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Risk Containment Action versus Contingency Plan Containment action before action taken before the risk occurs might prevent the risk from taking place reduce the impact should the risk occur Cost is associated. Is it cost-effective, or better to leave as it is?

Risk Contingency plan plan of action made before the risk occurs triggered by the risk alternative plan triggered by the risk occurring funds need to be set aside in case the plan is needed

A new web-based booking system for a hotel chain will take 3 weeks for requirements capture, 8 weeks for development and 4 weeks for acceptance testing. There is a 75% chance that the time allowed for development will not be sufficient because the developers are not experienced in Java; this would cause a development delay of 2 weeks, with an additional effort of 5 person-weeks.

Draw a diagram to demonstrate the impact of the risk, and calculate the additional effort and duration that would need to be accommodated in the project plan.

Sequence of Activities Project will last 15 weeks ( )

Including Element of Risk Project will last 15 weeks (25%) or 17 weeks (75%)

Containment Calculation Additional Effort = Risk % * Delayed Effort Additional Duration = Risk % * Delayed Duration Expected value of additional duration = 75/100 * 2 = 0.75 * 2 = 1.50 weeks This evaluates the 75% chance of a 2 week delay Expected value of additional effort = 75/100 * 5 = 0.75 * 5 = 3.75 person-weeks This evaluates the 75% chance of a further 5 person-weeks

Containing Risk You have a choice of containment action, as specified below. Choice 1 A 2-week training course before requirements capture would reduce this risk to 20%, but it would involve an additional 3 person-weeks. Draw a diagram to illustrate the inclusion of the training course, and then calculate the revised impact on effort and duration.

Containing Risk Project will last 17 weeks (80%) or 19 weeks (20%) Requirements Capture Development Risk of overrun Acceptance testing 3 weeks 4 weeks 8 weeks Delay 2 weeks 5 extra person-weeks 20% 80% Training course 2 weeks 3 extra person-weeks

Containment Calculation Additional Effort = Risk % * Delayed Effort Additional Duration = Risk % * Delayed Duration Expected value of additional duration = 2 + (0.20 * 2) = 2.4 weeks This evaluates extra week on course, plus reduced risk of 20% of a 2 weeks delay Expected value of additional effort = 3 + (0.20 * 5) = 4.00 person-weeks This evaluates extra 3 person-weeks on the course, plus the reduced risk of 20% of a further 5 person-weeks

You have a choice of containment action, as specified below. Choice 2 A 3-week training course in parallel with requirements capture would reduce this risk to 25%, but it would involve an additional 3 person-weeks. Draw a diagram to illustrate the inclusion of the training course, and then calculate the revised impact on effort and duration.

Containing Risk Requirements Capture Development Risk of overrun Acceptance testing 3 weeks 4 weeks 8 weeks Delay 2 weeks 5 extra person-weeks 25% 75% Training course 3 weeks; 0 extra weeks 3 extra person-weeks Project will last 15 weeks (75%) or 17 weeks (25%)

Containment Calculation Additional Effort = Risk % * Delayed Effort Additional Duration = Risk % * Delayed Duration Expected value of additional duration = 0 + (0.25 * 2) = 0.5 weeks This evaluates extra week on course, plus reduced risk of 25% of a 2 weeks delay Expected value of additional effort = 3 + (0.25 * 5) = 4.25 person-weeks This evaluates extra 3 person-weeks on the course, plus the reduced risk of 25% of a further 5 person-weeks

Based on your calculations above, which one of the training courses above should be booked, or would it be better not to arrange a course at all? Please explain your answer.

The course in Choice 2 should be booked because it reduces duration for a minimal amount of extra effort. The course in Choice 1 should not be booked because it increases both duration and effort required compared to taking no action. Order of preference would be firstly to run course as in Choice 2, and secondly to take no action. Financial cost of course would also need to be taken into account.