1st Australian International Conference on Industrial Engineering and Operations Management

Designing Project Risk Contingency using Tornado Diagram

Luthfia Salma Gumbira, Devi Pratami & GN. Sandhy Widyasthana
Publisher: IEOM Society International
0 Paper Citations
Track: Project Management

Company X is a service and production company in the field of telecommunications and information technology (IT). At the end of 2021, Company X undertook a collaborative project, namely a refurbished project. During the implementation of the project in the previous term, Company X often experienced delays in project completion or the number of equipment specified in the contract was not achieved. One of the factors that caused delays because there were several risks that occurred and had a large cost impact for handling them, so Company X could not handle risks immediately because they did not have a budget for risk mitigation. The purpose of this paper is to aim the value of contingency reserves for risk register so it can assist companies to determining priority risks and preparing the required budget if it happened. The method that will be used in this paper is Expected Monetary Value (EMV) and visualization by Tornado Diagram. EVM is statistical calculation to determine the cost that will be used in the future to overcome the risk that happen in a project. Based on this research, the results show that there are 34 risks that are prepared for backup cost if it happens. The total cost required is $ 5.071,09. In addition there are 5 risks that have the highest cost impact based on tornado diagram.

Published in: 1st Australian International Conference on Industrial Engineering and Operations Management, Sydney, Australia

Publisher: IEOM Society International
Date of Conference: December 21-22, 2022

ISBN: 979-8-3507-0542-3
ISSN/E-ISSN: 2169-8767