Two Assignments

Introduction

This risk management plan is intended to communicate potential risks of this upcoming store restructuring project to this project’s stakeholders.

Methodology Statement

Purpose of the Risk Management Plan

· Identifies as many risk events as possible (what can go wrong)

· Minimizes their impact (what can be done about the event before the project begins)

· Manages responses to those events that do materialize (contingency plans)

· Provides contingency funds to cover risk events that actually materialize.

Risk Management Procedure

Process

Risk Identification (Brief descriptions of each risk)

· Risk #1: Exceed Budget

· The projects set budget may be exceeded and the owner would be required to take money from the emergency contingency funds. Unexpected costs could include more labor to be paid if the project exceeds the timeline, contractors needing to be hired if the store’s staff are unable to complete technical or physical tasks, or more materials needed for the project than expected.

· Risk #2: Decrease in Sales

· During the renovation, customers may feel inconvenienced if certain gift or card sections of the store that they want to shop in are under construction. They may leave the store and bring their business elsewhere.

· Risk #3: Product/Fixture Damage

· During the restructuring of the store, products that are for sale may become damaged or physical parts of the store may be damaged. Moving large objects throughout the store could be cumbersome and knock holes in the walls or damage shelves or displays. When repainting the walls, paint could spill on the carpets requiring a carpet cleaning service.

· Risk #4: Technical problems with new terminals

· Risk #5: Final store layout does not meet quality standards

Risk Analysis (consequences of each risk)

· Risk #1: Exceed Budget

· If the set aside contingency funds do not cover the unexpected expenses, the owner would have to resort to applying for a business loan, putting the restructuring plan on hiatus, or stopping the plan altogether.

· Risk #2: Decrease in Sales

· Risk #3: Product/Fixture Damage

· Risk #4: Technical problems with new terminals

· Risk #5: Final store layout does not meet quality standards

2.3.1 Qualitative and Quantitative Risk Analysis (graphs/visual representations that show the probability and impact of each risk)

· Probability

· High- Greater than 70% probability of occurrence

· Medium- Between 30% and 70% probability of occurrence

· Low- Below 30% probability of occurrence

· Impact

· High- The risk has the potential to greatly impact the project cost, schedule, or performance

· Medium- The risk has the potential to slightly impact the project cost, schedule, or performance

· Low- The risk that has relatively little impact on the project cost, schedule, or performance

2.4 Risk Monitoring, Controlling, and Reporting

Responses to risks (pg. 344-345 of PMBOK)

· Avoid- Eliminate the threat by completely eliminating the cause

· Mitigate- Identify various options and ways to reduce the probability or the impact of the risk

· Accept- Nothing will be done, risk is unavoidable

· Transfer- Designate another party to take responsibility for the risk (buy insurance, outsource, etc.)

**Charmaine created this risk response matrix so she may need to assist Daniel with filling it in

Conclusion

Simplified summary of plan for how the projects risks will be monitored, controlled, and reported.

References