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CIVE5233M/CIVE5235M Risk Management Mock Exam 3
发布时间：2023-01-18
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CIVE5233M/CIVE5235M
Risk Management
January 2022
Question 1 [33 marks]
City X is growing fast, and there is an urgent need to expand the capacity of the water treatment plant for the city. The Water Co. is the main service provider for City X with regards to access to fresh water and sanitation; the company is publicly owned and is incorporated as a limited liability corporation. Water Co. is effectively a water utility that will act as a client in a new water treatment plant project. The project is financed to large extent (i.e. 80%) by a commercial lender, as shown in Figure 1. The International Engineering Co. is a foreign engineering firm that has been awarded the contract for designing and building the water treatment plant.
|
Municipality City X |
Equity 60%
Water Co. Lender
Loan 80% of the
cost for the
Treatment Plant
International
Engineering Co.
Figure 1
1. In your view, what risks have been allocated to (1) the Municipality of City X, (2) the Water Co., (3) the International Engineering Co., and (4) the Lender? State any relevant, reasonable assumptions. [10 marks]
2. Are there any additional stakeholders bearing any other relevant risks? [7 marks]
3. What aspects in the Design & Build contract would you assess to understand better which risks are transferred between the Water Co. and the International Engineering Co? [8 marks]
4. From the Lender perspective, what would be your considerations about project risks? Is there any specific threshold requirement you would consider before granting the loan? State any relevant, reasonable assumptions.[8 marks]
Question 2 [33 marks]
1. What is the Montecarlo method? [7 marks]
2. What are the main benefits of combining Montecarlo with Computed Integrated Memory (CIM)? [9 marks]
3. What are the main challenges and limitations of combining Montecarlo with Real Option Analysis in projects? [9 marks]
4. What are the main benefits of using Montecarlo compared with the Program Evaluation and Review Technique (PERT) technique? [8 marks]
Question 3 [34 marks]
A project network is expressed by the following activities that are all characterised by probabilistic durations.
|
Activity Predecessor |
Duration |
Probability |
|
|
A |
|
4 5 |
|
|
B |
A |
2 3 4 5 |
0.3 0.2
|
|
C |
A |
1 2 3 |
0.3
|
|
E |
A |
2 5 |
|
|
D |
A |
5 6 |
|
|
F |
B,C,E,D |
5 6 |
|
|
G |
B,C,E,D |
4 5 |
|
|
H |
F,G |
6 8 |
|
Table 1
You can determine the value K using Table 2 on the following page. This can be determined considering the last two digits of your student ID. For example, if your student ID is 201311356, the value of K is 8%. The input values highlighted in yellow should be adjusted based on this constant.
|
Value K |
Last digit Student ID |
||||||||||
|
0 |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
||
|
|
0 |
4% |
12% |
2% |
13% |
5% |
6% |
4% |
4% |
6% |
2% |
|
1 |
0% |
2% |
4% |
6% |
5% |
3% |
14% |
2% |
13% |
13% |
|
|
2 |
14% |
13% |
9% |
9% |
7% |
10% |
4% |
14% |
2% |
13% |
|
|
3 |
9% |
11% |
8% |
14% |
5% |
7% |
11% |
14% |
5% |
13% |
|
|
4 |
7% |
13% |
1% |
11% |
1% |
3% |
10% |
14% |
10% |
9% |
|
|
5 |
8% |
8% |
5% |
12% |
13% |
13% |
8% |
3% |
8% |
9% |
|
|
6 |
3% |
14% |
11% |
6% |
5% |
12% |
2% |
13% |
15% |
6% |
|
|
7 |
2% |
14% |
6% |
13% |
6% |
5% |
14% |
11% |
6% |
11% |
|
|
8 |
14% |
3% |
1% |
14% |
9% |
5% |
3% |
8% |
13% |
0% |
|
|
9 |
1% |
6% |
5% |
12% |
8% |
13% |
13% |
11% |
4% |
5% |
|
Table 2
1. Determine the probability distribution of the project duration?
