Unit 6

Assignment 1

Quantifying Risk and Its Impact

IT301: Project Management

Purdue University Global

Gatlinburg Vacation Risk Assessment

Defined Conditions for Impact Scales of a Risk on Major Project Objectives

(Examples are shown for negative impacts only)

Project

Objective

Very low / 0.05

Low / 0.10

Moderate / 0.25

High / 0.40

Very High / 0.80

Cost

Insignificant cost

increase

<

10% Cost Increase

10

- 25% cost

increase

25

- 40% Cost

Increase

>40

% Cost

Increase

Time

Insignificant time

increase

<

5% Time Increase

5

- 10% Time

Increase

10

- 20% Time

Increase

>

20% Time

Increase

Scope

Scope decrease

barely noticeable

Minor Areas of scope

affected

Major areas of scope

affected

Scope reduction

unacceptable to

sponsor

Project end item is

effectively useless

Quality

Quality degradation

barely noticeable

Only very demanding

applications are

affected

Quality reduction

requires sponsor

approval

Quality reduction

unacceptable to

sponsor

Project end item is

effectively useless

This table presents examples of risk impact definitions for four different project objectives

Discussing the 5 major risk events in this project will determine whether or not the Vacation is a go

depending on the severity of the event.

Event 1–Car accident: rating=.25 This event has the greatest potential to cancel the vacation depending on the severity of the accident. The monetary loss may exceed .25 percent. It will affect all areas of the Vacation including the end of the Vacation.

Event 2 – Getting Robbed or Mugged: Rating=.25

This event also has the greatest risk of canceling the vacation depending on the severity of the incident. The monetary loss may exceed 25 percent, but the risk of injury or injury is even higher and can cause cancelation of the vacation.

Event 3 – Weather: Rating=.01

Although this event has a low impact on the project. It has no risk of canceling the vacation. No insignificant increases in time, but certain events need to be rescheduled if weather conditions arise.

Event 4 – Injury: Rating=.05

This event has a medium likelihood of occurrence and will have a major impact on the vacation. The monetary impact can be high and the time we spend in Tennessee either at the hospital or recovering from the injury can be increased. This will increase the monetary impact as well. It is possible to determine whether the vacation is canceled or not depending on the injury.

Event5 – Key Personnel getting sick: Rating=.05

This event has a medium likelihood but will have a big impact on the vacation. The monetary impact can be high and the time we spend in Tennessee either at the hospital or recovering from the disease can increase. This will increase the monetary impact as well. It is possible to determine whether the vacation is canceled or not depending on the injury.

Except for the quality of the vacation, the remaining risk events have little or no impact on the vacation.