Quantitative Risk Analysis and Modeling Techniques:
Sensitivity analysis -> Tornado diagram
Expected monetary value analysis -> Statistical Concept; Decision tree analysis;
Modeling and simulation -> Monte Carlo technique
Contingent Response Strategies: Some responses are designed for use only if certain events occur. For some risks, it is appropriate for the project team to make a response plan that will only be executed under certain predefined conditions, if it is believed that there will be sufficient warning to implement the plan. Events that trigger the contingency response, such as missing intermediate milestones or gaining higher priority with a supplier, should be defined and tracked. Risk responses identified using this technique are often called contingency plans or fallback plans and include identified triggering events that set the plans in effect.
Claims Administration: Contested changes and potential constructive changes are those requested changes where the buyer and seller cannot reach an agreement on compensation for the change or cannot agree that a change has occurred. These contested changes are variously called claims, disputes, or appeals. Claims are documented, processed, monitored, and managed throughout the contract life cycle, usually in accordance with the terms of the contract. If the parties themselves do not resolve a claim, it may have to be handled in accordance with alternative dispute resolution (ADR) typically following procedures established in the contract. Settlement of all claims and disputes through negotiation is the preferred method.
Degree of accuracy of estimations:
Rough Order of Magnitude (ROM) Estimate: within the range of -25% to +75%
Preliminary estimate: within the range of -15% to +50%
Budget estimate: within the range of -10% to +25%
Definitive Estimate: within the range of -5% to +10%
Final estimate: 100% accurate
In the earned value management technique, the cost performance baseline is referred to as:Performance Measurement Baseline (PMB)
Negotiations: The objective of negotiations is to obtain a fair and reasonable price and develop a good relationship with the seller.
Some of the negotiation tactics are:
Attacks; If your organization cannot provide the right details for the bid, perhaps it should have not sent a response to our RFP!
Personal insults; If you cannot perform even after 10 months of being in the organization, you should leave!
Good guy/bad guy; one person is helpful to the other side, while the other is difficult to deal with.
Deadline; We need the closure of this task by 4:30 pm today.
Lying; Lying may be hidden. It may also be obvious.
Limited authority; limited authority statements may or may not be true.
Missing man; act as if the decision maker is not available and the current options are better.
Fair and reasonable; being impartial and practical
Delay; delay the point, discussion or decision to a later date.
Extreme demands; these demands are not appropriate for the given contract.
Withdrawal; lessening of interest shown by emotional or physical withdrawal.
Fait accompli; this is a done deal.
Scope, schedule and price are the main items to negotiate in the contract. Other than these, other items include responsibility, authority, applicable law, project management process, payment schedule, among others.
Noncompetitive Forms Of Procurement: Sometimes, work is awarded to a company without competition. The situations include:
Project manager is under extreme pressure
Seller has unique qualifications
There is only one seller who can provide goods and services
Seller holds patent for the items you need
Other mechanisms exist to ensure sellers prices are reasonable
Non-competitive procurements may include:
Single Source - A contact is established directly with a preferred seller without going through the procurement process.
Sole Source - In this type of procurement, there is only one source.
Alternative Analysis - While planning, one can find different ways to achieve the goal or carrying out an activity. Alternative Analysis technique is one of the ways to get resources in different ways to accomplish the activities. For example: different skills, different configuration of machines, automation, outsourcing, etc…
Alternative Analysis is the technique used under the process Estimate Activity Resources process.
Schedule compression techniques include - Crashing, Fast Tracking
Unplanned training takes place as a result of observation, conversation, and project performance appraisals conducted during the controlling process of managing the project team.
A RBS (Resource Brakdown Structure) can be aligned with Organization’s accounting system - BEST used to track project costs
Lag - “The amount of time whereby a successor activity is required to be delayed with respect to a predecessor activity”
Lead - “The amount of time whereby a successor activity can be advanced with respect to a predecessor activity”
*** Lag always describes delay, which means addition of time and denoted by “+“ sign in the network diagram
*** Lead always describes advancement, which means reduction in time taken and denoted by “-“ sign in the network diagram
The list of risks that are identified and recorded in the risk register drives the following risk management processes specified in the PMBOK® Guide:
- Perform Qualitative Risk Analysis
- Perform Quantitative Risk Analysis
- Plan Risk Response
- Monitor and Control Risk
Depreciation - The three most common methods are as follows.
1. Straight Line Depreciation
2. Sum of Years [accelerated depreciation]
3. Double Declining Balance [accelerated depreciation]
The buyer-seller relationship can exist at many levels on one project, and between organizations internal to and external to the acquiring organization.
Risk Data Quality Assessment: This tool focuses on making sure that the information we are using to perform the risk analysis activities is unbiased and credible. This is because; conducting risk analysis using poor quality data may result in results that are useless.
Quantitative risk analysis & modeling techniques: Both event-oriented and project-oriented analysis approach
Risk Reassesment - identification of new risks, reassessment of current risks, and the closing of risks that are outdated.
Sensitivity analysis -> Tornado diagram
Expected monetary value analysis -> Statistical Concept; Decision tree analysis;
Modeling and simulation -> Monte Carlo technique
Contingent Response Strategies: Some responses are designed for use only if certain events occur. For some risks, it is appropriate for the project team to make a response plan that will only be executed under certain predefined conditions, if it is believed that there will be sufficient warning to implement the plan. Events that trigger the contingency response, such as missing intermediate milestones or gaining higher priority with a supplier, should be defined and tracked. Risk responses identified using this technique are often called contingency plans or fallback plans and include identified triggering events that set the plans in effect.
Claims Administration: Contested changes and potential constructive changes are those requested changes where the buyer and seller cannot reach an agreement on compensation for the change or cannot agree that a change has occurred. These contested changes are variously called claims, disputes, or appeals. Claims are documented, processed, monitored, and managed throughout the contract life cycle, usually in accordance with the terms of the contract. If the parties themselves do not resolve a claim, it may have to be handled in accordance with alternative dispute resolution (ADR) typically following procedures established in the contract. Settlement of all claims and disputes through negotiation is the preferred method.
Degree of accuracy of estimations:
Rough Order of Magnitude (ROM) Estimate: within the range of -25% to +75%
Preliminary estimate: within the range of -15% to +50%
Budget estimate: within the range of -10% to +25%
Definitive Estimate: within the range of -5% to +10%
Final estimate: 100% accurate
In the earned value management technique, the cost performance baseline is referred to as:Performance Measurement Baseline (PMB)
Negotiations: The objective of negotiations is to obtain a fair and reasonable price and develop a good relationship with the seller.
Some of the negotiation tactics are:
Attacks; If your organization cannot provide the right details for the bid, perhaps it should have not sent a response to our RFP!
Personal insults; If you cannot perform even after 10 months of being in the organization, you should leave!
Good guy/bad guy; one person is helpful to the other side, while the other is difficult to deal with.
Deadline; We need the closure of this task by 4:30 pm today.
Lying; Lying may be hidden. It may also be obvious.
Limited authority; limited authority statements may or may not be true.
Missing man; act as if the decision maker is not available and the current options are better.
Fair and reasonable; being impartial and practical
Delay; delay the point, discussion or decision to a later date.
Extreme demands; these demands are not appropriate for the given contract.
Withdrawal; lessening of interest shown by emotional or physical withdrawal.
Fait accompli; this is a done deal.
Scope, schedule and price are the main items to negotiate in the contract. Other than these, other items include responsibility, authority, applicable law, project management process, payment schedule, among others.
Noncompetitive Forms Of Procurement: Sometimes, work is awarded to a company without competition. The situations include:
Project manager is under extreme pressure
Seller has unique qualifications
There is only one seller who can provide goods and services
Seller holds patent for the items you need
Other mechanisms exist to ensure sellers prices are reasonable
Non-competitive procurements may include:
Single Source - A contact is established directly with a preferred seller without going through the procurement process.
Sole Source - In this type of procurement, there is only one source.
Alternative Analysis - While planning, one can find different ways to achieve the goal or carrying out an activity. Alternative Analysis technique is one of the ways to get resources in different ways to accomplish the activities. For example: different skills, different configuration of machines, automation, outsourcing, etc…
Alternative Analysis is the technique used under the process Estimate Activity Resources process.
Schedule compression techniques include - Crashing, Fast Tracking
Unplanned training takes place as a result of observation, conversation, and project performance appraisals conducted during the controlling process of managing the project team.
A RBS (Resource Brakdown Structure) can be aligned with Organization’s accounting system - BEST used to track project costs
Lag - “The amount of time whereby a successor activity is required to be delayed with respect to a predecessor activity”
Lead - “The amount of time whereby a successor activity can be advanced with respect to a predecessor activity”
*** Lag always describes delay, which means addition of time and denoted by “+“ sign in the network diagram
*** Lead always describes advancement, which means reduction in time taken and denoted by “-“ sign in the network diagram
The list of risks that are identified and recorded in the risk register drives the following risk management processes specified in the PMBOK® Guide:
- Perform Qualitative Risk Analysis
- Perform Quantitative Risk Analysis
- Plan Risk Response
- Monitor and Control Risk
Depreciation - The three most common methods are as follows.
1. Straight Line Depreciation
2. Sum of Years [accelerated depreciation]
3. Double Declining Balance [accelerated depreciation]
The buyer-seller relationship can exist at many levels on one project, and between organizations internal to and external to the acquiring organization.
Risk Data Quality Assessment: This tool focuses on making sure that the information we are using to perform the risk analysis activities is unbiased and credible. This is because; conducting risk analysis using poor quality data may result in results that are useless.
Quantitative risk analysis & modeling techniques: Both event-oriented and project-oriented analysis approach
Risk Reassesment - identification of new risks, reassessment of current risks, and the closing of risks that are outdated.
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