Company ABC is doing a pipeline construction project. For simplicity sake, let's assume that ve risks were identied for this project which will have impact of the cost. Probability of happening of each of the risk is 100% (I understand an event with 100% probability of happening, does not qualify as risk, but let's ignore this fact for this exercise). But there is no certainty around the cost impact of risks. Following Table shows the range of cost impacts of the risks based on the expert opinionl Foundation design is based on desktop geotechnical studies. There will be design changes when on site geotechnical data will be obtained All the regulatory permits will not be obtained in time. Construction may not start in time resulting in claims from the contactor. Engineering design will not be finished in time. Vendor will charge premium to expedite the material orders Land acquisition will not be finished in time leading to conflict with construction schedule and hence stand by charges There is certain probability of archeological findings in the right of way. Cost and schedule impact may vary. $150,000 $200,000 $100,000 Cost Impact Most Likely $200,000 $100,000 $275,000 $200,000 $175,000 Maximum You want to decide contingency for the project based on the costs impacts of these risks. Assume that these 5 risks are only source of uncertainty in the project and no other risks exist in the project. Build a model in the excel sheet to calculate the contingency for the project. Use @Risk software to perform the probabilistic analysis. Model should be formulated with the aim to answer the following questions. 1. How much contingency you will recommend for the project so that you 70% condent that contingency will be enough to cover the cost impacts of above listed risks