for the
project, as it will avoid the wastage of the valuable time as well as misuse of the resources for
a particular work.
2

Some key factors will enhance the project scopes that are discussed below:
Proper planning:
The planning will do the project initiation. The main flow of the work will depend on
the proper planning of the project. In the planning phase of the project, all the documentation
will be done by the team members that will include defining, controlling as well as managing
the project scope.
Requirements:
If this process is implemented then it will give an idea regarding the project requirements
and expectations from the various stakeholders. The important or the exact things have to be
documented by the team members from the project deliverables. Then the resources that are
required can be collected from the stakeholders by analysing the survey of the market.
Defining the scope:
The project scope will give a proper guidance for the project by which every participant of
the project will have the access to the entire project. Moreover, the individuals will have the
idea of their respective tasks and targets that are needed by the project.
WBS:
The WBS or the “Work Breakdown Structure” will help the team members by dividing as
well as allocating their individual tasks for the project. It is depended on the project scope as
well as project requirements.
b) Recommended Baseline Budget
The sources of information are mainly obtained from the project manager himself
The recommended baseline for the project is estimated to be the following list of the
activities, resources, timeline, and the resources. The top to bottom approach has been used
for the identification of the costs and the variables in the different level of the activities and
the deliveries can be listed as the following:
WBS Task Name Duration Resource Names Cost
1 Web application project
for researcher centre 89 days $50,425.20
1.1 Project starts 0 days Project Manager $0.00
1.2 RESEARCH AND
PLANNING PHASE 19 days $12,960.00
1.2.1
Requirement
Gathering and Analysis of
The Project
10 days $7,200.00
1.2.1.1 Creating the project
scope document 10 days Project Manager,project
team member 1 $7,200.00
1.2.2 Project Planning 9 days $5,760.00
1.2.2.1
Developing the
Project Plans (project
charter)
9 days Project Manager,Project
team member 2 $5,760.00
1.2.2.2 Conducting the kick
off meeting 0 days Project Manager $0.00
1.3 SOLUTION DESIGN 39 days $17,345.20
3

PHASE
1.3.1 Procurement 14 days $5,345.20
1.3.1.1
Identification of the
hardware and software
elements required for the
project
5 days IT Consultant $1,400.00
1.3.1.2
Identifying the
vendors capable of
supplying the elements
4 days project team member
1,Project team member 2 $2,240.00
1.3.1.3 Procurement of
elements 7 days
Hardware
elements[1%],Project team
member 2,Software and
licensing[1%]
$1,705.20
1.3.2 Developing the Site-
map the website 12 days $2,800.00
1.3.2.1 Creating the Website
Site-map 5 days Web developer $1,400.00
1.3.2.2 Creating the Website
Site-map Documents 5 days Web developer $1,400.00
1.3.3 Creating the website
Wire-frame 12 days $2,800.00
1.3.3.1
Creating the Front-
End Wire-frames Of the
Web application
5 days Web developer $1,400.00
1.3.3.2
Creating Back End
Wire-frames Of the Web
application
5 days Web developer $1,400.00
1.3.4 Designing the
Database 22 days $5,600.00
1.3.4.1 developing the
Database Schema 10 days Data base developer $2,400.00
1.3.4.2 Creating the Database 20 days Content developer $3,200.00
1.3.4.3
Documenting the
Database Schema
Document
5 days $0.00
1.3.5
Develop the
Requirement
Specification
5 days $800.00
1.3.5.1 Creating the SRS
document 5 days Content developer $800.00
1.4
DESIGNING THE
LAYOUT OF THE
DATABASE
3 days $2,520.00
1.4.1 Developing the Home
Page 3 days Web developer $840.00
1.4.2 Developing the Content
Pages 3 days Web developer $840.00
4

1.4.3 Developing the project
information pages 3 days Web developer $840.00
1.5
DEVELOPMENT OF
THE FRONT END OF
THE WEBSITE
4 days $2,240.00
1.5.1 Developing the Home
Section 2 days Web developer $560.00
1.5.2 Developing the Basic
Search 2 days Web developer $560.00
1.5.3 Developing the
Advanced Search 2 days Web developer $560.00
1.5.4 Developing the Project
Listing Section 2 days Web developer $560.00
1.6
DEVELOPMENT OF
THE BACK END OF
THE WEBSITE
6 days $3,360.00
1.6.1 Developing of the
Admin Login Sections 3 days Web developer $840.00
1.6.2 Admin Settings
development 3 days Web developer $840.00
1.6.3 Content Manager
settings development 3 days Web developer $840.00
1.6.4 Member Manager
settings development 3 days Web developer $840.00
1.7 TESTING 15 days $4,000.00
1.7.1 Internal Testing
(Functional/Security) 15 days $4,000.00
1.7.1.1 Functional Testing 5 days System tester $800.00
1.7.1.2 Security Testing 5 days System tester $800.00
1.7.1.3 User Acceptance Test 10 days System tester $1,600.00
1.7.1.4 Developing test
reports 5 days Content developer $800.00
1.8 GO LIVE 25 days $8,000.00
1.8.1 Deployment Activities 25 days $8,000.00
1.8.1.1 Uploading Files/
Contents 15 days $0.00
1.8.1.2 Setup Database 5 days Data base developer $1,200.00
1.8.1.3 Copy Database 5 days Data base developer $1,200.00
1.8.1.4 Other Miscellaneous
Setting Activities 10 days project team member
1,Project team member 2 $5,600.00
1.8.1.5 Project ends 0 days Project Manager $0.00
c) The cost breakdown can be given as:
Brief explain your 2 risk events
Two risk events can be listed as:
5

Content Manager settings development
Member Manager settings development
In the space of risk analysis, Verzuh (2015) talked about that chance administration is a
specific procedure to recognize, evaluate just as control distinctive distinguished dangers
dependent on a specific association's income and capital esteem. Be that as it may, all these
recognized dangers and dangers that incorporates money related vulnerability, vital
administration mistake, legitimate blunders and so on (Milosevic and Martinelli, 2016).
Thus, it is referenced that a legitimate hazard the board plan is chiefly arranged dependent on
a specific association forms used to do the distinguishing proof just as the controlling of
dangers dependent on various computerized resources. It is likewise examined that a specific
association utilize various procedures of hazard evasion, chance suspicions, chance
exchanging that fundamentally used to moderate dangers dependent on undertaking
prerequisite (Eskerod and Jepsen, 2016).
Cost elements
Bas
e
Cas
e
Min
imu
m
Most
Likel
y
Max
imu
m
Min
imu
m
Most
Likel
y
Max
imu
m
Sa
mp
led
Creating the project scope
document
7,20
0.00 80%
100
%
110
%
5,76
0 7,200
7,92
0
7,0
80
Developing the Project Plans
5,76
0.00 80%
100
%
110
%
4,60
8 5,760
6,33
6
5,6
64
Identification of the hardware and
software elements required for
the project
1,40
0.00 80%
100
%
110
%
1,12
0 1,400
1,54
0
1,3
77
Identifying the vendors
capable of supplying the elements
2,24
0.00 80%
100
%
110
%
179
2 2,240
2,46
4
2,2
03
Procurement of elements 1,70
5.20 80%
100
%
110
%
136
4.16
1705.
2
187
5.72
167
6.7
8
Creating the Website Site-
map
1,40
0.00 80%
100
%
110
%
1,12
0 1,400
1,54
0
1,3
77
Creating the Website Site-
map Documents
1,40
0.00 80%
100
%
110
%
1,12
0 1,400
1,54
0
1,3
77
Creating the Front-End
Wire-frames Of the Web
application
1,40
0.00 80%
100
%
110
%
1,12
0 1,400
1,54
0
1,3
77
Creating Back End Wire-
frames Of the Web application
1,40
0.00 80%
100
%
110
%
1,12
0 1,400
1,54
0
1,3
77
developing the Database
Schema
2,40
0.00 80%
100
%
110
%
1,92
0 2,400
2,64
0
2,3
60
Creating the Database 3,20
0.00 80%
100
%
110
%
256
0 3,200
3,52
0
3,1
47
Creating the SRS document 800 80%
100
%
110
% 640 800 880
786
.66
7
6

Developing the Home Page 840 80%
100
%
110
% 672 840 924 826
Developing the Content Pages 840 80%
100
%
110
% 672 840 924 826
Developing the project
information pages 840 80%
100
%
110
% 672 840 924 826
Developing the Home Section 560 80%
100
%
110
% 448 560 616 551
Developing the Basic Search 560 80%
100
%
110
% 448 560 616 551
Developing the Advanced
Search 560 80%
100
%
110
% 448 560 616 551
Developing the Project
Listing Section 560
80%
100
%
110
% 448 560 616
550
.66
7
Developing of the Admin
Login Sections 840 80%
100
%
110
% 672 840 924 826
Admin Settings development 840 80%
100
%
110
% 672 840 924 826
Content Manager settings
development 840 80%
100
%
110
% 672 840 924 826
Member Manager settings
development 840 80%
100
%
110
% 672 840 924 826
Functional Testing 800 80%
100
%
110
% 640 800 880 787
Security Testing 800 80%
100
%
110
% 640 800 880 787
User Acceptance Test 1,60
0.00 80%
100
%
110
%
128
0 1600
176
0
157
3.3
3
Developing test reports 800 80%
100
%
110
% 640 800 880 787
Setup Database 1,20
0.00 80%
100
%
110
% 960 1,200
1,32
0
1,1
80
Copy Database 1,20
0.00 80%
100
%
110
% 960 1,200
1,32
0
1,1
80
Other Miscellaneous Setting
Activities
5,60
0.00 80%
100
%
110
%
4,48
0 5,600
6,16
0
5,5
07
Output
Totals
50,4
25
20,
753
Summary statistics
Probability of meeting base case
value
100.
00%
Total budget required for 95.0%
confidence
22,7
21
7

Contingency required for 95.0%
confidence
-
27,7
05
Results using the Monte Carlo Simulation:
d) Recommendation for Contingency
Prob
(1-5)
Impact
(1-5)
Score
P X I
Mitigation strategies
8

5 5 25
Timely cross checking is required
5 5 25 Time management process is required to be followed
3 4 12
Pre-confirmation should be shared with both suppliers and contractor of
different raw materials used in the construction work
4 4 16 To mitigate this particular performance related risks,
2 3 6
Weather forecasting analysis should be done before the project initiation.
e) Sensitivity Analysis – based on the Tornado Chart, explain to the
Sponsor how you will control and minimise the following:
1. Most sensitive cost variable
2. Most sensitive risk event
The below table shows the most sensitive cost and risk variables:-
Cost elements
Base
Case
Mini
mum
Most
Likely
Maxi
mum
Mini
mum
Most
Likely
Creating the project scope document
7,200
.00 80% 100% 110% 5,760 7,200
Developing the Project Plans
5,760
.00 80% 100% 110% 4,608 5,760
Identification of the hardware and
software elements required for the
project
1,400
.00 80% 100% 110% 1,120 1,400
Identifying the vendors capable of
supplying the elements
2,240
.00 80% 100% 110% 1792 2,240
Procurement of elements 1,705
.20 80% 100% 110%
1364.
16 1705.2
Creating the Website Site-map 1,400
.00 80% 100% 110% 1,120 1,400
Creating the Website Site-map
Documents
1,400
.00 80% 100% 110% 1,120 1,400
Creating the Front-End Wire-
frames Of the Web application
1,400
.00 80% 100% 110% 1,120 1,400
Creating Back End Wire-frames Of
the Web application
1,400
.00 80% 100% 110% 1,120 1,400
developing the Database Schema 2,400
.00 80% 100% 110% 1,920 2,400
Creating the Database 3,200 80% 100% 110% 2560 3,200
9

.00
Creating the SRS document 800 80% 100% 110% 640 800
Developing the Home Page 840 80% 100% 110% 672 840
Developing the Content Pages 840 80% 100% 110% 672 840
Developing the project information
pages 840 80% 100% 110% 672 840
Developing the Home Section 560 80% 100% 110% 448 560
Developing the Basic Search 560 80% 100% 110% 448 560
Developing the Advanced Search 560 80% 100% 110% 448 560
Developing the Project Listing
Section 560 80% 100% 110% 448 560
Developing of the Admin Login
Sections 840 80% 100% 110% 672 840
Admin Settings development 840 80% 100% 110% 672 840
Content Manager settings
development 840 80% 100% 110% 672 840
Member Manager settings
development 840 80% 100% 110% 672 840
Functional Testing 800 80% 100% 110% 640 800
Security Testing 800 80% 100% 110% 640 800
User Acceptance Test 1,600
.00 80% 100% 110% 1280 1600
Developing test reports 800 80% 100% 110% 640 800
Setup Database 1,200
.00 80% 100% 110% 960 1,200
Copy Database 1,200
.00 80% 100% 110% 960 1,200
Other Miscellaneous Setting
Activities
5,600
.00 80% 100% 110% 4,480 5,600
The change the board plan for the most part does controlling of different recognized
impacts in executing and controlling stage. It is additionally characterized that change the
board plan is basic factor towards the task achievement. There are various exercises
recognized to depict the change the executives plan of this 'beachside house' venture are
demonstrated as follows:
 Discussion of venture vision explanation just as the point by point venture results
 Creation of exact correspondence plan contingent upon partner investigation
 Proper Identification just as commitment of various partners
 Identification of all elements which starts changes in the undertaking plan
 Developing of appropriate change the board plan in the wake of doing investigation of
every characterized factor
10

 Accustoming all colleagues according to the required changes dependent on venture
necessity.
11

f) Compare and comment on the your cost results against the
organisational policy and controlling the risk and explanation to
the sponsor
As indicated by Milosevic and Martinelli (2016), change the executives plan
fundamentally characterizes the two jobs and exercises that required to control and the
executives changes done so as to do controlling and executing phases of a specific task.
Likewise, it additionally talked about that changes is for the most part estimated
dependent on task benchmark count, is otherwise called nitty gritty portrayal of venture
spending plan, degree, arranging and planning actualized to oversee recognized issues
and dangers.
12

Bibliography
Batselier, Jordy, and Mario Vanhoucke. "Improving project forecast accuracy by integrating
earned value management with exponential smoothing and reference class
forecasting." International journal of project management 35, no. 1 (2017): 28-43.
Chen, Hong Long, Wei Tong Chen, and Ying Lien Lin. "Earned value project management:
Improving the predictive power of planned value." International Journal of Project
Management34, no. 1 (2016): 22-29.
Eskerod, Pernille, and Anna Lund Jepsen. Project stakeholder management. Routledge, 2016.
Fleming, Quentin W., and Joel M. Koppelman. "Earned value project management." Project
Management Institute, 2016.
Heldman, Kim. PMP: project management professional exam study guide. John Wiley &
Sons, 2018.
Kerzner, Harold, and Harold R. Kerzner. Project management: a systems approach to
planning, scheduling, and controlling. John Wiley & Sons, 2017.
Larson, Erik W., and Clifford F. Gray. Project management: The managerial process.
McGraw-Hill Education, 2017.
Milosevic, Dragan Z., and Russ J. Martinelli. Project management toolbox: tools and
techniques for the practicing project manager. John Wiley & Sons, 2016.
Schwalbe, Kathy. Information technology project management. Cengage Learning, 2015.
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G. Appendices: Output report, variables and correlation
Output
Totals 50,425
Summary statistics
Probability of meeting base case value 100.00%
Total budget required for 95.0% confidence 21,240
Contingency required for 95.0% confidence -29,185
Cost elements
Base
Case
Mini
mum
Most
Likely
Maxi
mum
Mini
mum
Creating the project scope document
7,200.
00 80% 100% 110% 5,760
Developing the Project Plans
5,760.
00 80% 100% 110% 4,608
Identification of the hardware and software
elements required for the project
1,400.
00 80% 100% 110% 1,120
Identifying the vendors capable of
supplying the elements
2,240.
00 80% 100% 110% 1792
Procurement of elements 1,705.
20 80% 100% 110%
1364.
16
Creating the Website Site-map 1,400.
00 80% 100% 110% 1,120
Creating the Website Site-map
Documents
1,400.
00 80% 100% 110% 1,120
Creating the Front-End Wire-frames Of
the Web application
1,400.
00 80% 100% 110% 1,120
Creating Back End Wire-frames Of the
Web application
1,400.
00 80% 100% 110% 1,120
developing the Database Schema 2,400.
00 80% 100% 110% 1,920
Creating the Database 3,200.
00 80% 100% 110% 2560
Creating the SRS document 800 80% 100% 110% 640
Developing the Home Page 840 80% 100% 110% 672
Developing the Content Pages 840 80% 100% 110% 672
Developing the project information pages 840 80% 100% 110% 672
Developing the Home Section 560 80% 100% 110% 448
Developing the Basic Search 560 80% 100% 110% 448
Developing the Advanced Search 560 80% 100% 110% 448
Developing the Project Listing Section 560 80% 100% 110% 448
Developing of the Admin Login Sections 840 80% 100% 110% 672
14

Admin Settings development 840 80% 100% 110% 672
Content Manager settings development 840 80% 100% 110% 672
Member Manager settings development 840 80% 100% 110% 672
Functional Testing 800 80% 100% 110% 640
Security Testing 800 80% 100% 110% 640
User Acceptance Test 1,600.
00 80% 100% 110% 1280
Developing test reports 800 80% 100% 110% 640
Setup Database 1,200.
00 80% 100% 110% 960
Copy Database 1,200.
00 80% 100% 110% 960
Other Miscellaneous Setting Activities 5,600.
00 80% 100% 110% 4,480
Output
Totals 50,425
1
Correl
ation
15