Risk Assessment and Allocation for Highway Construction Management

Risk Management Matrix - High Probability, High Impact

Return to Text

Figure 13. Cost Risk Assessment top-level diagram. At the top is Cost Risk Baseline. In the center are the following steps:

• Identify Key Performance and schedule risks
• Select cost analysis level of detail
• Construct Work Breakdown Structure-level probability distribution
• Analyze Monte Carlo simulation results

Input on the left side of the diagram includes

• Performance Risks (Includes Technical Risk)
• Schedule Risks
• Cost Risk

Output on the right side includes

• Estimate at Completion
• Cost Risk
• Cost Driver/Risk Identification Sheets
• Cost Estimate Probability Density Function

On the bottom of the diagram is

• Cost Estimating Team
• Cost Risk
• Work Breakdown Structure Managers
• Cost Estimate Probability Density Function

Cost risk assessment top-level diagram (adapted from Project Management Practices: Risk Management, DOE 2003).

Return to Text