Updated: Aug 7, 2022
In a quantitative risk analysis, the net effect of risk on project goals including budget and schedule targets is quantified. The findings are utilized to establish risk mitigation plans and providing guidance for strategy implementation.
3 Reasons - Why is Quantitative Risk Analysis Performed
1. Improved Project Risk Analysis methodology
The qualitative risk analysis rates unique risks. Using a quantitative approach, we can assess the entire project risk based on both the individual risks and corresponding related risk sites.
2. Enhanced Approximations
A quantitative risk assessment provides you with the information you really need to precisely anticipate future consequences or gauge your chances of achieving your goals.
3. Better project risk analysis techniques
Quantitative risk analysis offers more factual facts and statistics than qualitative analysis does for outcomes that are more important. The quantitative analysis is indeed an approximation even though it is more objective.
What does 6 Popular Quantitative Risk Analysis tools and techniques teach us:
1. Three Point Estimate method chooses the best estimate by combining the optimistic, most likely, and pessimistic values.
2. Monte Carlo Analysis is a method for estimating project costs and completion dates by comparing optimistic, most likely, and pessimistic forecasts.
3. Sensitivity Analysis is a method for identifying the risks that will have the most influence on a venture.
4. Fault Tree Analysis examines a structured diagram to find components that could lead to structural failure.
5. Decision Tree Analysis is a graphical representation that illustrates the effects of selecting one possibility over another.
6. Expected Monetary Value is a technique for determining the reserve funds for a project's expenditure and timetable.
When should you Conduct Quantitative Risk Analysis?
• Serious, intricate tasks that demand numerous steps
• Operations where organization requests more information regarding the likelihood that it will be finished on time
• Tasks that demand a budget and schedule contingency reserve