Integrated Risk Management

Risk Management

Risk Reduction

Technical Risk

Expected Risk Exposure / Estimated Profited

***Q.7.1. Determine the expected risk exposure (ERE) value for each scenario: NO mitigation, A, and B (use decision tree and show your works).*** (NO REFERENCE GIVEN, EXERCISE IS SELF-CONTAINED, ACCORDING TO INSTRUCTOR)

During the Engineering and Manufacturing Development Phase, the estimated Profit and Risk components for developing the software is as follow: - Estimated Profit: $75M - pt = Rp = 0.75, software failure - Cf = $140M (cost of failure) Opportunities to reduce the risk level: A. Implement the following three sequential steps will reduce Pf to 0.1 but required $10M investment Step 1: Train engineering team - Add two months buffer to schedule, and required 3 months to reduce the risk level (RL) from 0.75 to 0.5 Step 2: Develop rigor software development processes and tools; required 4 months to reduce RL from 0.5 to 0.3 - Conduct process review and walkthrough. Step 3: Improve software integration test and software release process/method; required 3 months to reduce RL from 0.3 to 0.1 - create a 2 persons team with budget to manage and retire this risk within 2.5 months. B. Add verification & validation processes to verify and validate the software, included bringing industrial SMEs, will reduce Pf to 0.075: required $21.5M and four mitigation Steps. Your task: Q.7.1. Determine the expected risk exposure (ERE) value for each scenario: NO mitigation, A, and B (use decision tree and show your works). Q.7.2. What is your recommendation and why? Q.7.3. Complete the 3-Step Mitigation Plan Table below for option A Month M-Step Exit Criteria WA/FBA Owner Risk Level Step 1 Step 2 Step 3 During the Engineering and Manufacturing Development Phase, the estimated Profit and Risk components for developing the software is as follow: - Estimated Profit: $75M - pt = Rp = 0.75, software failure - Cf = $140M (cost of failure) Opportunities to reduce the risk level: A. Implement the following three sequential steps will reduce Pf to 0.1 but required $10M investment Step 1: Train engineering team - Add two months buffer to schedule, and required 3 months to reduce the risk level (RL) from 0.75 to 0.5 Step 2: Develop rigor software development processes and tools; required 4 months to reduce RL from 0.5 to 0.3 - Conduct process review and walkthrough. Step 3: Improve software integration test and software release process/method; required 3 months to reduce RL from 0.3 to 0.1 - create a 2 persons team with budget to manage and retire this risk within 2.5 months. B. Add verification & validation processes to verify and validate the software, included bringing industrial SMEs, will reduce Pf to 0.075: required $21.5M and four mitigation Steps. Your task: Q.7.1. Determine the expected risk exposure (ERE) value for each scenario: NO mitigation, A, and B (use decision tree and show your works). Q.7.2. What is your recommendation and why? Q.7.3. Complete the 3-Step Mitigation Plan Table below for option A Month M-Step Exit Criteria WA/FBA Owner Risk Level Step 1 Step 2 Step 3