 I am Satish Parjani working as assistant professor in Department of Mechanical, Vulture Institute of Technology, Sholapur. We are discussing on project risk process part 2. Learning outcome. At the end of this session, students will be able to understand the probability of risk occurrence and its negative impact with example. For the contents covered, first the basics, second step 2 and 3, determine the probability of risk occurrence and its negative impact and finally the example. Step 2 and 3, determine the probability of risk occurrence and negative impact. I am combining step 2 and 3 because they are prioritization factors. They assist you in vetting the list of risk. These two steps allow you to prioritize all identified threats to the project and help you to determine how much time, effort, staff, money should be devoted to prevent or mitigating each again. This must be accomplished not only in vacuum but with the full input from the team members and subject matter experts. How probable is that risk or each risk I will say and how probable it will come into reality? This question needs to be asked and answered. It is often sufficient to use high, medium, low scale to apply the list of brainstorm risk as in the first step we have noted or jotted down with different stakeholders, team members, cross functional teams with the brainstorming sessions, with emails, phone calls, everything what we have utilized, we have listed or jotted down what are the risk possible risk and this step at an initial level we have to make that list summarize as the impact. If the risk is considered highly probable it receives an H. Probability of that risk is very high yes H. If the probability is medium it receives M, if the probability is low it receives L. Occurrence of risk I am talking probability of occurrence of that risk whether it is high, whether it is medium or whether it is low. And this generally comes with the experience or some forecasting or discussion among the team. These labels should not be applied arbitrarily emphasizing the need of team collaboration or research analysis by project manager. If the risk becomes the reality how badly it will damage the project? This question has to be answered. This is a next question that needs to be asked again and again and it has to be answered. All aspects of the project should be considered when rating the negative impact of any risk. We have to analyze, we have to consider all negative impact of that risk which we are thinking as a big question. If the risk becomes reality how will if it will affect the budget, schedule, resource utilization, scope of work and so on. Then number of questions should be asked impact on its budget whether it is impacting budget whether our budgets are going to overrun what we have planned it out and if it is yes how it is going by how much. If the budget is not okay what is schedule whether the schedule is getting delayed what is impact many times it is seen budget and schedule both are overrun. Resource utilization, scope whether it is within our scope or it is outside scope it is going outside and number of questions can be asked. The output of step 2 and 3 results in all potential risk with corresponding values for probability and its negative impact. Many times certain we think certain impact is there but certain positive impacts are negative impact. So risk means we are now talking of risk means negative impact only a factor which are involved for it is having negative impact and probable what will be in further steps how we are doing that. So in second what is the probability of risk and what is negative impact these are the two questions which I am combining. Let us understand with the great example risk let us say risk we have jotted down what is probability let us say and what is impact risk type A probability of occurrence what I am talking is medium and impact is L similarly risk type B is there probability occurrence again is medium and impact is medium risk C is there probability of occurrence is low and its impact is also low risk D is there probability of occurrence is very very high impact is also very very high. Many companies use this kind of tables as an initial level to jot down the risk and then they use further use with their figures to calculate we will see in a coming slide how that is also done. Now given the assessment of risk A through D in a table it is clear that you should focus most of your efforts on mitigating risk D because its probability of occurrence is very very high and its impact is high. And very little attention if you have some task force or if you have some limited amount of your members which are going to focus. So your first bottleneck point which has to be attacked is on risk type of D because its probability is high and impact is high and very little attention last step or little attention should be given to the risk C because probability is low and this impact is also low. Please remember you could go wrong why I am telling you because this is just a forecast risk C a virus let us in COVID situation a virus which was initially neglected made a huge impact what we are seeing right now COVID case virus at initial level the risk involved was treated the probability but it was very very high yet it is under control but before that it has already made a huge impact it can be the situation. Let us go further how they are assessing how company assess further. Now the same table is there what we have spoken again A B C D this but in practical case what we will observe these are not only the four types of risk we are jorting more than 40 50 depend on the size of project not only the project is breakdown of project parts are project parts are being divided and in each divisions the risk is analyzed it depends the group to group also gets it happens like in one project if all activities are there production team with its members involves the production risk materials team with material risk maintenance team with maintenance risk overseas team with overseas risk so n number of risk are there and their probability they are calculating everybody is calculating this happens in a pro-informing session as I told you when the big kick off is that all these possibilities are taken trying to take care at the initial level they have they are doing maximum much work in the initial to finalize the project should show that it project so that it should not go overrun in this example we have taken very small values just to understand it risk A B C D and probability of is 3 in the scale of up to let us say probability of occurrences we have pointed 1 to 10 out of 1 to 10 means 1 is lower probability and 10 is higher scale operating so the probability let us say we are giving certain numbers and the probability comes out to be 3 for B 7 C 2 D 5 let us say impact is 1 K for A 1 K for B 14 K for C 15 K 53 K for D so the total impact what we have calculated is 3 K 7 K 28 K 15 see again the numbers what we are this is impact numbers it is again the work of the project manager involving finance people accounting people calculate to come to the very nearby numbers or almost exact numbers we can say for forecasting what can impact what is impact so when we see A is impacting but if A risk occurs the impact will be 3 K 3 K dollars in Indian rupees rupees will be there B if the risk occurs 7 K C 28 K D 15 K so this analysis again very clear cut shows risk C will demand more of project teams attention because of relative value of 28 K it should be noted that the same method can be used to focus on schedule impact or even resource utilization risk same logic can be used for schedule impact or resource utilization and the means the priority will be C then if the task force with availability and second risk then D then B then A this type of cycle we need to we have to make attention but it has not seen that A risk totally should be ignored because if that risk occurs many times that risk is associated with if that risk is there then occurrence of C can be more possibility is more many times that risk are also interrelated like if the in current COVID situation if the patient patient is suffering from asthma he has more chances of getting severe conditions for COVID-19 same way if the risk is occurring means C can occur at very fast rate nothing in step and two as you rate probability and impact you assign a value to each risk whether the statement is true or false the yes your answer is right true because we need to calculate impact in numbers and the references used in this session are from MPTL web references and the project management and control book Narendra Singh by Himalaya Publication House. Thank you.