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Risk categories vs Risk Outcomes
Posted: Mon Dec 12, 2016 4:35 am
What is the difference between risk category and risk outcome type?
Re: Risk categories vs Risk Outcomes
Posted: Mon Dec 12, 2016 4:37 am
This is a common question because it is a slightly different concept than standard risk management terminology. In RiskyProject, there are risk categories that can be composed of 1 or more outcomes. The reason for this is lies in the Monte Carlo simulation models. To quantitatively model cost or duration risk requires not only categories, but subcategories that further define the risk assignment which are called Outcomes Types. For example, for a cost risk, it can be defined as a fixed cost outcome ($) or a relative cost outcome (% of the base cost).
So when risks are assigned in Risk Project they have inputs: Chance (%) and Outcome Type (Fixed or relative)> Outcome and outputs that are the more common Probability, Impacts and Scores.
For non quantitative risk categories such as Quality, RiskyProject uses the same calculation algorithm and requires that the risk modeling be consistent. Therefore, all risk categories require at least one risk outcome type.
For example, if you have a risk category Quality, you must also define an outcome type for it Quality Risk. The outcome must be unique as it will be listed because when running quantitative risk analysis only outcomes types (e.g Relative cost increase, Fixed cost increase, …) are listed not the risk categories.