Construction Project Risk and Decision Making

Department of Civil and Environmental Engineering

Pusan National University
Midterm Exam Spring Semester, 2021
Student: NGUYEN THI HOA PHUONG - 202199119

COFFEE SHOP CONSTRUCTION PROJECT

1. The process of coffee shop construction project

The coffee shop will suit customers who want to experience a special
taste of coffee and wonderful space. The coffee shop will construct with
one basement and 3 floors with fitted sitting areas and tables and can
host up to 60 customers. The basement will be a parking area, the first
floor will be the counter to order coffee and payment, and prepare area,
kitchen, storage. The second floor is the area for those who want their
own space. And the third floor is an area for groups of friends. The
coffee shop will also provide customers with free Wi-Fi, books, and
entertaining games.

2. The need of risk management in this project

Projects always have a multitude of potential risks, so the fact that some
incidents happen without a contingency plan will lead to the project goal
being affected. That can delay construction, not enough budgets to
build and maintain a project, reduce product quality, disrupt within the
organization, and possibly close the coffee shop.
 3. The risk breakdown structure (RBS) in this project

4. Checklist based on the risk breakdown structure (RBS) in this

project
RBS Level
RBS Level 1 RBS Level 2 Example risks
0
The location is not favorable for the
Site/ Location
construction
Construction Weather maybe unseasonable
Weather
Risk (better or worse than expected)
Contractor Lack of experience in construction
Design It may have design flaws
Competitors Increase in competition
Project Risk
Resourcing It may be possible to recruit existing
subcontract staff permanently
Business Risk Strategy becomes less effective
Strategic
over time

Quality of product Available materials may be of

insufficient quality
Organizational Team support Lack of number of staff
 Poor attendance Poor team communication
Customer issues Change in demand
Risk Lack of project funding
Funding Fund availability does not meet
cashflow forecast

Reputation Improved reputation may increase

availability of funds and resources
Program/ Other projects may divert key
Project portfolio management resources
Management Operation
Risk management Design may expose weaknesses in
existing products or processes
The client 's requirement may be
Communication
misunderstood
5. The high-impact risk factors in this project
The high – impact risk factors of this project are contractor risk, design
risk and funding risk.
6. My response to these risk
 My response to the high – impact risk factors:
- With the contractor risk: avoid risk by the way selection of a
contractor with many years of experiences.
- With the design risk: avoid risk by the way design special
construction methods suitable for the project requirements.
- With the funding risk: reduce risk by the way prepared a backup
fund.
 The way to react to the risk impact
- Avoid the risk by completely eliminating a process or activity.
- Remove the risk by removing the source of the risk.
- Reduce the level of the risk through controls.
- Accept the risk.