You are the project manager of your project.
You have to analyze various project risks.
You have opted for quantitative analysis instead of qualitative risk analysis.
What is the MOST significant drawback of using quantitative analysis over qualitative risk analysis?
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A. B. C. D.B.
Quantitative risk analysis is generally more complex and thus is costlier than qualitative risk analysis.
Incorrect Answers: A: Neither of the two risk analysis methods is fully objective.
Qualitative method subjectively assigns high, medium and low frequency and impact categories to a specific risk, whereas quantitative method subjectivity expressed in mathematical "weights"
C: To be effective, both processes require personnel who have a good understanding of the business.
So there is equal requirement of skilled personnel in both.
D: Quantitative analysis generally has a better buy-in than qualitative analysis to the point where it can cause over-reliance on the results.
Hence this option is not correct.
Quantitative analysis and qualitative analysis are two approaches to analyzing project risks. Quantitative analysis uses data, metrics, and mathematical models to assess and prioritize risks, while qualitative analysis relies on expert judgment, experience, and intuition to identify and assess risks.
The most significant drawback of using quantitative analysis over qualitative risk analysis is that it requires a higher reliance on skilled personnel. Quantitative analysis involves collecting and analyzing large amounts of data, which requires specialized knowledge and skills in statistical analysis, data modeling, and risk assessment. This means that the project manager and team members must have a high level of expertise in these areas or need to hire external experts to perform the analysis.
In addition to the reliance on skilled personnel, there are other potential drawbacks of using quantitative analysis. These include the higher cost associated with collecting and analyzing data, the potential for lower objectivity due to assumptions and biases in the data or models used, and the potential for lower management buy-in due to the complexity of the analysis and the difficulty in communicating the results effectively to non-experts.
It is essential for project managers to carefully consider the benefits and drawbacks of each approach when selecting a risk analysis method for their project. Depending on the project's objectives, timeline, budget, and available resources, a qualitative or quantitative approach may be more appropriate.