quantitative project risk analysis- methodologies, work flows, and tools_lev virine

8/2/2019 Quantitative Project Risk Analysis- Methodologies, Work Flows, And Tools_Lev Virine

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Quantitative Project Risk Analysis:Methodologies, Workflows, and Tools

Lev Virine, Ph.D.President

Intaver Institute Inc.





3

Input Parameters Output Parameters

Calculation

Engine

Critical Path

Scheduling

Engine

(

)

Task durationcost, finish time,etc.

cost, finish time,etc.

Project duration

Technology Pushor

Industry Need



4 5 6321 7 7 82 3 654 1 4 5 632 7

8 9 10 11 12 13 14 15 16

1

2

3

4

5

6

7

Task 1

Task 2Task 3



Statistical distribution ofproject duration and cost

Crucial tasks

Success rate

Probabilistic and conditionalbranching



Takes into an account only schedules-related uncertainties

What distribution should be used?



Activity 1

Activity 2 Event 3

Event 2Event 1

Activity 3

Event chain



Event Methodology allows to determinecritical risks in addition to results of„classic‟ Monte Carlo Simulations



Reliable historical data

Experienced experts and established

judgment elicitation processActual project performance tracking

Otherwise use EventChain Methodology



Can be implemented based on Multi-

Criteria Decision Making Methodologies,for example

Multi-attribute utility theory (MAUT)

Simple multi-attribute rating technique(SMART)

Analytical Hierarchy Process (AHP)

Outranking approach



NASA initiates the use of MCDA methods specifically theanalytical hierarchy process for the selection of projects atKennedy Space Center

USA and Russia evaluate plutonium disposition optionsusing multi-attribute utility theory

IT industry uses analytic hierarchy process for projectportfolio management, particular to build cross-prioritizedportfolio lists

Computer manufactures are using multi-criteria decision-making methodologies and tools for advanced project

portfolio management



RiskCategories

Risk

Outcomes



Pair-wise comparison matrix:

Importance of the

category



Risk fromrisk register

Probabilities and

outcomes formutually exclusive

alternatives



One risk may belong to different categories.For example, delay in financing may affect

quality and scheduleNon-schedule risks will be assigned asglobal. Project schedule is not required if allrisks are global



Calculated impact

for all categories

Calculated risk

probability

Score = Probability *

Outcome



Baseline is asnapshot of

the schedule

Baselines and be

create based onoriginal (deterministic)schedule or results of

calculation



Pre-mitigationprobability, impact

and score

Post-mitigationprobability, impact, and

score



Lady Washington, Seattle, USA

HMS Interceptor

http://upload.wikimedia.org/wikipedia/commons/d/dc/Lady_Washington.jpg



Ship selection

Ship transportation from Grays Harbor, WA:40-day voyage beginning December 2, 2002, arriving onlocation on January 12, 2003

Crew training

Actual shooting

Voyage back

Phases of the project:



Takes into an account schedule or non-schedule risks using different weights

Easy to use analysis of mitigation efforts

Event-based and distribution-baseduncertainties



Questions/Comments

24

“PMI” is a registered trade and service mark

of the Project Management Institute, Inc.




Contact Information

25

Name Lev Virine

Title Quantitative Project Risk Analysis: Methodologies,Workflows, and Tools

Company Intaver Institute Inc.

Email Address [email protected]

Phone Number +1 (403) 692-2252

“PMI” is a registered trade and service mark


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