*ORDER THE PAPER NOW!*

*ORDER THE PAPER NOW!*

**PROJECT RISK MANAGEMENT **

**QUANTITATIVE RISK ANALYSIS – Monte Carlo Simulation (Based on Topics 10,11 & 12)**

**Learning Objective of Assignment – ***To apply risk analysis quantitative techniques to projects** *

**Select a project.** Can be from your work experience; or a social project. It is best for learning purposes if the project is a __real future project __.

__BUDGET REPORT (using Monte Carlo Simulation)__

**NOTE: This is a formal project management document, not an academic assignment.**

Produce a **BUDGET REPORT** document to the Project Sponsor, __who is not knowledgeable about the cost estimating process or Monte Carlo simulation__, that __must__ strictly have has the following **sections (a-f):**

**Introduction**: e.g. executive summary (key results within the report), project scope, and any other relevant information**Recommended Baseline Budget****(excluding contingency),****Composed of 15-30 cost variables.**

(This is a deterministic estimate based on __most likely__ value for each cost variable, __excluding__ risk events and contingency).

__(i)- Structure and content of the cost model__

__(ii)- Explain the source of information__ used to produce this budget.

__NOTE:__

**Once you have completed the above deterministic baseline budget, then conduct Monte Carlo Simulation (including correlations). Your cost model for MCS will: **

**replace deterministic values in the Recommended Baseline Budget with probability distributions,****and add 2 specific risk events**

**Brief explain your 2 risk events**(one short paragraph each risk – briefly explaining what the risk event is. Do not discuss: causes; probability or consequences; or treatments)**(****Note: you must chose/explain risk events that if they eventuate they will increase the sponsor’s budget)**- Recommendation for
**Contingency****(explaining reasons)** **Sensitivity Analysis**– based on the Tornado Chart, explain to the Sponsor how you will__control and minimise__*the following*:- Most sensitive cost variable.
- Most sensitive risk event.

- Compare and comment on the your cost results against the
**organisational policy**that states “it is expected that the__Baseline Budget__should have an 80% probability of being with a range of -5/+10%,” - Appendix:
**Quick Output Report**(no marks but should be referred to in answering above points)- The sponsor wants to understand MCS. To facilitate this, the sponsor has asked:
__Explain__and__justify__the selected(minimum, most likely and maximum) in the probability distributions for__values____ONE__of the**cost variables**__Explain__and__justify__the selected(minimum, most likely and maximum) and probability of occurrence for__values____ONE__of the**risk events**

**Correlation matrix.**Select 2 correlated variables (i.e.__one__correlation) from your cost model. Explain__why__they might be correlated. And the likely__nature__and__strength__of this correlation

**Professional Report Style Presentation (5 MARKS)**

** Format – **One and half spacing, Arial narrow 10 font, 2.5cm margins,

__WORD, submit through turni__

*ORDER THE PAPER NOW!*

*ORDER THE PAPER NOW!*