Risk management - Quantitative method
Quantitative method
This approach is based upon the project plan (schedule) which has been put together by considering not only all of the individual tasks but including their relationships.
The risk management process will begin with the summary ‘initial’ plan and develop the ‘reference’ and ‘base’ plan.
It uses data that already exists in assessing the risk of not completing a task and the potential costs.
The units of risk measurement will be the same as for the durations and cost measurements.
This makes it much easier for individuals to gauge the risk and to come to informed decisions.
We have already seen quantitative methods being employed for ‘full positive correlation’, ‘full negative correlation’, ‘independent correlation’ and ‘conditional correlation’.
Further simple examples of this in practice are provide elsewhere [see Quantitative part 2].
In summary:
- Based upon plans already in use
- Uses cost and schedule breakdown information
- Measures risk in the same units as task durations and costs
- Easily informs decision making for milestone dates and budgets