Frances is the project manager of a project in her organization. This project has a budget of $567,000 and is schedule to last for three years. Frances wants to examine the risk events to determine…

The correct answer is B. Sensitivity analysis. Sensitivity Analysis is a quantitative risk analysis technique used to determine which individual risks - or other sources of uncertainty - have the most potential impact on project outcomes. It is typically represented using a tornado diagram, where risks are ranked by their…

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Question

Frances is the project manager of a project in her organization. This project has a budget of $567,000 and is schedule to last for three years. Frances wants to examine the risk events to determine which risk events have the most potential impact on the project. Which modeling technique can help Frances to accomplish this goal?

Options

AExpected monetary value
BSensitivity analysis
CQuantitative risk analysis
DModeling and simulation

How the community answered

(30 responses)

A
3% (1)
B
83% (25)
C
3% (1)
D
10% (3)

Explanation

Sensitivity Analysis is a quantitative risk analysis technique used to determine which individual risks - or other sources of uncertainty - have the most potential impact on project outcomes. It is typically represented using a tornado diagram, where risks are ranked by their degree of influence on the project objective. Expected Monetary Value (EMV) calculates the average outcome of uncertain scenarios, while Modeling and Simulation (e.g., Monte Carlo) models the combined effect of all risks. Sensitivity analysis is specifically designed to identify which risks matter most, making it the best answer here.

Topics

#Quantitative Risk Analysis#Sensitivity Analysis#Risk Impact Assessment#Risk Prioritization

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