Quantitative Risk Analysis: Measure the risk impact using specified project management techniques that align quantitative risk factors to the qualitative risk analysis. You can add monetary or time elements to the risks from the qualitative risk analysis.
EMV is a statistical technique that calculates the average or expected outcome when the future includes scenarios that may or may not happen. It translates the risk's qualitative impact into a dollar value.
EMV=P×Impact Cost
Application to R005 (Delayed Component):
We estimate the financial impact using a conservative range (e.g., a 75% probability):
Best Case Cost Impact (Cmin): $15,000 (Expedited shipping fee).
Worst Case Cost Impact (Cmax): $45,000 (Two weeks of idle specialized labor and late penalty).
Most Likely Cost Impact (CML): $30,000 (One week of idle labor).
Using the Most Likely scenario:
Quantitative Risk Analysis (QRA) is the process of numerically analyzing the effect of identified risks on overall project objectives. It translates the probability and impact ratings from the Qualitative Risk Analysis into measurable terms like time (schedule) and cost (budget).
Here is a plan to measure the risk impact using specified project management techniques, aligning QRA factors with a hypothetical qualitative analysis.
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