Project Risk = Probability of event * Consequences ofevent

Let’s investigate the quantitative risk identified for acompany, last year.

Probability of Failure Category	Probability of Failure	Consequences of Failure Category
Process Maturity	30%	Performance = 55%
Technical Complexity	25%	Schedule = 75%
Vendor Dependency	30%	Cost = $55
Workforce Availability	10%	Reliability = 20%

Use the table above to answer the following questions:

1. Please calculate the total risk factor for this project. Wouldyou assess this level of risk as low, moderate, or high? Why?

(Hint: Total Risk Factor = (Pf + Cf) - (Pf*Cf) Where P =Average probability of failure and C = Average Consequences ofFailure. A common rule of thumb assigns any project with a RiskFactor of below 0.30 as low risk, with a Risk Factor of between0.30 and 0.70 as medium risk, and Risk Factor over 0.7 as highrisk).

1. What are all the risk mitigation strategies available to thiscompany (in the example above)? What specific mitigation optionswould you recommend to the corporation?
2. To reduce the total risk factor by one level (i.e., High toMedium or Medium to Low) what would be your focus among the fourprobabilities of failure and four consequences of failurelisted?

• If you were to prioritize your efforts, which risk factorswould you address first? Why?

1. Explain the meaning of the following sentence: Reduction ofrisk factors is not cheap.