Computational Tools in Risk Management

Question 1

What is temporal risk?

Answer 1

Uncertainties potential delays related to time that can impact project completion

Question 2

What are some sources of temporal risk?

Answer 2

1. Unrealistic planning
2. Project complexity
3. Estimation completed in early stages
4. Lack of contigency on critical activities

Question 3

What is the critical path method and when is an activity considered critical?

Answer 3

• CPM is used to determine the longest sequence of dependent tasks. Any delays to these tasks will delay the whole project.
• An activity is critical when float is zero

Question 4

How do you perform CPM?

Answer 4

1. Extract early and late finish times from Microsoft Project
2. Calculate float
3. Activities with zero float are considered critical

Question 5

What are the advantages and disadvantages of CPM?

Answer 5

Advantages:
1. Identifies tasks to manage closely
2. Enables resource smoothing (if time constraints take priority) or resource levelling (if resource constraints take prority)
3. Helps track project timelines
4. Visual representation

Disadvantages:
1. Assumes fixed durations, may not reflect real world uncertainties
2. Requires robust input data
3. Complex project can have overly complex diagrams