CPMGT 302 WEEK 2 Performing Risk Analysis

CPMGT 302 WEEK 2 Performing Risk Analysis

What quantitative risk analysis techniques did you learn about in the course, and what are the pros and cons of this technique?

The main quantitative risk analysis techniques discussed in the course are decision tree analysis, Monte Carlo analysis, and sensitivity analysis. I learned that decision tree analysis is a diagram displaying the impact of choosing a specific alternative. One of the advantages of this technique is less need for data preparation because it is not affected by missing information. Decision Tree analysis also helps identify the most important variables and the relationship between the variables quickly (Helms, 2017). The main disadvantage of this technique is that a small change in the data can result in a huge change in the decision tree structure. The second quantitative risk analysis tool studied in the course is Monte Carlo analysis. This technique uses, most likely, optimistic and pessimistic estimates to determine the total cost of a project and completion dates. One of the main advantages of the technique is its simplicity and ability to identify the scope of a problem (Helms, 2017). The main disadvantage is the likelihood of getting poor results if poor constraints or parameters are put in the model. The third technique is sensitivity analysis, which is used to determine the risks with the greatest impact on a project. The main advantage of this technique is the ability to determine the variables with the most impact on the failure or success of the project. This technique also helps properly allocate resources based on the project’s strong and weak areas (Helms, 2017). The main disadvantage of this technique is that it is based on assumptions, and if the assumptions are wrong, the entire analysis becomes wrong, and the future forecast is inaccurate. Another disadvantage is that SWOT analysis does not provide solutions to the identified problems and can generate a wide range of ideas, making it hard to access risk effectively.SWOT analysis also excludes uncontrollable factors, thus creating an incomplete risk assessment. Therefore, a SWOT Analysis may be used alongside another risk analysis tool for effective risk assessment. We offer assignment help with high professionalism.

What qualitative risk analysis techniques did you learn about in the course, and what are the pros and cons of these techniques?

One of the qualitative risk analysis techniques discussed in the course is the probability and impact matrix. This technique rates risks to determine the organization’s ability to recognize the sources of risk and the willingness and ability to manage the risks. The main advantage of this technique is that it is easy to apply because it only requires identifying risk and its impact on the project (Wooldridge, 2014). The second advantage is that it does not require a detailed analysis to identify major risks to the organization or project. The main disadvantage is the lack of objective data to make a concrete decision about risk and its impact on the project (Wooldridge, 2014). Another disadvantage is that it creates a false sense of security on the levels of risk and effectiveness of how the risk is treated. Another quantitative risk analysis technique is SWOT. This technique includes identifying a project’s strengths, weaknesses, opportunities, and threats. One of the advantages of this technique is simplicity due to the fact that it does not require any technical skills (Wooldridge, 2014). The second advantage is cost-effectiveness. The main disadvantage is ambiguity, which arises from using a one-dimensional model in categorizing the strengths, weaknesses, opportunities, and threats.

Why did you select this specific risk analysis technique for the real-world project management example?

The SWOT analysis was selected for the real-world project management example that included Verizon Communication Inc.’s expansion into China. The SWOT analysis method was selected because it would give a clear understanding of the company’s internal environment t and the risks associated with internal operations. The technique would also help identify the opportunities that the company can leverage to be successful in China. The SWOT analysis technique was also selected because it does not require any special skills, thus facilitating the easy and rapid identification of risks that need to be addressed to enhance the success of Verizon Communications Inc. in the new market.SWOT analysis was also selected due to its cost-effectiveness because it does not require extensive research and the application of technical skills. The risk assessment also needed descriptive data on the business environment in China, thus making the SWOT analysis technique ideal.

What specific conditions would need to change in order to consider alternative risk analysis techniques?

One of the conditions that I would need to change to consider alternative risk analysis techniques is classifying risks based on the activities they affect rather than generalizing them as weaknesses, strengths, opportunities, or threats. I would need to list everything despite its impact on the project and then analyze the sources and impact of the risk so that I can come up with effective mitigation measures. I would also need to change the timeline for completing the risk assessment process. Other risk analysis techniques require time to identify and analyze the risk, hence the need for more time. I would also require assistance from someone with expertise in using the techniques to avoid making mistakes that could lead to poor results. I would also need to conduct extensive research to gather as much information related to the project and possible risks as possible so that I do not leave out any important risks.

References

Helms, J. (2017). Quantitative risk analysis. https://doi.org/10.2172/1345342

Wooldridge, M. (2014). Qualitative risk assessment. Microbial Risk Analysis of Foods, 1-28. https://doi.org/10.1128/9781555815752.ch1

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Discuss a real-world project management example with your Learning Team, and determine when you would use one or more of the quantitative or qualitative risk analysis techniques.

Answer the following questions in a 700- to 1,050-word response:
What quantitative risk analysis techniques did you learn about in the course, and what are the pros and cons of these techniques?
What qualitative risk analysis techniques did you learn about in the course, and what are the pros and cons of these techniques?
Why did you select this specific risk analysis technique for the real-world project management example?
What specific conditions would need to change in order to consider alternative risk analysis techniques?