Risk Management 4.
Quantitative Risk Analysis
Primary Steps in Project Risk Management
Risk management, as an integral part of project
management, occurs on a daily basis. With proactive risk
management, we look at projects in a comprehensive
manner and assess and document risks and uncertainty.
Project risk management is an art and a science involving
careful consideration and thought about the project and
the associated uncertainties and risks. WSDOT
recognizes the following steps of project risk
management:
Project Risk Management Process
1. Risk Management Planning
Risk management planning is the systematic
process of deciding how to approach, plan, and
execute risk management activities throughout the
life of a project. It is intended to maximize the
beneficial outcome of the opportunities and minimize
or eliminate the consequences of adverse risk events.
2. Identify Risk Events
Risk identification involves determining and
documenting which risks can affect the project. It
may be a simple risk assessment organized by the
project team, or an outcome of a formal risk
assessment process such as the Cost Estimate
Validation Process, CEVP®.
3. Qualitative Risk Analysis
Qualitative risk analysis involves Project teams
assessing identified risks for probability of
occurrence and impact on project objectives. Teams
may elicit assistance from subject matter experts or
functional units to assess the risks in their respective
fields. Risks are measured by their “quality” in words
rather than quantified in numbers.
Quantitative risk analysis is a way of numerically
estimating the probability that a project will meet its
cost and time objectives. Quantitative analysis is
based on a simultaneous evaluation of the impacts of
all identified and quantified risks.
5. Risk Response
Risk response involves developing options and
determining actions to reduce threats or enhance
opportunities to project objectives. Actions are
identified and assigned to parties that take
responsibility for the risk response. This process
ensures each risk requiring a response has an
“owner.” The Project Manager and the project team
identify a strategy that is best for each risk, and then
select specific actions to implement that strategy.
6. Risk Monitoring & Control
Risk monitoring and control tracks identified
risks, monitors residual risks, and identifies new
risks—ensuring the execution of risk plans and
evaluating their effectiveness in reducing risk. Risk
monitoring and control is an ongoing process for the
life of the project.
Caltrans Risk Management Process
Caltrans project risk management helps the project
manager and the other project members to manage project
risks over the life of each project, enlisting the support
and effort of all of the functional units as the project
moves along the delivery cycle. This includes:
 Better ability for the project team to focus time
and effort on highest rated risks
 A scalable approach, consistent with existing
processes
 Enhanced coordination and transparency with
functional units, which facilitates early
identification of critical risks
 Bridging of functional stovepipes to maintain
focus on project success by all functional units
 Support of the project manager’s mission through
the management accountability process
Risk Assessment
A risk assessment strategy may assist in determining
priorities for action when considering design options or
decisions that may have safety implications.
In addition, when a road safety audit report contains
safety concerns, the Project Engineer or designer may use
a risk assessment approach to help to determine a
response to those concerns.

Objectives of Risk Identification
Risk identification determines what might happen
that could affect the objectives of the project and how
those things might happen.
The objective of risk identification is to understand
what is at risk within the context of the institution’s
explicit and implicit objectives and to generate a
comprehensive inventory of risks based on the threats and
events that might prevent, degrade, delay or enhance the
achievement of the objectives. This necessitated the
development of risk identification guidelines to ensure
that institutions manage risk effectively and efficiently.
Risk Identification Process
The Risk Identification process is a requirement for
the Qualitative Risk Analysis process.
The assigned team members identify the potential
risks (threats and opportunities), using:
 The risk breakdown structure
 The sample risk list
 Their own knowledge of the project or similar
projects.
 Consultation with others who have significant
knowledge of the project or its environment.
 Consultation with others who have significant
knowledge of similar projects.
 Other tools and techniques such as those provided
in Chapter 11, PMBOK
 Documentation reviews
 Information-gathering techniques
 Checklists
 Assumption analysis
 Diagramming techniques
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Assessment of High Collision Sites
Location of Highest Collision Sites
Philippines
 Commonwealth Avenue, Quezon City
 Old Zigzag Road, Atimonan
 Kennon Road, Baguio city
 Halsema Highway, Mountain Province
 Sampaloc Road, Tanay, Rizal
 Sumulong Highway, GMA
 Marcos Highway, Antipolo City
 Trans Central Highway, Cebu
 Toledo City, Cebu
 C-5 Road
Region IV-A CALABARZON
 Old Zigzag Road, Atimonan
 Sampaloc Road, Tanay, Rizal
Province of Cavite
A Method Identifying High Collision Sites
Continuous Risk Profile (CRP) is a new method for
assessing collision risk along a roadway. It addresses the
limitation of a method requiring arbitrary segmentation of
a roadway for analysis.
Continuous risk refers to the concept that the road
under examination is not segmented but, rather, is
considered as a whole. This method produces a
continuous profile, the shape of which reflects the true
underlying risk along the roadway.
The CRP method was developed by Chung and
Ragland for use by Caltrans traffic engineers. However,
the general methods used for continuous risk profiling are
also applicable for any jurisdiction that examines
collision concentration in urban freeway areas.
Continuous Risk Profile (CRP) is developed in four
steps:
1. Calculating a cumulative count of collisions
along the roadway.
2. Estimating the excess risk compared with the
reference risk defined by the user.
3. Pre-filtering frequencies with a small domain
(i.e., the “noise”).
4. Profiling excess risk continuously along the
roadway.
Advantages
 Intuitive interpretation.
 Does not require changes in current Caltrans
collision database.
 Does not require arbitrary segmentation of a
roadway, but shows how risk varies continuously
within or across segments.
 Capable of identifying secondary collision
clusters (i.e., clusters of collisions arising due to
congestion caused by collisions in a primary
cluster).
 When estimating the effect of countermeasures
along the roadway, CRP captures the secondary
benefit in the vicinity (i.e., reduction in collision
rates in the adjacent sites) in graphical form.
Disadvantages
 Not suitable for comparing collision rates in a
short segment or at isolated intersections.
Safety Performance Function
Safety Performance Functions (SPF) is a predictive
N = w NE + (1 - w) NO
tool used to estimate the safety of a highway site with
specific design characteristics and traffic volumes. A
safety performance function can be defined by: where:
NE = annual average expected accident frequency
NO = annual average observed accident frequency
NE = f (AADT, x)
w = specific weighting factor to apply
N = Empirical Bayes Estimate
where:
NE = the expected annual accident frequency Advantages
AADT = Annual Average Daily Traffic  Allows variation as a function of traffic volume.
x = design characteristics and other variables  Allows great flexibility in determining the
relationship between number of collisions and
SPF procedure involves identifying the appropriate traffic volume.
functional form and the significant variables, and then  Allows inclusion of other variables defining
calculating the parameters of the model empirically using individual sites.
data from a combined set of sites. SPFs have been  Accounts for regression to the mean.
successfully used in a wide range of situations.
Disadvantages
Advantages  More difficult to calculate.
 Allows variation as a function of traffic volume.  Less intuitive.
 Allows great flexibility in determining the  Not suitable for analyzing sites (i.e., urban
relationship between number of collisions and freeways) where collision numbers are not
traffic volume. independent.
 Allows inclusion of other variables defining
individual sites.
~END~
Disadvantages
 Does not allow for actual collision counts at the
individual sites in its modeling, in contrast to the
EB approach.
 May not be suitable for analyzing sites (such as Safety in Construction Zone in Highway
urban freeways) for which collision numbers are
not independent.
Exposure or Risk of Construction Workers
Workers in temporary traffic control work zones are
exposed to risk of injury from construction vehicles and
motorized equipment:
 operating in and around the active work zone(s)
Empirical Bayes Method
 operating in traffic control or secondary areas
The Empirical Bayes (EB) method combines two
that support the work zone (ex. temporary batch
different types of information: the expected accident
plants)
frequency based on experience in the entire set of
 entering and leaving the work zone
comparable sites, and the observed frequency of accidents
at a specific site. The expected accident frequency can be
Workers in the roadway are at risk of injury from a
obtained using the SPF calculated for the highway site.
variety of general traffic vehicles entering the work zone:
The observed accident frequency can be based on one or
 Drunk drivers
multiple years. The basic principle of the EB method is
 Sleepy or impaired drivers
that there is important information contained in the actual
 Impatient, reckless drivers
observation made at a particular site that is not used in
 Drivers using cell phones; other inattentive
generating the SPF.
drivers
Making two assumptions (that accident frequency at
 Law enforcement and emergency vehicles
a given site follows a Poisson distribution, and that the
 Disabled vehicles pulling in and parking
average accident frequency of comparable sites follows a
 Lost drivers looking for directions
Gamma distribution) a simple estimate of site safety can
be obtained using the Empirical Bayes method:
Traffic Control Measures Done in Construction Zone
Flaggers and other workers assigned traffic control
responsibilities work very close to motor vehicles and are
at risk of getting struck or run over by them. Flaggers
must be trained in traffic control techniques.

Workers can protect themselves in roadway work

zones by:
 Staying behind protective barriers where possible
 Do not linger or cross into areas around moving
equipment if you have no reason to be there
Site-specific Temporary Traffic Control Plans  Using extra precautions and additional safety
A Traffic Control Plan helps move motorist traffic apparel at night and during poor weather
safely through or around roadway work zones to protect conditions
the public and workers.
• It makes use of traffic control devices, standard
signage, and buffer and transition zones.
• When flaggers will be used on a job lasting more
than one day, there must be a current site-specific
traffic control plan that is kept on site.

Ways to Protect Roadway Workers

Employers must have:
 A comprehensive Site-specific Safety Program
(APP)
 A Temporary Traffic Control Plan in place for the
project site
 Conducted crew meetings and trained all workers
on work zone safety; discussing potential
hazards, equipment blind spots, movement
precautions in the activity area

Workers must:
 Wear high-visibility safety apparel (vest & head
gear in photos)
 Be alert for construction vehicles and equipment
as well as general traffic
 Check surroundings often for hazards
 Know the plan for traffic flow
 Keep a safe distance from traffic
 Communicate with other workers, especially
when there are changes in procedures, locations,
or traffic flow pattern