RiskyProject for cost analysis

General discussion and questions about project risk management and risk analysis software RiskyProject. Includes discussion on how to perform efficient project risk analysis using our software.

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KerryMiller
Posts: 14
Joined: Tue Dec 18, 2007 3:39 pm
Location: USA, MI

RiskyProject for cost analysis

Post by KerryMiller » Wed Jan 02, 2008 4:04 pm

Hello,

I'm trying to perform cost estimation for the construction project with risks and uncertainties. I have certain events with their probabilities and outcomes, which affect cost of my project. How can I use RiskyProject to model these uncertainties?
Project Engineer

Intaver Support
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Joined: Wed Nov 09, 2005 9:55 am

Post by Intaver Support » Wed Jan 02, 2008 4:18 pm

RiskyProject can be used for project cost analysis. You should have a project schedule and list of risks, which would affect your cost. RiskyProject will calculate probabilistic cash flow profile for your project. You may use event with the following outcomes:

fixed cost increase
relative cost increase

Please remember that if your have risks affective duration, such as relative delay, and variable cost assigned to the activity, the cost of the project with risks will increase automatically.

You may cost results view to be presented with cash flow charts with and without risks.
Intaver Support Team
Intaver Institute Inc.
Home of Project Risk Management and Project Risk Analysis software RiskyProject
www.intaver.com

KerryMiller
Posts: 14
Joined: Tue Dec 18, 2007 3:39 pm
Location: USA, MI

Post by KerryMiller » Wed Jan 02, 2008 4:19 pm

Sounds good. Can I define event which would lead to cost savings?
Project Engineer

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Post by Intaver Support » Wed Jan 02, 2008 4:24 pm

You may use negative result for fixed cost increase and relative cost increase events. For example you have event 'saving related to the component' with fixed cost increase outcome -$1000. I would mean that this event would lead to $1000 savings for this component.
Intaver Support Team
Intaver Institute Inc.
Home of Project Risk Management and Project Risk Analysis software RiskyProject
www.intaver.com

ColinRagger
Posts: 3
Joined: Sat Nov 28, 2009 4:45 pm

Cost risks with uncertainties

Post by ColinRagger » Wed Jun 02, 2010 9:05 am

We have several cost risks that are part of particular activities. However, currently we model these risks using base low and high impacts.

For example, we have an activity that has a cost of $1 000 000. We may have a risk that has to do with the particular environment that can either improve or impede execution of the activity. Therefore, the cost may be as little as 800 000 but as much as 1 400 000. So 800 k 1000k and 1400k become our low base and high estimate for the particular risk for the activity with a normal distribution. How can we perform this in RiskyProject? We would like this as it would go along way to integrating our cost and schedule estimates.

CR
Colin Ragger,
Risk Management Consultant

Intaver Support
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Joined: Wed Nov 09, 2005 9:55 am

Cost risks

Post by Intaver Support » Thu Jun 03, 2010 7:42 am

With version 3.2 the best way to model this risk would be to create a three mutually exclusive alternative for the risk. They might look like this:

20% chance that Risk A will increase fixed costs by -200K
60% chance that Risk A will increase fixed costs by 0 K
20% chance that Risk A will increase fixed costs by 400 K

In this way you can model the risk as both a threat and opportunity. The actual probabilities and number of mutual exclusive alternatives you use can be modified to model different distribution types.

In our upcoming release, you will be able to model this types of risks directly using low, high, and base estimates with distributions.

Intaver Support
Intaver Support Team
Intaver Institute Inc.
Home of Project Risk Management and Project Risk Analysis software RiskyProject
www.intaver.com

SantosB
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Joined: Tue Apr 13, 2010 11:32 am
Location: Brazil
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Post by SantosB » Mon Jun 21, 2010 11:41 am

Hello,

How can I define risk associlated with income or revenue?

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Post by Intaver Support » Tue Jun 22, 2010 10:36 am

In RiskyProject income is net processed from sales or net revenue (without cost). RiskyProject analyze cost and income separately, because they may have different risk and uncertainties. Particularly, RiskyProject has risks Fixed Income Increase and Relative Income Increase. You can assign a special statistical distribution for Income.
Intaver Support Team
Intaver Institute Inc.
Home of Project Risk Management and Project Risk Analysis software RiskyProject
www.intaver.com

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