Determine the quantified probability of meeting project objectives
Determine cost and schedule reserves
Identify risk requiring the most attention
Create realistic and achievable cost, schedule, or scope targets
Sensivity analysis is a technique to analyze and compare the potential impacts of identified risks. A tornado diagram may be used to graphically depict the results of that analysis. Risks are represented horizontal bars: the longets and uppermost bar represents the gratest risk, and progressively shorter horizontal bars beneath represent lower-ranked risks. The resulting graphic resembles a funnel cloud, tornado.
Expected Monetary Value Analysis
To evaluate a risk, you can look at the probability or the impact, but calculating the expected monetary value is a better measure to determine an overall ranking of risks. The formula for expected monetary value (EMV) is simply probability (P) times impact (I).