1-15.4 Risk Analysis

Risk analysis involves the following major activities:

  1. Evaluate the properties of a risk to determine the expected impact and probability of the risk’s occurrence. Each risk is categorized as high, medium, or low, based on the impact of the risk on the various project elements (e.g., cost, schedule, and quality).
  2. Determine the likely time frame during which the risk can be expected to occur.
  3. Determine the probability of risk occurrence. Probability is categorized as high, medium, or low, based on the likelihood that the risk will occur.
  4. Based on risk impact, probability, and time frame, determine critical risks and those of the highest priority. It is important to note that priorities change throughout project execution, and it is critical to continually review risks and prioritization.

Analysis of risk factors continues throughout the execution of the project as conditions change. Issues, changes, schedule delays, defects, and staffing anomalies are a few examples of the conditions that may arise that could affect risk.