Project risk alternatives
Moderator: Intaver Support
Project risk alternatives
What happens if sum of probabilities of all alternatives are greater than 100%?
IT Program Manager

 Posts: 933
 Joined: Wed Nov 09, 2005 9:55 am
Re: Project risk alternatives
If you are using alternative outcomes to model a risk impact, then these means you have assigned the same type of risk outcome type (Cost, Schedule, etc.) for a single risk more than once as in the example below. In this example we have the same risk assigned to a task with the same risk outcome type (Schedule). There are four risk outcomes, each with 3% chance of occurring. If we look at the pie chart below we can see that overall the risk has a 12% chance of occurring.
Now what happens if the risk alternatives add up to more than 100%. In the example below, we have increased the first 2 alternatives to 70% and 50% respectively. If we add up all the risk chances, it should now equal 126%. However, risks can only have a probability between 0 <>100%. If the risk alternatives add up to greater than 100%, RiskyProject will add the risk alternatives and cumulatively add the probabilities until they reach 100%. In this example, we can see in the pie chart that now first risk with 70% chance will be fully accounted for. However, the second alternative will only add an additional 30% at which point the cumulative chance of the alternatives is now 100%. In addition the last 2 alternatives are ignored.
Now what happens if the risk alternatives add up to more than 100%. In the example below, we have increased the first 2 alternatives to 70% and 50% respectively. If we add up all the risk chances, it should now equal 126%. However, risks can only have a probability between 0 <>100%. If the risk alternatives add up to greater than 100%, RiskyProject will add the risk alternatives and cumulatively add the probabilities until they reach 100%. In this example, we can see in the pie chart that now first risk with 70% chance will be fully accounted for. However, the second alternative will only add an additional 30% at which point the cumulative chance of the alternatives is now 100%. In addition the last 2 alternatives are ignored.
Intaver Support Team
Intaver Institute Inc.
Home of Project Risk Management and Project Risk Analysis software RiskyProject
www.intaver.com
Intaver Institute Inc.
Home of Project Risk Management and Project Risk Analysis software RiskyProject
www.intaver.com