Case Study: Risk Management and Evaluation

Nuclear energy is one of the possible alternative energy to meet the increasing energy demand in the world. Unlike coal and gas, nuclear power can be considered as clean from pollution. In this context, the UAE has increased its focus on this energy in order to comply with its vision of being a clean industrial country that sustain environment and people. As the risk manager of a project sponsored by Barakah, you are assigned the role of managing and evaluating risks that might affect the project during the execution phase. The project is scheduled to start from July 2021, it consists of power plant extension that include expanding the power plant building and installing new electrical machines to boost the produced electric power. During a brain storming session, you discovered that the current pandemic, due the COVID-19, could be a triggering event that might lead to the occurrence of several risky events. The following represents data about the project prior to the risk study:

Activity	Description	Immediate Predecessor	Activity Time : T (in days)
A	Plant specifications study		5
B	environmental impact study	A	6
C	Engineering study	A	8
D	Demolition, remodeling, and dust control	B	12
E	Enter additional electrical machines and equipment	B	20
F	Job-site security	B,C	16
G	On site execution of the building extension	D,E	25
H	On site execution of the machinery implementation	F	35
I	Testing the new building with machines onboard	F	20
J	security control and safety monitoring	G,H,I	14

Table: Power Plant Extension Project Data

Part I: Risk Management

As the head of the project risk management team, you will perform some of the risk management steps by replying to the following questions:

Questions:

Part II: Risk Assessment

In order to evaluate the possible risk impact on the project completion, you have conducted a research (using the four risk events you already listed in part I) that have led to the following results: If one risk event occurs during any activity then it will delay the activity buy 2 days. Hence, and in order to apply the PERT technique, you will define three time estimates as following:

To: The activity time: T (from the table)

Tm: T + Delay from the occurrence of two risk events

Tp: T + Delay from the occurrence of four risk events

Questions:

1. What is the variance of the time for each activity?
2. What is the probability that the project will finish at or before a period equal to 70% of the project expected duration?
3. What is the probability that the project will finish at or before a period equal to 90% of the project expected duration?