Risk Sensitivity Analysis
The Risk Sensitivity Analysis is a technique to assess the magnitude of impact from a risk.
When to use
The Risk Sensitivity Analysis is normally used with risks that are considered to be high (red) or medium (yellow) during the Qualitative Risk Analysis such as with a Risk Matrix. This technique is used to quantify the impact and to aid in creating risk response plans.
- Create a project plan with the risk factor being analyzed at the “most likely” or nominal level.
- Holding all other project assumptions constant, vary the risk factor being analyzed to its negative extreme. Assess the impact on project goals such as total project time, cost and benefit.
- Holding all other project assumptions constant, vary the risk factor being analyzed to its positive extreme. Assess the impact on project goals such as total project time, cost and benefit.
- Based upon the magnitude of the impact, consider how to modify the project plan to accommodate the risk.
- If there are multiple risks being analyzed in this manner, the results are often displayed in a Tornado Diagram which shows the positive and negative extremes. A Tornado Diagram orders the risks from top to bottom with the risks having the widest range being at the top.
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