Risk Management Models for Use by the Project Manager Essay

2411 Words Nov 1st, 2012 10 Pages
UNIVERSITY OF JOHANNESBURG

RISK MANAGEMENT MODELS FOR USE BY THE PROJECT MANAGER

A research paper submitted in partial fulfilment of the requirements for the subject

PJB4088 – Project Management

at the

UNIVERSITY OF JOHANNESBURG

Student Name: Lusanda Njenge Student Number: 201109115 Date: 15th October 2012

Table of Contents ABSTRACT 2 1. INTRODUCTION 2 2. LITERATURE REVIEW 2 2.1 What is a Risk 2 2.2 Risk Management 3 3. RISK MANAGEMENT MODELS 4 3.1 Risk Cube 4 3.2 Risk Burndown Chart 5 3.3 GANTT Chart and Milestone Chart 5 3.4 PERT or CPM 6 3.5 PRA 7 3.6 SWOT Analysis 7 3.7 GAP Analysis 7 3.8 Value Chain Analysis 8 3.9 FMEA or FMECA 8
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The goal in project management is to reduce the probability as well as the impact of the risk by identifying hazards and putting safety measures in place.

3.2 Risk Management
Risk management is “the systematic process of identifying, analyzing, and responding to project risk”. Risk is managed using seven subprocesses, namely (1) risk management planning, (2) risk identification, (3) qualitative risk analysis, (4) quantitative risk analysis, (5) risk response planning, (6) risk monitoring and control, and (7) the risk management register [ [3] ]. Risk management planning entails planning a strategy to manage risk in the project. Risk identification is done to recognize the risks that the project can encounter as well as documenting them. A qualitative risk analysis is done to prioritise the risk’s influence on project goals. A quantitative risk analysis is done to approximate the likelihood and effect of risk and their impact on the project. Risk response planning is done in order to develop methods to decrease threats and increase the chances of project success. Project monitoring and control is done to identify new risks, carry out risk reduction plans and monitor their effectiveness. The risk management register is a permanent documentation of identified risks and methods that were used to alleviate or remove them [ [3] ].

As implied by the seven risk management subprocesses,

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