Professional Documents
Culture Documents
School Publishing
harvard
Managementupdate
Managing Project Risk
by Loren Gary
The Essentials
Managing Project Risk
by Loren Gary
Make an estimate of the negative impact of each risk, and express it in dollar terms.
Assign a probability to the risk,
and express it as a percentage.
Calculate the expected value by
multiplying the monetary impact by the probability. Thus, a
one-month delay in the schedule that is estimated to cost
$25,000 and has a 40% probability of occurring will have an
expected value of $10,000.
Rank your audit list by the expected value.