Quantitative and Qualitative Risk Assessment Techniques

This assignment discusses various quantitative and qualitative risk assessment techniques used in project management. It covers techniques like sensitivity analysis, decision tree, expected monetary value analysis, and qualitative risk assessment methods including brainstorming, Delphi technique, SWIFT analysis, and SWOT analysis. The purpose of these techniques is to identify, analyze, and evaluate risks associated with a project to make informed decisions.

Quantitative Risk Assessment
Quantitative risk assessment is an assessment that asses numerically the overall effect of all
identified project risks on project objectives. It calculates an exact monetary impact on a project, in
case a risk materializes, and its probability as a percentage.
There are several techniques in quantitative risk assessment.
Sensitivity Analysis
A quantitative risk analysis and modeling technique used to help determine which risks have the
most potential impact on the project. It examines the extent to which the uncertainty of each project
element affects the objective being examined when all other uncertain elements are held at their
baseline values. The typical display of results in the form of tornado diagram.
 The longer the bar, the more sensitive the project objective is to the risk.
 The risks are presented in descending order with the largest impact on the top and the least
impact on the bottom.
 It allows the team to focus on those risks with the greatest impact on a project objective.
Decision Tree
 A diagramming and calculation technique for evaluating the implications of each of the available
choices and possible scenarios. It incorporates the cost of each available choice the probabilities
of each possible scenario and the reward of each alternative logical path.
 Solving the decision tree provides the EMV (or other measure of interest to the organization) for
each alternative, when all the rewards and subsequent decisions are quantified.
Expected Monetary Value Analysis (EVM)
 EMV analysis is statistical concept that calculates the average outcome when the future includes
scenarios that may or may not happen. (I.e. analysis under uncertainty)
 The EMV of opportunities will generally be expressed as positive values, while those of risks
will be negative.
 EMV is calculated by multiplying the values of each possible outcome by its probability of
occurrence, and adding them together.
 A common use of this type of analysis is in decision tree analysis. Modeling and simulation are
recommended for use in cast and schedule risk analysis, because they are more powerful and less
subject to misuse that EMV analysis.

Qualitative Risk Assessment
A technique used to quantify risk associated with a particular hazard. A scenario based
methodology that uses different threat vulnerability scenarios to try and answer “what if” type
questions.
These assessments are subjective in nature. There are several techniques when performing
qualitative risk analysis to determine the probability and impact of risks.
Brainstorming
 Brainstorming involves a group of people working together to identify potential risks, causes,
failure modes, hazards and criteria for decisions and/or options for treatment.
 Brainstorming should stimulate and encourage free-flowing conversation amongst a group of
knowledgeable people without criticizing or rewarding ideas.
Delphi Technique
This is also form of risk brainstorming, but the essential difference between traditional risk
brainstorming and applying the Delphi Technique is that the Delphi Technique makes use of expert
opinion to identify, analyze and evaluate risks on an individual and anonymous basis.
SWIFT Analysis
It is standard for “Structured What- If Technique”, this is a simplified version of a HAZOP. SWIFT
applies a systematic, team based approach in a workshop environment, where the team investigates
how changes from an approved design, or plan, may affect a project through a series of “What if”
considerations. This technique particularly useful in evaluating the viability of opportunity risks.
SWOT analysis
Strengths: List the advantages you and your team have that will help you reach project goals. It's
important to know our special skills that give it an advantage.
Weaknesses: List anything internal to your organization or team that could prevent you from
meeting objectives. Something that gives you a disadvantage relative to others.
Opportunities: An external situation or fact that could lead to a positive outcome in meeting
objectives. Anything that could lead to a positive outcome.
Threats: external elements that could jeopardize your project.
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References
 https://www.project-risk-manager.com/blog/qualitative-risk-techniues/
 https://en.m .wikipedia.org/wiki/Qualitative_risk_analysis
 https://study.com/academy/lesson/quantitative-risk-analysis-process-techniques-tools.html
 https://www.dummies.com
 https://project-management-knowledge.com/definitions/q/quantitative-risk-analysis-
modelling-techniques
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