ABSTRACT
This chapter discusses the steps that need to be taken when deriving an analysis-based risk management plan is to produce the cost curve that is specific to the risks the project manager owns. An analyst usually does to help the manager manage their risks is to identify the ones that pose the greatest potential threat. This chapter uses five ranking techniques, none of which is any better than the others. The rankings are: mean, correlation, urgency, trend and leverage. The values of a set of correlation coefficients can easily be plotted in Tornado form using Excel's standard bar charts. The Risk Reduction Leverage (RRL) is the reduction in exposure obtained, divided by the expenditure on prevention. The chapter explains an approach to three different workshops: project engineers; project managers and project executive. Risk analyses inform investment decisions and must try to be of investment quality. Reproducibility is an important characteristic of investment quality models.
