Republic of the Philippines

Polytechnic University of the Philippines

Open University System
Sta. Mesa, Manila

CLASS ASSIGNMENT NO. 2

MSCM604 Construction Quality Risk Management

Dr. Manuel Muhi

ENGR. NATHANNIEL P. GONZALES

Master of Science in Construction Management

June 24, 2023

 Republic of the Philippines
Polytechnic University of the Philippines
Open University System
Sta. Mesa, Manila

1. Explain briefly why the customers of the project have requested additions to the

project scope. The project manager notifies you that additional risk planning will

need to be added to the project schedule.

Adjustment of the scope of the project is an official decision made by the project

manager and the client to change a feature, to expand or reduce its functionality. This

generally involves adjusting the cost, budget, other features, or the timeline. Scope

change is necessary in order for the project to stay adaptable and the common causes

for this change are: market changes, project site conditions, government interventions,

client opinion and other factors that contributes to such adjustments. Whatever the

causes are, scope changes can significantly impact the outcome of a project. Often, it

can lead to a scope creep that causes diversions of your resources, disruptions to your

budget, delays and compromised project quality. These are some possible risks of a

project that undergoes adjustments of scopes.

Project risk is the potential that a circumstance could arise that alters the outcome

of a project, for better or for worse. These risks may affect the development of the

project, so therefore may alter also the main purpose of the project after its

completion. This is the significance of having additional risk assessment/planning on

a project schedule prior to the adjustment of the project scope.

2. You are the project manager for a project that will create a new and improved the

construction company’s processes. You would like to poll experts within your

company with a simple, anonymous form asking about any foreseeable risks in the

design, structure and intent of the company. With the collected information

subsequent anonymous polls are submitted to the group of experts. What kind of

technique is this and please elaborate.

 Republic of the Philippines
Polytechnic University of the Philippines
Open University System
Sta. Mesa, Manila

This is a technique in risk management which is also known as the Delphi

Technique. In risk management, it is the process of consulting field experts to predict

how risky a certain action would be. Between a panel of experts and several rounds of

feedback and response modification, a conclusion is reached by the panel. This

method helps to analyze the risk and make strategic decisions from objectives and

experience-based opinions of a group of specialists. Gathering data from a group of

experts will always be of higher quality compared to the opinion of a single

individual.

3. Which risk analysis technique provides the project manager with a risk ranking?

Elaborate how this technique is very important in risk analysis.

The technique that provides ranking on the severity of the risks is called

Probability/consequence matrix or also known as a tool for the conduct of qualitative

risk analysis. It is a prominent method of assessing risk severity when conducting a

qualitative risk analysis, and it can assess risks at all levels of the company. The

probability/consequence matrix is a practical method of ranking the severity of

various risks by calculating the risk's potential impact (multiplying the likelihood of

risk occurrence against the impact of the risk). Not only does this allow companies to

better determine the overall severity of a risk, but it also allows you to determine the

main contributing factors to each potential risk.

4. You are the project manager and the project team are actively monitoring the

pressure gauge on a piece of equipment. Your engineer recommends a series of

steps to be implemented should the pressure rise above 80 percent. The 80 percent

mark represents what?

 Republic of the Philippines
Polytechnic University of the Philippines
Open University System
Sta. Mesa, Manila
The 80% mark is a risk threshold. A risk threshold is the point at which risk becomes

unacceptable. Upper limit of the 80% mark of the pressure gauge may result to a high

severity of risk that are out of organization’s control which will probably affect the

productivity of the equipment and the safety of equipment operators. This may also

lead to operational failure of the equipment. Thus, the project manager must have

appropriate risk assessment and mitigation plans in order to not meet or exceed the

risk threshold limit of 80%.

5. You are presented with the following table:

Risk Event Probability Impact Cost/ Benefit Expected Monetary Value

(EMV)
1 0.20 -4000 -800

2 0.50 5000 2500

3 0.45 -300 -135

4 0.22 500 110

5 0.35 -4500 -1575

Contingency Reserve 100

What is the EMV for Risk Event 3?

a) 135

b) -3000

c) 45

d) -135
 Republic of the Philippines
Polytechnic University of the Philippines
Open University System
Sta. Mesa, Manila

Prepare a Decision Tree. Choose the best answer. Please justify your answer.

From the decision tree presented above, the risk event 2 which benefits of about

$5000 and a probability of occurrence of 0.50, has the most favorable risk among the five risk

events. Since risk event 2 has the largest expected monetary positive value, then the

organization will probably gain from it. While risk event 5 has the smallest expected

monetary value which means that the organization will lose a benefit from it. The positive

risks which are risk events 2 and 4 play a crucial role in calculating the contingency reserve

because this will lower the cost needed to cover all identified risks in the case scenario.