Management asssignment

You are the risk manager for a major infrastructure project involving multiple stakeholders, tight deadlines, and significant financial exposure. As part of your risk analysis, you have identified the following potential risk events:

Tasks:

1. Calculate the Expected Loss (Le) for each risk and for the entire project

2.. Assign a Likelihood and Impact rating to each risk on a scale from 1 (low) to 5 (high), based on the probabilities provided. For example:

Likelihood rating:

• 0.10.2 = 1
• 0.30.4 = 3
• 0.5 and above = 5

Impact rating:

• 0.10.2 = 1
• 0.30.4 = 2
• 0.50.6 = 3
• 0.70.8 = 4
• 0.91.0 = 5

3. Calculate the Severity for each risk.

4. Categorize each risk into zones based on its severity score:

• Red Zone (High Risk): 1215
• Yellow Zone (Medium Risk): 811
• Green Zone (Low Risk): Less than 8

5. Compare your rankings from the Expected Loss and the Severity Matrix. Do the two methods prioritize the same risks? If not, explain why.

6. Given that impact is often considered more important than likelihood (e.g., a 10% chance of losing $1,000,000 may be seen as more severe than a 90% chance of losing $1,000), discuss which method (Expected Loss vs. Severity Matrix) provides better guidance for decision-making in this scenario.

7. Finally, propose a risk response plan for the top two highest-priority risks, including mitigation or contingency strategies. For risks that cannot be fully addressed, explain how you would monitor and manage them throughout the project lifecycle.

Useful Resources for the Assignment:

Using decision models in the real world

Qualitative risk assessment

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