PRJM6003 Project Risk Management Assignment Sample
Aim of Assessment
General - To apply risk analysis quantitative techniques to projects
Apply quantitative risk analysis using specialist software to create a cost model, and evaluate and analyse the results Select a project. The project can be from your work experience, or a soci project (could be the same project as Part A of Assessment 1, but best for learning purposes if the project should be a real future project. Students may use the project from Time Management or Cost Management units). Produce a Budget Report: The document is designed to be given to the Project Sponsor for approval. The sponsor is not knowledgeable about the cost estimating process or Monte Carlo simulation. The report must contain the following five sections:
1. Introduction (25%)
a. Executive Summary: This section establishes the key elements within the report, including project scope, budget, recommendations, and any other relevant information. Appropriate context must be provided when describing the project, this includes background information on the organization, the intended goals/benefits of the project, and the project and product scope.
b. Recommended Baseline Budget: Provide a baseline budget composed of 10-30 cost variables (This is a deterministic estimate based on the most likely value for each cost variable, excluding risk events and contingency). You must structure the budget in a manner consistent with industry best practices. Furthermore, you must explain the source of information used to produce the estimate for each item in the budget (i.e. suppliers, subcontractors, historical costs, etc.).
i. Justification of Probability Distribution for One Cost Variable – Explain and justify the selected values (minimum, most likely, and maximum) in the probability distributions for at least one of the cost variables in your Table
NOTE: Once you have completed the above deterministic baseline budget, then conduct Monte
Carlo Simulation (including correlations). In your cost model for Monte Carlo Simulation you will:
• Replace deterministic values in the Recommended Baseline Budget with probability distributions; and • Add two (2) specific risk events to the model.
2. Explanation of Two Risk Events (20%): Provide a brief paragraph or two for each risk event that covers the following key points:
-briefly explain what the risk event is and what are the risk key causes.
- justify the Probability and Consequences of the risk event in terms of your selected probability distribution values for minimum, most likely, and maximum.
3. Contingency & Risk Management (35%)
a. Recommendation for Contingency: Recommend a contingency amount. Explain why you are recommending the contingency that you have selected.
b. Risk Management: based on the Tornado Chart, explain to the sponsor how you will control and minimise the following to ensure that your contingency is sufficient:
i. Most sensitive cost variable (use sensitivity analysis to determine)
ii. Most sensitive risk event (use sensitivity analysis to determine)
c. Correlation Matrix: Select two correlated variables (i.e. one correlation) from your cost model. Explain why they might be correlated. And the likely nature and strength of this correlation
4. Organisational Policy (15%): Compare and comment on your cost results against the organisational policy that states “it is expected that the Baseline Budget (i.e. excluding contingency) should have an 80% probability of being with a range of -5/+10%.”
a. Executive Summary
This section of the report for online assignment help is going to include the project scope, budget and recommendation for the risk management of marriage functions in the specific country. After this, it will also justify and recommend a budget and the probability distribution for one cost variable in the marriage function. This has further described the two risk events and the consequences of the risk in the wedding function, and initially, it is also going to provide information about the project. The risk can impact the overall structure of the wedding functions. The management has also created an estimated value to control the risks. These values can give the idea for event management (VanDerhei, 2019). At last, this will evaluate the wedding policy. There can be several risk managements associated with the wedding ceremony, such as the travelling of wedding guests, the best way of food and catering services, accommodation for the guests, selecting a unique venue, etc.
b. Recommended Baseline Budget
The baseline budget could be estimated on each of the cost variables associated with the wedding function, which is done by the event management. A certain amount of $750,000 can establish the budget line for the wedding function in the country. For wedding venues, the budget could be set by $80,000; for resources required at $30,000, wedding decor could be developed by $25,000. For food and catering services it could be charged with $40,000, accommodation for the wedding guests is $30,000, transportation such as $10,000, and for wedding planner cost it should be done with $20,000, and at last for venue lighting and wedding attire cost, it could be done within $540,000.
i. Justification of Probability Distribution for One Cost Variable
The assumptions do the justification of probability distribution for wedding venues. Sometimes, the justified probability distributions can be done in a theoretical way which is related to wedding functions. This will assume and simulate the expected guests in the wedding performance. The event manager manages the probability distribution for the wedding venue to estimate the number of guests who are able to attend the wedding function. After this, it simulates the correct probability to create a decision for the event. This could be related to the cost variable of an event. For each simulation, the event management set the record of the guest. For example, the total number of guests has been estimated as 10,000, which will help the event organisers or management to plot the seating arrangement.
2. Explanation of Two Risk Events
Primarily a risk event in marriage function is the probability of an unforeseen event that can affect the process and so on. Risk events can cause unexpected consequences to family members linked with the marriage, and these can become individual moments or circumstances and quickly impact the operation's marriage function (Chiappori, 2020). For example, a supplier is late for delivering some goods that are needed on an urgent basis or a key supplier is unavailable in an emergency situation. These risks can adversely affect the management of the marriage function in the United Kingdom. Hence, these two risk events will be evaluated in terms of the selected probability distribution values for minimum, most likely or maximum.
Performance Risk: This is a potential limitation that a marriage program fails to deliver. This possible limit is often less than expected (Prakken, 2018). This is called performance risk, which can be applied to outsourced & internal situations. Performance risk has some illustrative examples, which are:
• Requirements shortfall: The probability of failure of a marriage ceremony or program by failing to meet the requirement (Fenoaltea et al., 2021). Any requirement in scope can be identified as a risk if there is a probability of not completing it.
• Product Value: Suppose a seating arrangement supplier claims that it will reduce the overall cost by 25% by utilising their service. But the decoration team identifies that this particular supply will have usability issues or durability problems that can increase the price rather than decrease it.
Marriage function is dependent on the decorators, furniture suppliers, event management teams, catering services and many more (Chen, Zhang and Wu, 2020). All of these departments should be competent enough to execute the function effectively, and the effectiveness of their services and offerings are based on their performances. Moreover, managing guests and arranging proper transport service for them is another challenge that is equally dependent on the management team's performance.
Market Risk: When the marriage functions fail to meet the fixed results, the market risk is most likely to occur. Market risk events affect the performance of the whole market altogether (Shephard, 2019). The word market risk is also defined as the systematic risk, which refers to the variability which is associated with any financial decision of any marriage function in the country. The risk management process can include the evaluation of several ways to identify the marriage function related risks, such as the religious background of an individual. Market risk in marriage function has initially had an impact on the financial risk. The consequences of the market risk in the marriage function in the country (Zhang and Zou, 2021)). These factors have affected the overall performance of the financial market of marriage function. The exchanging of money can also be an emerging factor in marriage functions. The budget for venues has put stiff competition on market risk, but it can also increase the revenue of the events. The marketing of the wedding venue needs to be targeted.
The consequences of risk events in marriage functions
Both the consequences have effectively impacted the marriage functions in the specific society (Nie and Xing, 2019). These consequences can bring risks to the overall management system, such as insufficient facilities for the wedding guests. The performance risk in marriage functions is most likely to affect the process. The probability of failure in a marriage function or program in the country by being unable to meet the requirements of the process. This creates competition in the overall structure of the ceremony.
On the other hand, the marketing risk has also had an impact on the marriage function. Market risk in marriage function initially impacted the financial risk (Xing et al., 2020). It can be affected in the marriage ceremony such as lack of travelling facilities, improper food and catering services, wasting of money that is miscellaneous and so on.
Performance and market risks must be adequately assessed to avoid unexpected consequences during the marriage function. Requirements for accommodation, hotel rooms and so on are essential for executing a marriage function (Klonecki, 2020). If the wedding planner fails to deliver appropriate rooms and comfortable accommodation for the guests, the overall outcome will be terrible. As marriage is a significant activity, everyone will remember the malfunction for a long time. It is imperative for every department to work accordingly as per the requirements. Every cost variable should be adequate for delivering efficient services to the guests.
3. Contingency & Risk Management
a. Recommendation for Contingency:
The total amount that is allocated for the contingency plan regarding marriage function is €800,000. The total contingency amount is divided into two divisions, a performance-related project has been earmarked with $400,000, and the other half of $400,00 has been reserved for market-oriented risk events (Hazée et al., 2020).
From the context of the marriage function, performance-related risk events can hamper the program's overall structure, such as poor transportation service for guests, improper seating arrangement, low quality of foods that are served, and so on (Allison, 2018). Event management related to the marriage program needs to spend a sufficient amount of money on the improvement of transportation services (ex- $85000). A certain amount of money should be allocated to the overall arrangement for seating (ex $50000). The event team can give $85000 on safety measures for all people who will be present at the marriage ceremony (Hazée et al., 2020). For providing quality food to guests, $75000 is more than enough. Decoration should be efficient and durable for preventing damage in case of a storm or heavy rainfall; a sum of $50000 can be allocated for supporting this. An additional sum of $55000 can be saved for future emergencies.
The marketing management of a marriage function estimates an overall amount of $400,000 in the performance. In marriage functions or ceremonies in the country, the contingency plan has been initiated to overcome the possibilities in terms of market risk. Eventually, based on the marriage function, the marketing management can be done in several ways in terms of various categories of the venue, such as it could be a destination, any high profile wedding, etc. The market risk in marriage events can help understand the clients' money mindset (Pan et al., 2020). The event management should fix an appropriate amount for the program, which includes an approx amount for fixing up the venue that, is $80,000 for a local wedding, to create an attractive wedding card that is $25,000, the booking of the hotel can be estimated that is $30,000 and the overall transportation system for the wedding guests can be done in $55,000 and the remaining $210,000 for the miscellaneous purpose.
b. Risk Management:
The risk management could be evaluated based on the overall ceremony of the wedding in the country. This risk can be estimated on a specific value by the event management. This risk management system is the process of identifying and controlling the issues associated with a wedding ceremony. The event manager needs to modify the proper management system (Shortland, and Perkins, 2019). There can be several issues which can be most sensitive in the wedding function, such risks which are related to the cost of wedding venue charge, resources that are required, wedding decor, food and catering, accommodations for the wedding guest, transportation system, invitation cards and miscellaneous cost and so on.
i. Most sensitive cost variable
The most significant and sensitive cost variable in the marriage ceremony could be wedding attire cost, wedding venue charge and lastly, resources required. This risk has an impact on the overall event, where it will affect the attractiveness of the event. These three cost variables could adversely affect the management as well as the wedding functions. The risk management of the wedding function could be controlled by estimating an approx amount for the event. There can be several activities which are somewhere related to the cost variable (Barman and Potsangbam, 2018). The amount has to be set by the event management, such as approx $7,00,000. The amount could justify the cost variable of an event.
ii. Most sensitive risk event
The most sensitive risk event in the wedding ceremony, moreover both the risk has a practical impact on the event, but eventually most likely to occur is the marketing risk. Numerous costs of estimation have been identified during the process. Hence, without setting a market price for the wedding, the performance would not happen. The risk or event management needs to provide essential and productive equipment to control the market risks in wedding functions. There can be numerous miscellaneous activities that indirectly impact the wedding function's cost variable. To overcome the chance, they can also provide sufficient resources for the clients to understand the wedding cost.
c. Correlation Matrix:
Food catering and accommodation for guests are correlated. Guests will only enjoy the food when they are able to rest appropriately. Though the food distribution will be based on the buffet method, the guests are likely to enjoy the food only when they are sitting in a comfortable position. The food services provide an impact on the guest. Proper seating positions can increase the overall satisfaction while eating food. Catering should divide their food offerings into both pure veg, veg and non-veg segments. Healthier alternatives should be present for health-conscious people. If fragmented flowers surround the seating arrangement, the experience will be more satisfying. Marriage function will be more excellent if food catering members serve the old people who are unable to walk correctly. A special seating arrangement for kids will be great. All of the above conditions will definitely strengthen the correlation between food catering and accommodation. This correlation defines that food catering and accommodation can be improved if these two departments work collaboratively.
4. Organisational Policy
Several cost results have been found based on the marriage function. Food catering and accommodation are correlated with each other. It is pretty hard to estimate the budget of a marriage ceremony without a decent idea. The costs associated with marriage function come from different places. The overall cost for the marriage function is $750,000. The on-site expenses for the resources required are enormous. It is the most expensive segment of the process. These include the overall costs that are charged by event venues and wedding planners. It is worth identifying that the cost variables can be changed based on the total attendance of the guests (Pedersen et al., 2021). Food catering is an example of variable expenses as the number of food guests need is subsequently changed according to the number of guests, which costs around one-sixth of the total budget. On-site fees for the marriage function include a security deposit for venue booking, insurance coverage for the venue, room rental for relatives and parking lots for vehicles. Food and catering include costs of beverages, meals, labour fees, gratuity fees and so on.
As per the cost results, accommodation of guests carried more cost than wedding venue decoration. Naturally, guests' accommodation should be comfortable, clean and spacious. This is more important than the decoration, so the price allocated for the housing is justified. Several resources like doctors' support and emergency transport support are arranged and cost more than wedding attire costs (VanDerhei, 2019). This is also justified considering the safety and reliability of the marriage function. Transportation cost is entirely above the bar considering the current rates of the private rental cars. The car service provider charged 30% more than the regular rate. It is unethical and results in a fall in the overall budget. The wedding planner's cost is justified as they provided a perfect catering service that complies with the accommodation of the guests. This also created a perfect correlation between these two cost variables. Venue lighting and wedding attire cost are quite the same. But the attire cost should be less as per their worth. Lighting design and usage of various kinds of lighting are appropriate for creating a vibe in the marriage function.
Venue acquisition and invitation costs are inevitable because these costs can not be avoided. These two types of fees are the base of the whole marriage function. To maintain a respective formal form of invitation, invitation cards are much better than today's digital invitation process. There are many other miscellaneous costs associated with this marriage function. It is expected that the baseline budget should have an 80% probability with a range of -5/+10%.
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