Risk Analysis Essay Example | Topics and Well Written Essays - 2000 words

Risk Analysis - Essay Example As Wrona (2010, p. 1) states, â€Å"companies that do perform a risk management process on a fairly typical multi-month project (no longer than 12 months) will identify and manage possibly five to ten easily recognized project risks†. According to this statement, risk analysis can reduce the occurrence of some main types of risks, as well as makes companies able to respond effectively to the risks. In this paper, we will discuss two of the main risks that can occur for Ashton Wood Homes which is a Toronto based construction company. The company deals in the construction of homes and buildings and is serving the nation since 1975. According to Zou, Zhang and Wang (n.d.), some of the main risks associated with the business of construction companies are listed in the table below. Ashton Wood Homes Potential Risks Significant Index Scores Design variations 0.49 Occurrence of disputes 0.42 Variations by the client 0.46 Tight project schedule 0.67 Incomplete approval of documents 0. 39 Price Inflation 0.41 Inadequate programming schedule 0.38 General safety accident occurrence 0.30 The company considers risk management necessary to conduct to ensure completion of construction projects within available time and budget. As Flanagan and Norman (1993, p. 45) state, â€Å"attention to risk is essential to ensure good performance†. It is the job of the risk management authorities to undergo risk management and analysis to save time and budget. As Akintoye and MacLeod (1997, p. 31) state, â€Å"risk management is essential to construction activities in minimizing losses and enhancing profitability†. This statement proves the aim of the company to do proper risk analysis in order to minimize the probability of potential risks, as well as to bring improvements in performance and level of revenue. Risk management is imperative for construction companies (Schieg 2006, p. 77; Zu, Liu, & Lu 2012). According to Sharp (2009), proper identification of the risks a nd assessment of their potential impac