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The objective of the Risk Management Plan is to define the strategy to manage project-related risks such that there is acceptable minimal impact on cost and schedule, as well as operational performance. The purpose of the Risk Management Plan is to establish an approach to monitoring, evaluating, and managing risks throughout the life of the project. The lifecycle of the project is as follows:
At this initial phase plans, specifications and project budget will be thoroughly looked through. Owner's needs and expectations are clarified, specifically focusing on what tasks need to be done and who is responsible for the various assessments of risks. The risks that lie within this stage are whether the views of the different stakeholders vary and may not have mutually acceptable objectives. There is not much support at this stage and ideas are relatively vague. The roots of the uncertainty are evaluated by incorporating the 'Who' entity which is answered in this phase. The responsibilities to the personnel involved in the risk management process are stated below.
The following illustrates the Probability impact diagram. The 'red' area contributes to the risks which are deemed as "High", the 'yellow' as "Moderate" and the 'green' as "Low". Items classified as green are acceptable without further mitigation and will be routinely tracked. Items classified as yellow may require mitigation. For these items, alternative dispositions will be identified and trade-offs conducted to determine the mitigation required. Items classified as red are considered primary risk drivers. For these items, mitigation options will be developed. Red risks will be assessed for impact to budget reserves and will be tracked to closure