One of the benfits of doing integrated risk management is that by pooling risk we can normally shorten a projects ciritical path. The reason for this is that risks can be treated in parallel. This is the case when the issues can be solved by seperate organizations or individuals in parallel as would normally be the case for risks in specific work packages. We don´t need to sum the durations but actually we should use the formula for parallel availability.
For example for a risk which have a 50% risk we find as the number increase the probabilty of having to extend the project to the entire period of those risks is:
On the other hand for risks in series we find that as the number of risks increases the distribution goes towards a binomial or normal distribution.
2 comments:
I might be missing something, what does "n" stand for in your formula?
Additionally, what do you mean by a risk that has a 50% risk?
Thanks!
Hi,
Right - sorry about being a bit unclear there. n is the number of risks that are identified and that are being combined in the final contingecy buffer (a la critical chain).
Lets assume they can all be done in parallel and they all have the same length. As the numer n grows we approach 1. And if n is 0 there is no added length etc.
When I say the risk has 50% risk I mean that there is a 50% of the risk occuring.
Best Regards,
Mans
P.S. Let me know if I have just confused things more ;-)
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