QRA

WHAT IS QRA?

Quantitative Risk Analysis is a method of quantifying the highest priority risks in order to determine the probability of achieving the overall cost and schedule objectives.
For example, rather than ranking the probability of achieving of a risk as a three on a scale of one to five qualitatively, we should estimate the probability to be 50% or we would say the impact is three weeks or $30,000.
In simple words, it refers to the project related process performing a thorough and complete numeric analysis of the overall effect of the complete and total quantifiable amount of risks in the entirety of the predetermined list of project objectives.

It allows us to evaluate the overall project risk from the individual risks.
For more critical decisions, QRA provides more objective information and data than the qualitative analysis.
It gives better estimates for projects by considering the potential impact of the risks on the schedule and budget.

Projects that require a contingency Reserve for the schedule and budget.
Large, complex projects that require Go / No Go decisions.
Projects where upper management wants more detail about probability of completing the project on the schedule and within budget.

Three Point Estimate	:	A technique that uses the optimistic, most likely and pessimistic values to determine the best estimate.
Decision tree analysis	:	A diagram that shows the implications of choosing one or other alternatives.
Expected monetary value (EMV)	:	A method used to establish the contingency reserves for a project budget and schedule.
Monte Carlo Analysis	:	A technique that uses optimistic, most likely and pessimistic estimates to determine the total project cost and project compilation dates.
Sensitivity Analysis	:	A technique used to determine which risks have the greatest impact on a project.
Fault Tree Analysis	:	The analysis of a structured diagram which identifies elements that can cause system failure.