Risk assessment is defined as the process of identifying various hazards associated with the completion of a given project. However, the project to be analyzed in this discussion is the construction of an apartment building. There are various risks associated with any construction, and they should be assessed and analyzed in the best way to make sure the entire project is a success.
Risk Forecasting
Various steps will be used in the process of risk assessment. The first process in the process of risk assessment is the risk forecasting phase. When building an apartment, it will be advisable to forecast on any risk that can affect the construction and completion of the apartment. In the first phase of risk forecasting, it will be possible to determine the quantity and level of risk involved. Learning more about the quantity and level of risk involved in the completion of the entire project, it will be possible to identify the best methods of eliminating or minimizing the effect of the noted risk. Some of the threats that can be noted during this phase include; environmental, financial technical risk. The risk of an environmental issue can be destructive if not well dealt with especially for the construction of the apartment (Louargand, 2006). Various steps can be used in identifying some of these risks. Some of these methods include brainstorming, surveys, and root cause analysis among others.
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Composite Risk Index
The formula of calculating risk equals the probability of an event the multiplied the cost of building the proposed apartment (Rouse, 2015). However, after calculating the values of the realized risks they should be rated at the scale of 1-5; yet, the lower the figure, the higher the chances of the threat not occurring. If after calculating the index one realizes a higher value then it should be noted that such risk may occur.
Risk Option Evaluation
This is the phase when all the risks that may occur during the construction of the apartment have been realized. Three methods can be used in handling or managing the realized risks after analyzing the various risks associated with the completion of the apartment it was recognized that the available money might not facilitate the process of completing the apartment. However, the apartment is to be constructed on a bought land, and it has been noted that everything is not clear about the land hence this may lead to the demolition of the project in the future. However, there are four methods of managing risks which include; risk avoidance, risk reduction, risk sharing, and risk retention (Melony, 2015). One of the things to be done during this process is risk sharing where the entire project will be insured. Again, it will be advisable to outsource for more money because risk avoidance cannot be an option at this stage.
Contingency Plan Creation Plan
However, the construction must go as planned even after facing certain challenges in the form of risks. Through the contingency plan, it will be possible to come up with the best plan of handling the realized threats to the construction of an apartment project (Redman, 2016). However, during this phase, some individuals will be appointed and allowed to come up with the best strategies of mitigating the realized risk.
Plan Evaluation
Even after coming up with a contingency plan it will be advisable to form a team that will be used in making sure the identified risk is well managed. These plans should be evaluated in every stage of construction.
References
Louargand, M. A., & Murdy, B. T. (2006, July 10). Managing risk in apartment development. Retrieved December 5, 2018, from https://onlinelibrary.wiley.com/doi/pdf/10.1002/bref.67
Melony, J. (2015, March/April). Develop a Contingency Plan to Handle Risk in an Operations Management Project. Retrieved December 4, 2018, from https://www.dummies.com/business/operations-management/develop-a-contingency-plan-to-handle-risk-in-an-operations-management-project/
Rouse, M. (2015, April/May). Contingency Planningeval(ez_write_tag([[336,280],'expertprogrammanagement_com-box-3','ezslot_0']));. Retrieved December 4, 2018, from https://expertprogrammanagement.com/2017/09/contingency-planning/
Redman, B. (2016, October 26). Risk Assessment & Contingency Planning. Retrieved December 4, 2018, from https://smallbusiness.chron.com/risk-assessment-contingency-planning-20948.html
