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Risk Identification
Risk Management Planning Risk Identification

Risk Classification
Risk Quantification Risk Qualification

Risk Analysis

Risk Response Tasks

Source: Flanagan and Norman 1993

Risk Response Planning

Risk Monitoring and Control

Source: Project Management Institute 2004

Integrated Cost and Schedule Risk Management - PERTMASTER


Risk Analysis Technique
Program Evaluation and Review Technique (PERT) Schedule Risk System (SRS) Judgemental Risk Analysis Process (JRAP) Estimating using Risk Analysis (ERA) Utility Functions in Engineering Performance Assessment Computer Aided Simulation for Project Appraisal and Review (CASPAR) Failure Modes and Effects Analysis (FMEA) Advanced Programmatic Risk Analysis and Management (APRAM) Model Integrated Cost and Schedule Risk Analysis PERTMASTER
Source: Imbeah and Guikema 2009

Addresses Schedule Risk

Yes Yes Yes No No Yes Yes Yes Yes

Addresses Budget/ Cost Risk

No No No Yes No Yes Yes Yes Yes

Addresses Technical/ Quality Risk

No No No No Yes No Yes Yes No

J. Contr. Engg. Mgmt. Int. J. Proj. Mgmt. J. Mgmt. in Engg. Contr. Mgmt. and Econom. Advances in Engg. Software Build. and Envt. Risk Management

JRAP Development in Construction Projects Oztas and Okmen 2005 JRAP Judgmental Risk Analysis Process
Update the Model Control the progress Respond to Risks

Risk Analysis JRAP

Experience and Engineering Judgment

MS Excel

Decide the Critical Risks Effective on Activity Durations

Risks Affecting Critical Activities

Assign Probability Distributions and Max-Min Durations

Establish Activity-Risk Factor Matrix

Model Stochastic Time Schedule Plan of the Project

Run Monte Carlo Simulation


Crystal Ball

MS Project


Identify the Risks

Model Deterministic Time Schedule Plan of the Project

Exploring Monte Carlo Simulation Applications for Project Management Kwak and Ingall 2007

Monte Carlo Simulation A technique that computes or iterates the project cost or schedule many times using input values selected at random from probability distributions of possible costs or durations, to calculate a distribution of possible total project cost or completion dates. (PMI 2004) Used during risk quantification process.

Time Management MCS is applied to quantify the confidence the project manager should have in the target completion date or total project duration.

Cost Management Project manager can use MCS to better understand project budget and estimate final budget at completion.

Program and Portfolio Management When making capital budgeting and investment decisions, MCS assists managers in choosing among different potential investments and projects.

Construction Project Network Evaluation with CSRAM Okmen and Oztas 2008 CSRAM Correlated Schedule Risk Analysis Model
Next Iteration (@Risk) Random Number Generation #1 (@Risk) Start Simulation Iteration #1 (@Risk) Obtain Risk Factor Situations (MS Excel) Input (MS Excel)

No Interpret Results (@Risk) Yes All Iterations Completed? (@Risk)

Save Results (@Risk)

Random Number Generation #2 (@Risk)

Perform Forward/ Backward CPM Pass (MS Excel)

Obtain Activity Durations (MS Excel)

Obtain Duration Coefficients of Activities (MS Excel)

Methodology for Integrated Risk Management and Proactive Scheduling of Construction Projects Schatteman et al. 2008

Graphical User Interface (GUI)

Estimating Project Activity Data Risk Risk Identification Management Risk Analysis Framework Risk Responses

Constructing Project Network

Proactive Scheduling System

Quality Robustness Solution Robustness

Generating Risk Profiles

Deriving Individual Activity Risk Profiles

Heuristic Buffer Insertion Algorithm - Starting Time Criticality (STC) - 99% certainty that the project delivery date will be met.

Validating Estimates

Quantifying Schedule Risk in Construction Projects using BBNs Luu et al. 2009

P(B/A) = P(A/B) x P(B) / P(A)

BBNs Bayesian Belief Networks

Prelim Identification of Delay Factors

Formally Identify Delay Factors Considering Project Conditions

Design Questionnaires and Collect Data

Evaluate and Rank the Importance of Delay Factors

No Are the Ranks Appropriate?


Determine Preliminary Relationships among Factors

Develop a Diagram to describe Relationships among Factors

Rank Cause-andEffect Relationships among the identified Factors

No Develop a BBN Model to Quantify Risks of Time Overruns Estimate and Assign the Conditional Probabilities to Factors Compute the Probabilities of Construction Delay using MSBNx Software Is the Model Validated? Yes Draw Conclusions and Recommendations

Managing Construction Projects using the APRAM Model Imbeah and Guikema 2009 APRAM - Advanced Programmatic Risk Analysis and Management

Addresses Cost, Schedule and Quality risk

Identify Possible System Configurations

Select Utility Maximising Design

Determine Resource Increase Needed

Allocating scarce project resources

Identify Alternate Component Choices

Optimise Management Reserves for each Configuration

Are Failure Probabilities Acceptable?

Select Min. Cost Component Set for Each Alternative

Optimise Technical Design for Each Configuration

Proceed to Next Phase of Project