assignment 2 risk

7/25/2019 Assignment 2 Risk

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ECM 756 RISK MANAGEMENT FOR

CONSTRUCTION PROJECT

Risk Management Plan !" a #$ngal!% &!$se

'n( ASSIGNMENT

Name ) Ain$l *a+,in M!,ame( Ret,$an

I- N$m ) './5665016

2e3t$"e"4s Name ) -" Intan R!,ani En($t


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Executive Summary of Ayana 2 Storey Bungalow

Project Title: The construction of Ayana 2-Storey Bungalow at Setia Eco Park, Setia Alam

Deelo!er: S P Setia S"n Bh"

Ty!e: 2-Storey #ungalow

Ty!e of $ontract: $ost !lus $ontract % $ost !lus a &i'e" &ee

$ontract Sum: () *,+*+,

$ontract Perio": + months

Sco!e of .orks: Phase inoling/

0i1 nitial E'caation works, $oncrete works, )asonry works, &loor 3 .all

finishes, Painting 3 "ecoration works, Doors 3 .in"ows, Sewerage an"

others

Phase 2 inoling/

0ii1 $om!leting, testing, commissioning an" maintenance of the Phase

of Ayana #ungalow


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Introduction

The o#jectie of (isk )anagement Plan is to i"entify !ossi#le risks ha!!ene" an" mitigation

measures for the "eelo!ment an" construction of Ayana 2 Storey #ungalow house !roject to

#e com!lete" an" "eliere" in + months with the 4uality workmanshi! an" e'clusie that meet

the stakehol"er5s re4uirements6

Purpose

A risk management !lan is a "ocument that a !roject manager !re!ares to foresee risks,

estimate im!acts, an" "efine res!onses to issues6 t also contains a risk assessment matri'6

The ultimate goal of risk management is to increase the !ro#a#ility of !roject an" actiity

success #y focusing attention on !ro#lem areas early an" re"ucing the amount of costly rework

in the future6 &or each an" eery risk, there is the !otential im!act of cost oerruns, sche"ule

"elays an" com!romises in 4uality an" safety if the risk occurs6 7ence, risk management will

#e a!!lie" continuously throughout the !roject life cycle an" will eole an" a"a!t to

accommo"ate the arious !roject !hases6

A 8risk9 is an eent that has the !otential to cause an unwante" change in the !roject6 A risk is

as follow:

A "efina#le eent/

.ith a !ro#a#ility of occurrence/ an"

.ith a conse4uence or im!act if it occurs6

A measure of risk is:

(isk ;ikelihoo" ' m!act6

&or risks, we hae a mitigation !lan6 A mitigation !lan either lowers the !ro#a#ility an"


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Ayana 2 Storey #ungalow is locate" at Phase =E-B>, Setia Eco Park, Shah Alam6 Setia Eco

Park is an e'clusie guar"e" fence-less resi"ential estate locate" in southern Shah Alam6 t

s!rea"s across ?@ acres of freehol" lan"6 As the name suggests, it is a clean an" safe

neigh#orhoo" situate" far away from traffic congestion an" the #ustling cities6

The features of Ayana 2 Storey #ungalows as state" #elow:

Ty!e : 2 Storey Bungalow

Stan"ar" lan" sie : @C ' C

Built-u! : A!!ro'6 *,2* sf

o6 of Be"rooms : F

o6 of Baths : F

&igure is a !icture of Ayana 2 Storey Bungalow house in Setia Eco Park, Shah Alam6

&igure : Phase =E-B> Ayana 2 Storey Bungalow


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This Ayana 2 Storey #ungalow house !roject is using cost !lus ty!e of contract6 $ost !lus

contract is a sum of contractor cost !lus with contractor fee contract where the actual cost to

#uil" your !roject !lus a management an" coor"ination fee for the general contractor6

$ost !lus contract is a contractun"er which a contractor is reim#urse" for thecostsincurre",

an" the !ercentage of such costs as contractorCs!rofit is !ai" on agree" u!on within the

contractor an" the owner6

A cost !lus contract refers to a contract when the contractor gets !ai" for all construction relate"

e'!enses as !reiously agree" with the owner6 Some cost !lus contract can #e "rafte" to set a

limit that will #e use" to restraint the contractor on not to e'cee" that s!ecifie" amount6

A cost !lus contract !roi"es a win-win situation for the contractor, #ecause all risks are

#asically coere", an" all e'!enses are likely to #e !ai" #y the owner6

$ontractors generally look for a cost !lus contract when signing jo#s, #ecause in that case they

will #e !ai" for the jo# an" the su!!lies come at no cost to them either6

Risk Identification

(isk i"entification is the first ste! in the risk management !lan6 Definition of risk i"entification is

the !rocess of "etermining risks that coul" !otentially !reent the !rogram, enter!rise, or

inestment from achieing its o#jecties6 t inclu"es "ocumenting an" communicating the

concern6

This #asic !rocess reiewing the entire !roject of Ayana 2 Storey Bungalow to "etermine the

!otential risks that woul" !reent the !roject to meet !roject o#jecties6

(isks in Ayana 2 Storey #ungalow !roject were i"entifie" #y the !roject team mem#ers,

inclu"ing the contractors "uring the construction !hase which allowe" the i"entification of

significant concerns earlier than otherwise might #e the case an" the i"entification of those risksin critical areas that nee" to #e "ealt with to aoi" a"erse conse4uences or im!acts to the

!roject6

All i"entifie" risks were "ocumente" in Ta#le #elow6
http://www.businessdictionary.com/definition/contract.htmlhttp://www.businessdictionary.com/definition/costs.htmlhttp://www.businessdictionary.com/definition/costs.htmlhttp://www.businessdictionary.com/definition/costs.htmlhttp://www.businessdictionary.com/definition/incurred.htmlhttp://www.businessdictionary.com/definition/contractor.htmlhttp://www.businessdictionary.com/definition/profit.htmlhttp://www.businessdictionary.com/definition/contract.htmlhttp://www.businessdictionary.com/definition/costs.htmlhttp://www.businessdictionary.com/definition/incurred.htmlhttp://www.businessdictionary.com/definition/contractor.htmlhttp://www.businessdictionary.com/definition/profit.html


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Ta#le : (isk "entification

D Ty!e of (isk The !rojectCs "uration coul" #e longer than e'!ecte"6

2 Shortage of material6

* Some costs cannot #e irrecoera#le, #ecause of goo" recor" kee!ing is not enforce"

Di" not meet client5s re4uirement

There is limite" certainty to the !roject owners, #ecause the final cost of the !roject coul"

not #e easily "etermine"+ )ay lea" to "is!utes when trying to recoer construction relate" e'!enses

? ;ow !rofit earne" #y the contractor= A"erse weather con"itions

Risk Analysis

The o#jectie of risk analysis is to !rioritie the risks an" "escri#e the risk situation as

com!letely an" !recisely as !ossi#le6 The i"entifie" risks are inestigate" with regar" to the

!ro#a#ility of their occurrence an" the im!act on the !roject6 After analying the risks, mitigation

measures will #e im!lemente" to re"uce the !ro#a#ility to the !roject6

&or this #ungalow !roject, 4ualitatie analysis was use" to assess all i"entifie" risk6 A numeric

scale of these two grou!s of "ata nee"s to #e conerte" from a fie-!oint scales6 &or #oth the

likelihoo" of occurrence an" conse4uences of the risk, a numeric scale of 0ery low, low,

me"ium, high, ery high1 #y using - is #een conerte"6 (isk score can #e calculate" #y

multi!lying the (isk Pro#a#ility an" (isk m!act6

The metho" for calculating the risk significance in"e' score shoul" oerlook #ase" on the high

leel of conse4uences towar"s !roject o#jecties, eenthough the likelihoo" of occurrence is

low6 ;eel of risk was !rioritie" using the matri' as shown in &igure 26 >reen #o' re!resent

non-significant risk, yellow for minor risk an" re" #o' "esignate" for major risk6

(isk ;ikelihoo" ' m!act


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&igure 2: (isk )atri'

The following Ta#le 2 shows the !ro#a#ility, im!act an" risk score calculate" for eery i"entifie"

risk for the #ungalow house !roject6

Ta#le 2: (isk score for each ty!e of risks

I !ype of risk Pro"a"ility Impact Risk Score

The !rojectCs "uration coul" #e longer thane'!ecte"6 * #2

2 Shortage of material6 * #$

*

Some costs cannot #e irrecoera#le,#ecause of goo" recor" kee!ing is notenforce"

* * %

Di" not meet client5s re4uirement #&

There is limite" certainty to the !rojectowners, #ecause the final cost of the!roject coul" not #e easily "etermine"

* 2 &

+

)ay lea" to "is!utes when trying to recoer

construction relate" e'!enses * #$

? ;ow !rofit earne" #y the contractor 2 '

= A"erse weather con"itions * 2 &


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Base" from the risk score, there are highest risks that will re4uire mitigation measures6 The

highest risk only will #e highlighte" an" to #e focus for mitigation measures6 Ta#le * will show

the mitigation measures for each major risks of the #ungalow house !roject6

Ta#le *: )itigation measures

I !ype of risk Pro"a"ility ImpactRisk

Score

(itigation measures

The !rojectCs "uration coul"

#e #ehin" the sche"ule * #2

)eet an" hae a "iscussion

with the owner to e'!lain why

the !roject cannot com!lete

on the com!letion "ate6

2 Shortage of material * #$

$ontrol the material usage6

A cost !lus contract can lea"

to misuse of construction

material, so it might en" u!ac4uiring more material than

reasona#ly e'!ecte"6

*Di" not meet client5s

re4uirement #&

Start with a "etaile" sco!e of

work, with "etaile" !lans an"

s!ecs, so #oth !arties hae a

clear un"erstan"ing of the

work to #e "one6

)ay lea" to "is!utes when

trying to recoer

construction relate"e'!enses

* #$

egotiate critical items that

coul" lea" to "is!utes, such

as oerhea" e'!enses an"

main office associate" costsan" rea" carefully the

cost-!lus-contract !roisions

#efore start the !roject

Base" on the Ta#le * a#oe, mitigation measures hae #een i"entifie" to minimie the

!ro#a#ility of the #ungalow house !roject thus can aoi" the une'!ecte" things to #e ha!!ene"

to the !roject that can lea" to !roject "elay, contractor suffere" from significant losses an"

others6

assignment 2 risk

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