Project Management

Please login or join to subscribe to this thread

Quantitative Analysis

linkedin twitter facebook  
avatar
Dinah Young Project Manager / Software Asset Manager| Prince William County Springfield, Va, United States
As I am studying for the RMP I have figured out where my weaknesses are and am trying to focus on understanding them better. One of my weaknesses is Quantitative Analysis. I think part of the reason I am struggling with it is that there are not that many examples of it in my study materials and we do not do it where I work (we barely do any risk management which is why I am studying this to add value). I learn best if I can apply a topic to a real world example.
Can anyone provide some examples of when they did quantitative analysis on their risks and what the result was?
Thank you.
Sort By:
avatar
Kiron Bondale Retired | Mentor| Retired Welland, Ontario, Canada
Dinah -

One of the easiest and most common forms of quantitative risk analysis is expected monetary value. When you are defining contingency reserves, doing so using the sum of the EMVs of key risks is a good way to justify them.

Monte Carlo is also another example which is used in many industries to provide a viable range of cost & schedule outcomes given a set of variables.

Kiron
avatar
Sergio Luis Conte Helping to create solutions for everyone| Worldwide based Organizations Buenos Aires, Argentina
Remember that to answer the exam questions you need to focus on what the PMI expect as an answer, not what you make into your daily life / daily work life. This is critical to understand to not fail. On the other side, remember is an estimation then it is based on available information and available time and because of that there is an inherent error that depends on both factors (time and information). In your personal life you are experienced this type of estimations each day.For example, when you have to go to some place and you think how much time it will take. To have an answer you think "what if" and you get a number. "What if" is you are making risk management mainly quantitative analysis.
avatar
Sante Delle-Vergini, PhD Senior Project Manager| Infosys Melbourne, Victoria, Australia
You're likely to come across qualitative risk analysis far more than quantitative, but if you are studying for the RMP, as Sergio said it's what PMI want's to hear more than real examples you can find. EMV is certainly one of the popular methods used for quantitative risk analysis as Kiron said.
avatar
Mansoor Mustafa Senior PM| Government Department Rawalpindi Punjab, Pakistan
Dinah
My suggestion to you that for RMP exam you should see Monte Carlo Simulation examples, Latin hypecube example too for quantitative risk analysis process. EMV is too a good tool for that. See some example on internet.
avatar
Vincent Guerard Coach - Trainer - Speaker - Advisor| Freelance Mont-Royal, Quebec, Canada
Dinah,

Quantitative risk analysis focus on giving a value ($) on the risks for the register globally. Many way are use but mainly a Monte Carlo simulation.

Look at the PMBOK, it cover briefly Probability distribution, sensitivity analysis,Expected monetary value analysis and Monte Carlo.

Any you need clarification on?
avatar
Dinah Young Project Manager / Software Asset Manager| Prince William County Springfield, Va, United States
Thank you. I just need to remember that the purpose of Quantitative Risk Analysis is to find the cost of the risk. I got very confused with some of the questions on a practice exam. Like this one:

Which of the following statement is true?

A. The quantitative risk analysis process will review risk events for their probability and impact on the project objectives.
B. The quantitative risk analysis seeks to determine the true cost of each identified risk event and the probability of each risk event to determine the risk exposure.
C. The quantitative risk analysis process will analyze the effect of risk events that may substantially impact the project's competing demands
D. The quantitative risk analysis reviews the results of risk identification and prepares the project for risk response management.

I chose B but C was the correct answer. I still am not sure why C is correct.
...
1 reply by Sante Delle-Vergini, PhD
Dec 23, 2017 6:08 PM
Sante Delle-Vergini, PhD
...
Dinah, it's a tricky one. Answer B is incorrect because quantitative risk analysis is not performed on "each identified risk", only qualitative risk analysis is generally performed on all risks. Once the qualitative risk analysis has been performed and the risks prioritized, you may go on to further analyze quantitatively the highest priority risks.
avatar
Sante Delle-Vergini, PhD Senior Project Manager| Infosys Melbourne, Victoria, Australia
Dec 23, 2017 5:49 PM
Replying to Dinah Young
...
Thank you. I just need to remember that the purpose of Quantitative Risk Analysis is to find the cost of the risk. I got very confused with some of the questions on a practice exam. Like this one:

Which of the following statement is true?

A. The quantitative risk analysis process will review risk events for their probability and impact on the project objectives.
B. The quantitative risk analysis seeks to determine the true cost of each identified risk event and the probability of each risk event to determine the risk exposure.
C. The quantitative risk analysis process will analyze the effect of risk events that may substantially impact the project's competing demands
D. The quantitative risk analysis reviews the results of risk identification and prepares the project for risk response management.

I chose B but C was the correct answer. I still am not sure why C is correct.
Dinah, it's a tricky one. Answer B is incorrect because quantitative risk analysis is not performed on "each identified risk", only qualitative risk analysis is generally performed on all risks. Once the qualitative risk analysis has been performed and the risks prioritized, you may go on to further analyze quantitatively the highest priority risks.

Please login or join to reply

Content ID:
ADVERTISEMENTS

"If you can dream it, you can do it."

- Walt Disney

ADVERTISEMENT

Sponsors







Vendor Events

See all Vendor Events

Newsletters

Jun 3: The Career Problem Facing New PMs
May 20: Your PM Career as a Project Life Cycle
May 13: The Big Lie After Layoffs

See all newsletters