Your project has several risks that may cause serious financial impact if they occur. You have studied the risk events and made some potential risk responses for the risk events but management wants you to do more. They'd like you to create some type of a chart that identified the risk probability and impact with a financial amount for each risk event. What is the likely outcome of creating this type of chart?
The likely outcome of creating a chart that identifies risk probability and impact with a financial amount for each risk event is to perform quantitative analysis. This analysis involves assigning numerical values to both the probability of occurrence and the potential financial impact of each risk. The process helps in understanding the potential financial consequences associated with each risk and aids in prioritizing risks and developing appropriate responses. Such charts are a key component of quantitative risk analysis, which is used to estimate the potential impacts of risks on project objectives.
The likely outcome of creating a chart that identifies risk probability and impact with a financial amount for each risk event would be: D. Quantitative analysis. This type of chart allows for a quantitative assessment of the risks by assigning numerical values to both the probability of occurrence and the potential impact, often in financial terms. Quantitative analysis helps in prioritizing risks based on their potential impact on the project's objectives and allows for better decision-making regarding risk response strategies. It provides a clear understanding of the potential financial consequences associated with each risk event, aiding in the allocation of resources and the establishment of contingency reserves if needed.