[SOLVED] Reading and Organizing Risk Data

Page 1 of 4 Reading and Organizing Risk Data
Spring Semester 2022 (PMAN 637)
1. The mid-term is an open book exam. No discussion with your team or class members.
2. When quoting a reference, use proper APA style citations (Author, Year of publication, page#) Cite only
references from our course readings, sessions 1-6.
3. Put your name on an MS Word document on top of answers.
4. Your exam is due in your Assignment Folder by Wednesday March 2, 2022 (9 am EST).
5. If you have a question of clarification to the Professor, post it in the whole class Session 7 discussion
“Mid-Term Exam” area and I will answer for all the class. Thank you! Your UMGC Professor, PMAN 637
Question 1a & 1b: Reading and Organizing Risk Data (4 Points – 2 points per
question):
1a) Each person needs to be able to read a Probability & Impact rating scale in
PMAN 637. Review the worldwide standards PMBOK Guide scale, Table 11-1 (PMI,
2017). How many months schedule delay risk “impact” is labeled “high risk” — if a
project is experiencing “significant” impact upon its functionality (for instance, due to
“scope creep” and unauthorized add-ons) that is rated “unacceptable to sponsor”?
1b) Go in to your My Tools>Locker<Group Locker area. In your team folder labeled
RMPP, find the “Risk Register” that was added by your team (required session 4) and
phrase/add a risk which might have high probability of “impacting” your deadline of April 5,
2022, to complete edits of your Final Team Paper. Rate this risk using the scale provided
on the last page of this exam if your team has not chosen any other matrix or scale No
emails or contact with others during the exam: if there is no Register, add one.
Question 2: Identifying Project Risks (4 points)
In order to “separate” and number identified project risks, many teams worldwide use a
Risk Breakdown Structure (RBS). PM and even external risks can be classified in an
RBS as well in for discussion by diverse teams in any work setting. Create an RBS
(Standard for Risk Management, page 148 or PMBOK, 6th edition page 406) and then
identify, categorize and number (a) project management risks and (b) Schedule risks for
the following case.
Read case “Tampa Bay Water Desalination Plant”, on p.12 of the article assigned
“Mitigation of Risk in Construction: Strategies for Reducing Risk and Maximizing
Profitability” (McGraw-Hill, 2012). This article was assigned in “Content” session 3
Question 3 Risk Management Tools and Methods in Performing Qualitative and
Quantitative Analysis (4 Points – 2 points per question).Page 2 of 4
Review Chapter 6, p.143, section x6.4.3 “Monte Carlo Simulation” in your Standard for
Risk Management (PMI, 2019).
The Standard for Risk Management in Portfolios, Programs, and Projects (PMI, 2019)
required for class, download for free from this library link:
https://ebookcentral.proquest.com/lib/umuc/detail.action?docID=5755605
3a) With only a 23% probability of meeting their forecasted $2.2M budget, what range
of dollar figures could you present to your upper managers as a PM for the probable
“range” that this project might cost? Review the reading assigned in this question
(PMI, 2019, p.143). This is known as the “range of uncertainty”.
3b) Why is “forecasting” different than planning a budget? Explain in a 1 paragraph
limit.
Question 4 (8 points). Using a Risk Register and Rating Scale: case analysis
Read the attached “Ready-Energy” case and format a Risk Register (use the template
in “Content” uploaded with this exam). Identify the top 8 risks facing the Project
Management team. Categorize these by scope, schedule, budget, and “technical”
risks. Remember, weather or environmental/external risks would impact schedule and
budget. Rate risks using the scale provided at the end of the case.
Case Study:
Risks in Producing Electricity via Steam-Powered Turbines: A Hypothetical Case
Sam Martinez is seeking to invest a portion of his considerable assets in the
“independent” electric power production industry in California, a sector projected
to experience very rapid growth in the 21st century. He has set up and funded a
company “Ready-Energy Inc.”. The intention is to use the company to build and
operate an electric power plant and use innovative, state-of-the art turbine
equipment to generate steam. His plan is to sell both electricity produced by
turbines and steam.
However, the large public-sector (hypothetical) CA Energy Resources Inc.
produces most of the power for that remote region of northern California. The
main exceptions are co-generation plants which sell off extra steam once
generation of electricity takes place. These small hydro-plants generate electricity
for many northern Californian towns using river water heated into steam, which
turns turbines in the plant – thus electricity is produced. These “independents” are
Mr. Martinez’ business models but also competition. The giant electrical utility,Page 3 of 4
California Energy, operates all long-distance distribution, selling electricity to
municipal utilities for local distribution, brokering sales of electrical power to large
industrial customers, and providing electricity wholesale to small rural customers.
Privatization of the giant California Energy is being argued by leading
environmental groups, with a view that increases in electricity cost per unit which
would decrease electricity consumption and that “big energy” owns too much
power generation. Other groups do not want rate increases so are interested in cogeneration of electricity and want to financially back Mr. Martinez. Risk
probabilities have been calculated as part of Ready-Energy’s early financial
forecasts, but they lack any risk management plan.
Sam has identified what he believes to be his first big opportunity and is
excited to share it with you as a “Risk Management consultant”. It would involve:
1. Producing base load electric power for sale using a CCGT (combined
cycle gas turbine) set of natural gas-powered turbines driving generators with
waste heat producing high pressure steam to drive a steam turbine generator.
2. Providing (for sale) low pressure steam for manufacturing organizations
in the immediate vicinity of the CCGT plant.
A range of established suppliers/vendors of turbine-run CCGT plant
equipment would be willing to sell Ready-Energy its turbine-driven equipment to
start operations: they offer, for differing prices (which could risk the project
budget):
A) New untested design. Very high fuel efficiency. Initial reliability is
uncertain. Likely to be very reliable in the long run. Claimed very low
maintenance costs. Low capital cost to encourage purchase.
B) Tried and true design. Low fuel efficiency, moderate reliability, and
maintenance costs. Moderate capital cost. Easy to maintain.
CCGT plant suppliers will install the major plant components on a fixed
price basis. Ready-Energy Inc. has revised the scope and Contract, with stiff
penalty clauses for 1) delays or 2) performance failures, which the CCGT turbine
manufacturer must be responsible for. However, such penalty clauses may not be
operable, for example, if ground conditions are not as tested environmentally or
electrical grid connections are not in place when required. The Board wants a
project risk analysis to be made, and you will be assigned this responsibility.Page 4 of 4
The giant California Energy will provide grid connections and will not allow
anyone else to do installations from their main grids. The plant could be delayed
for weather reasons and start-up delayed due to natural gas hook-ups or even
electrical failures due to ‘rolling black-outs’.
Water to turn the CCGT turbines will be taken from a river which flows
through the municipality. However, no legal environmental permits have been
granted to remove water from these rivers during the several drought years in
California. Permit fees statewide are rumored to rise dramatically this year.
Extraction of water requires municipal planning permits, and state gov’t.
approval is required for the plant construction using low pressure steam lines to run
steam to local companies, and hook-ups to any electrical grid power lines. All
construction must be scheduled, of course, dependent upon approvals from
governmental agencies. Your supervisor at Ready-Energy is pressuring you, as a
Project Management consultant, to complete your work for Board review.
Instructions: Question 4 – 8 points
Use this scale to “rate” risks and calculate risk score when formatting your Risk
Register (the “register” template is uploaded in Session 7 “Discussions” along with
the exam, there for you to download and use). When finished please put your
name and date on the top of your Answer Sheet and upload into your Assignment
Folder. Reading and Organizing Risk Data