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The project budget baseline for XYZ is $3,500,000 with the following risks assessment: Risk Event Probability...

The project budget baseline for XYZ is $3,500,000 with the following risks assessment: Risk Event Probability Impact Expected Value Parts delayed in Customs 40% $100,000 Strong labor training equates to quick assembly 60% ($50,000) Heat sink assembly requires rework 85% $150,000 (source: Paul Martinsen, PMP)\

3. Calculate the adjusted project budget baseline for XYZ project.

Solutions

Expert Solution

Please see the table below. Please be guided by the second row to understand the mathematics. Figures in parenthesis, if any, mean negative values. All financials are in $.

Risk Event Probability Impact Expected Value
Pi Vi Pi x Vi
Parts delayed in Customs 40%         100,000                   40,000
Strong labor training equates to quick assembly 60%          (50,000)                 (30,000)
Heat sink assembly requires rework 85%         150,000                 127,500
Total                137,500

Hence,  the adjusted project budget baseline for XYZ project = Baseline budget + Adjustment required due to risk events = 3,500,000 + 137,500 = $  3,637,500

jeff jeffy answered 10 months ago
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