Risk Management Issues - Assignment Example

Name: Instructor: Course: Date: Week 6: Risk Management Question 1 In the context of infrastructure management, risk means the uncertainty that exists within a project. The common risks in this field include health, safety, financial and environmental risks. Question 2 The purpose of AS/NZS ISO 31000:2009 in the area of risk management is to ensure consistency throughout risk management process and provide a certain degree of assurance to stakeholders. However, it is not a legal requirement to comply with AS/NZS ISO 31000:2009. Nevertheless, it is important to abide by the standard since it provides a clear guideline of how risk should be properly managed and establishes a good framework for risk management. Question 3 Risk management framework refers to set of components providing the basis upon which an organization designs, implements, monitors, reviews and continually enhances its risk management. It is important for an organization to have a solid risk management framework in order to address all risks facing the organization in a timely manner. Question 4 Risk management process involves the following major steps: I. Establishing the context: this involves putting the relevant activities into context in order to aid risk identification and assessment. II. Risk assessment: this includes identification, analysis and evaluation of risk. III. Risk treatment: this refers to finding solution to the identified and assessed risk. IV. Continuous phases: this includes communication and consultation and monitoring and review. Question 5 The parameters which affect the risk management context of an organization are objectives, stakeholders, internal and external environment, risk criteria and context of the risk management process. Articulating these parameters helps in easier identification of the individual risks and hence its assessment. Question 6 Macro level risks are those risks which are capable of affecting the whole project. Micro level risks are those risks which only affect a specific area of the project. The common methods for identifying these risks are risk profiles, checklists, structured interviews, brainstorming and risk breakdown structures. Question 7 EMV of pre-cast concrete columns = $32,000 + ($12,000*0.1) + ($0*0.9) = $33,200 EMV of cast on-site concrete columns = $27,000 + ($30,000*0.1) + ($18,000*0.2) + ($0*0.7) = $33,600 Therefore, it is financially best to use pre-cast concrete columns since it involves lower cost. Question 8 The basic options available when treating threat risks are; I. Risk mitigation: this entails minimizing risk by reducing its probability and severity should it occur II. Risk avoidance: this involves abstaining or abandoning the project that poses risk in totality. In this case the risk is fully eliminated by having nothing to do with the project. III. Risk transfer: this involves transferring the consequences of risk to another party. The risk is usually transferred at a reasonable consideration. A good form of risk transfer is insurance. By taking an insurance cover for the risky project, the associated risks are transferred to the insurer who will make good the risk should the risk materialize. The insurance company will accept the risk at a consideration called premium. IV. Risk acceptance: this involves the recognition that risk exists but nothing is done about it. This is usually the case when the risk in question is not very severe and also its monetary consequence is low. Question 9 The basic options available when treating threat risks are; I. Exploiting the risk: this involves taking advantage of the risk by investing in the opportunity since it may not be available in future. II. Share risk: this involves allowing another party to come and exploit the opportunity in partnership with the company. III. Accept risk: this involves the knowledge that such a risk will occur but the organization does nothing about it and waits until it occurs to exploit it. Week 7: Infrastructure Management Question 1 Quality Control entails ensuring that the quality of a product meets or exceeds expectations whereas quality assurance entails providing confidence that the quality of a product will be fulfilled. These elements are critical to business success as they ensure consistent quality standards to boost or maintain an organization reputation, thus ensuring repeat business. Question 2 It is often advised to comply with quality management standards as it ensures that business thrive due to repeat business that results from meeting consistent quality standards. Organizations realize additional revenue and savings when they eliminate errors throughout operations and generate products at the optimal quality level that the customers desire. Question 3 Quality Management System refers to management technique that directs as well as controls organization regarding quality. It includes processes, activities, resources, and responsibilities among others. It communicates to the employees what is needed to generate the desired quality of products and influences their actions to complete their tasks in line with the desired quality. It sets a vision for the employees, sets standard for them, motivates them, and sets goals for them. It also helps to direct the corporate culture and to fight the resistance to change in the organization. Question 4 Quality policy refers to a document that the management and quality experts develop jointly to express the organization’s quality objectives, the acceptable quality level and the functions of various departments to guarantee quality. Quality objectives are the quality outcomes that organizations intend to realize. The two concepts are related in that the quality objectives have to originate from the quality policy of the organizations. The quality policy offers a basis for creating and assessing quality objectives. It is the top management responsibility to develop them. Question 5 A quality manual is an official document that an organization produces detailing how its quality management system operates. Its includes the organization quality policy and its objectives and a comprehensive description of the quality control system including systems, employees roles and relationships, and all other resources related to production of high quality products and services. Question 6 Project quality plans are designed as a more specific quality management system for a specific project. They define the specifics of how a project plans to put into practice an organization quality management system in order to meet the organization quality goals and objectives. Detail quality plans are a more comprehensive plan to help meet quality goals and objectives. They are used to ensure the quality of a project as they describe the tool and processes and roles for quality activities. They act as a guide in ensuring that project achieves quality in its work processes and deliverables. Question 7 Quality is important in terms of contracting as it ensures contracted services deliver the desired quality for the tenderer. From the perspective of a tenderer, quality matters as it ensures that products and services meet the value desired by the customers. From the perspective of contractors, quality ensures that they are awarded contracts. Week 8: Asset Management and Maintenance Question 1 Infrastructure assets are public physical structures and facilities that are used for the good of the public, that is, it is a public good. Examples of infrastructure assets are roads and public parks among others. Infrastructure assets need to be effectively managed because they are relied upon by all the public hence there is need to ensure its availability by regular maintenance which extends its life. Moreover, the assets should be managed to prevent its deterioration and failure. Question 2 The four major modes by which assets commonly fail are; I. Capacity: Assets fail due to capacity since there is increased demand that cannot be sustained by the asset. II. Level of service: An asset may also fail as a result of level of service being unmet since the design of the asset does not meet the current standards requirements. III. Mortality: Furthermore, the asset can also fail due to the mere fact that it has become aged. This may result to physical failure as a result of asset deterioration. IV. Efficiency: Moreover, an asset may be subject to failure if the operational and maintenance costs are excessively high than can be economically justified. Question 3 Equivalent uniform annual cost can be found by equating all the cash outflows at the same denominator which is the present value. (a) Galvanized corrugated steel pipe (b) Asphalt coated corrugated steel pipe (c) Galvanized corrugated steel pipe Therefore, option (a) is preferable since it represents a lower equivalent uniform annual cost compared to the other alternative. Question 4 The service life of an asset is the useful life of an asset, that is, the life span of an asset. This is the duration that the asset is anticipated to be economically useful for the intended purpose. This duration can be determined by examination of decay and failure of similar assets. Physical assets service life can be determined by use of accelerated laboratory testing whereby the asset is subjected to high demand until it fails within a short time. The service life is then estimated using interpolation or extrapolation of the data obtained. Question 5 Assets vary in their nature and use hence there is no unique way of measuring the performance of all assets. Therefore, performance indicators are used to measure the performance of a particular asset. For instance, the performance indicator of a sewerage plant may be the leakage quantity per annum whereby its performance is considered good if leakage quantity per year was low. Similarly the performance of a factory machine is measured by the number of breakdowns during a year and its performance is considered good if the number of breakdowns are low in nay particular year. Question 6 An organization usually invests in very many assets of different types and its management can be tedious if not well thought of. Therefore, good record keeping of all the assets owned by a company is paramount. This helps to track the current location of the assets in order to utilize them effectively for the growth of the business. Some important records in relation to assets include costs, maintenance, rehabilitation and asset failures. The use of technology in companies has enabled easier asset management through the use of asset registers using specialised digital software. Question 7 The asset component is at the lowest point of an asset registry hierarchy. This represents the point at which decisions to repair, rehabilitate or replace the item is made and the asset is also maintained. At this point the responsible personnel will know what the company owns, its location and its worth. Week 9: Asset Management and Maintenance Question 1 The two major types of maintenance activities are planned maintenance and unplanned maintenance. Planned maintenance is used in cost analyses constantly to maintain the working order of an asset whereas unplanned maintenance is used in reactive and unscheduled maintenance when a fault occurs. Question 2 A maintenance management system is a management system that implements a maintenance methodology. It helps keep track of changes and help keep the case-based reasoned synchronized with its environment. It is important in infrastructure asset management as it helps to deal with planned and unplanned maintenance of a large number of assets. Question 3 Word orders are a record of some work which needs to be, or has been done on an asset. It is created when planned or unplanned maintenance comes up within an MMS and include the nature of the problem, description of the work done or work to be done, resources allocated or used, procedure followed, cause of failure, and severity or priority of the incident. In addition, the dates or times on order details, status of the order and names of persons involved. Work orders are necessary as they help break down costs in a very detailed way and ensure quality assurance and control within the asset maintenance system. Question 4 Continual monitoring and evaluation of asset is important as it helps to collect data from previously unregistered assets, analyze the decay of an asset, and determine if an asset is likely to fail soon, find the cause of failure of an asset, and gather data for future life cycle analyses. In addition, it helps in planning of maintenance and rehabilitation depending on data gathered. Question 5 The three major modes of asset evaluation include user evaluation, functional evaluation and structural evaluation. User evaluation entails subjective views as to comfort, aesthetic factors, convenience and safety of the asset. Functional evaluation entails determining the efficacy of the facility at fulfilling the proposed function. Structural evaluation entails analyzing the structural integrity of the assets including their remaining structural life span and stability. Question 6 Modern technology has increased the efficiency of data acquisition and accuracy of asset monitoring and evaluation by making the gathering of mass data much simpler. Technology such as GPS systems, infrared technology, and pressure sensors gather remote data and send it to large databases. Question 7 Risk management is an important factor in asset maintenance and asset monitoring and evaluation as it dictate how often planned maintenance should be undertaken in order to minimize the possibility of unplanned maintenance. It ensures assets are structurally sound. Question 8 Quality control and quality assurance is exercised in the area of asset data handling by ensuring that the monitoring and evaluation system is closely connected with the organization quality management system. Week 11: GIS Systems and other Technologies Question 1 GIS is used to make links between correlated information sources and assist users to visualize and scrutinize this information via a spatial interface that is commonly a map. In the engineering field, the benefit of GIS include: 1) customer service which include analyzing and auditing of meter reading route, identification of connections that are illegal, call responses and zero-meter reporting. 2) Engineering which includes verification of service availability, assisting inspection, analysis of demographic and land use for demand projections and planning and cost estimation. 3)Finance for instance, depreciation analysis and determination or justification of customer connection fees. 4) Finally, operation which include facility locating and planning, management and planning and the creation of field maps. Question 2 In planning feasibility of establishing a recreation facility, maps offera flexible canvas that communicates essential data such as the location of swimming pools. GIS enables the users in developing a decision-making tree that direct the coalition and explanation of data as part of the feasibility study. Secondly, it assists in establishing a sustainability matrix that evaluates the feasibility of programs and facilities. Question 3 Data maintenance is an activity shaped to keep data running efficiently. In the GIS system, a data input is important because it enables the user to capture, gather, and convert spatial and thematic data into digital form. Typically, the data inputs are derived from a blend of survey documents, hard copy maps and aerial photograph. Question 4 3PE model is one technology used to structure and evaluate asset’s performance. As system support in engineering, it helps in maintaining the performance of the operating assets. The measurement criteria assess the overall system performance since; 1) performance elements is independently measurable. 2) Evaluation is captured in an easily understandable way. 3) The measures are frequently evaluated in regards to the firm`s short and long term objective. Read More