Extended risk-analysis model for activities of the project

Project management of product/service orders has become a mode of operation in many companies. Although these are mostly cyclically recurring projects, risk management is very important for them. An extended risk-analysis model for new product/service projects is presented in this paper. Emphasis is on a solution developed in the Faculty of Mechanical Engineering in Ljubljana, Slovenia. The usual project activities risk analysis is based on evaluation of the probability that risk events occur and on evaluation of their consequences. A third parameter has been added in our model: an estimate of the incidence of risk events. On the basis of the calculated activity risk level, a project team prepares preventive and corrective measures that should be taken according to the status indicators. An important advantage of the proposed solution is that the project manager and his team members are timely warned of risk events and they can thus activate the envisaged preventive and corrective measures as necessary.