PJM480 Project Risk Factor, Project risk can be simply defined

PJM 480 CSUGC Project Risk Factor Critical Thinking Paper

OPTION #1: PROJECT RISK FACTOR

Project risk can be simply defined as any possible event that can negatively affect the viability of a project and can be computed using the simple relation:

Project Risk = Probability of event * Consequences of event

Let’s investigate the quantitative risk identified for a company, last year.

Use the table above to answer the following questions:

1. Please calculate the total risk factor for this project. Would you assess this level of risk as low, moderate, or high? Why?

(Hint: Total Risk Factor = (Pf + Cf) – (Pf*Cf) Where P = Average probability of failure and C = Average Consequences of Failure. A common rule of thumb assigns any project with a Risk Factor of below 0.30 as low risk, with a Risk Factor of between 0.30 and 0.70 as medium risk, and Risk Factor over 0.7 as high risk).

1. What are all the risk mitigation strategies available to this company (in the example above)? What specific mitigation options would you recommend to the corporation?
2. To reduce the total risk factor by one level (i.e., High to Medium or Medium to Low) what would be your focus among the four probabilities of failure and four consequences of failure listed?

• If you were to prioritize your efforts, which risk factors would you address first? Why?

1. Explain the meaning of the following sentence: Reduction of risk factors is not cheap.

Your responses should be integrated in a well-written paper that meets the following requirements:

• Be 2-3 pages in length plus graphical elements, placing these graphical elements in an appendix,
• Be formatted according to the CSU Global Writing Center (Links to an external site.), and
• Include two scholarly sources from the CSU Global Library (Links to an external site.).