Risk and Procurement Management Assessment 1 - Desklib

This presentation covers the risk management plan, identification of risks and risk register for mitigating them, usage of Monte Carlo simulation and their usage in decision-making for the case study of Terminal 5 project. Effective risk and procurement strategy can help to overcome any risk.

RISK AND PROCUREMENT MANAGEMENT ASSESSMENT 1

TABLE OF CONTENTS
INTRODUCTION
MAIN BODY
 RISK MANAGEMENT PLAN
INTERPRETATION
 Identification of risks and risk register for mitigating them
 Usage of Monte Carlo simulation and their usage in decision-making
CONCLUSION
REFERENCES

INTRODUCTION Risk can be understood as a future uncertainty
about veering the awaited earning or the
awaited outcomes. Risk creates the overall impact over the
project, due to this there might chances for
human life loss. Procurement process define as the discipline
spanning which manage all the interrelated
activities of the business. Procurement risk management guard the
organisation from the anticipated risks.

MAIN BODY
RISK MANAGEMENT PLAN
Identified risk Probability of the risk Mitigation strategies/ tools
Financial risk High Suitable designing of budget as well as to
use worksheets, budget implementation
tools
Information Medium Secure it on computer, data backups.
Multiple suppliers High Involve the partners in the risk planning,
ensure the quality of supply, diversify
suppliers.
Communication risk High Have trust and transparency in message
delivery, use digital tools as email, other
software to develop interaction.
Operational cost risk Medium Prepare strategy and research first to
reduce the cost
Contract risk Medium Enhance the compliance with clauses,
secure the contract with data encryption.

INTERPRETATION It is identified from the above risk management
plan that these are the risk which may encounter
during the project. KPI for measuring the risks are- Gross profit margin KPI for the financial risk, for
the BBA's project, in this project manager can
proceed to use the Gross profit indicator for
measuring the finance. It refer as how much revenue does achieve on the
sales before the expenses. In this Supplement agreement define the part in

Identification of risks and risk register for
mitigating them
On the basis of case study of BAA, it can be said that it is facing procurement and supply chain related problems and for solving such
problems, it has developed its own T5 agreement with the main aim of engaging suppliers and team members
Types of risks Likelihood to occur Impact of risks Mitigation actions
Traditional procurement High High By changing the way of performing functions, this risk can be
mitigated.
Financial risks High High It is important for this company to make use of just in time and
total quality management approaches by which it can protect
itself from additional inventory and warehousing costs.
Insurance risks Medium High For mitigating this risk, this company has already developed its
own T5 agreement in which it has mentioned all legal
requirements along with insurance.
Supplier performance Medium High T5 agreement is one of the best ways of improving performance
of suppliers. This agreement can help out suppliers in knowing
their roles and responsibilities.
Along with this, manager of this company can engage suppliers
in all important decision making process in order to make them
feel valued.

Usage of Monte Carlo simulation and their
usage in decision-making
Monte Carlo basically a simulation technique to modelling the waiting times and queue length and also to determine the
complete uncertainty in projects. The planning and execution of major airport program i.e. Terminal 5 at Heathrow can
be highly complex and required lots of planning expertise, legal and environmental information, good design structure
and appreciation for serviceable features. With the help of Monte Carlo simulation the project is appropriately able to
engage their suppliers.
It helps to generate commercial management for aviation programmes that may vary with scale. Hence, this project also
requires strategy, acumen, insight and a detailed understanding about the process in order to achieve success. There are
certain key factors that greatly prompt the airport development such as: Capacity and traffic demand projection Key considerations in terms of revenue, capital, aeronautical and non-aeronautical revenue. Restrictive requirements Enhance return for investors

CONCLUSION
From the above report it is concluded that the effective risk and procurement
strategy can help out to overcome any risk.
This report mainly covers the case study which is for about the terminal
project.
The following study has identified the risk which can be determined and
mitigate properly in order to reach to the project success.

REFERENCES
 Books and Journals
 Wu, F. and et.al 2020. Risk-Averse Portfolio Procurement Strategy Under Large-Scale
Promotion Online. IEEE Transactions on Engineering Management.
 Damayanti, E. and Nasihien, R.D., 2020. Risk Management Of EPC (Engineering
Procurement Construction)“Siberut Agregated Biomass Gasification Power Plant”
Project in Civil Engineering Design Stage. In Journal of World Conference (JWC) (Vol.
2, No. 1).