Regency Plaza Case Study †Risk Management Process, Review of the Options Essay

3. Risk Management Process of the Regency Plaza ProjectRegency Plaza is a rumpleed-use multi million US dollar cypher carrying quite high s usurps. So the risks of it should be appreciated beforehand and exercised well in company to make sure that the get a line wouldnt everywhere run budget or time and balance with a successful result. Here we use the Four Stage Risk Management Process to evaluate the risk management happened in Regency Plaza project.3.1 Risk IdentificationEvaluation how well the project was analyse and source of the risk determine.In the below table we will take a closer visualize at how well the risk was identified by Kris Hodgkins.Description Identified/not Constraints and Remarks coat the layout of the radical plate Identified Complicated due to condos lying over the hotel rooms over a parking garage, which resulted in fixed column spacing and elevator core locations. Number, mix and size of the condominium units Identified BRA approved maximum numb er of units to be built was 96, which Hodgkins chose opposing Farley, the marketing consultants idea of building spacious 72 units because of Hodgkins expected performance targets of $134.4 million gross sales and $26 million net profit out of the project. Time Constraints Not identified Project was on a tight schedule as Kelly Constructions was convinced to cut off 03 month from the estimated 32 months of the project duration, with a promise of minimal changes to the original design.Eventually with the allowance of individual customization in the units, customers (i.e Millers) involved forceful changes. Manpower deficiency Not identified Neither RHG nor Hodgkins expect customers to require big alterations. But customers did, create constant changes in the project design decreasing manpower and efficiency of the construction. Extra Costs and Delays Not identified RHG allowed customers to modify theirunits as they please as long as they pay for additional equal however custom ers asked for big modifications, the apostrophize for wasted materials and extra cost for demolition and delays in construction would go upon general contractor since they got the project on fixed sum contract. External Factors Not identified It is mentioned that in later phase in the project, sales were low and the local economy was weakening. Customer Dissatisfaction/Complaints Not identified With the deficit manpower and budget overrun, service became slow causing several dealer complaints.3.2 Risk legal opinionBelow is a table for assessing the above-identified risks.Risk Likelihood to occur Impact Effect on the project 1. Issues regarding size of the layout and report plate Certain High Project design is affected because of the constraints. 2. Decisions on number, mix and units of condo to be sold Certain High If 96 units of condominiums to be sold, they would need better marketing and excellent finishing touches.If 72 units to be sold, condo sales might not hit targets Hod gkins was speculate to hit. 3. Time constraints (Project falling behind schedule) High High Delayed project meant extra cost, which gouge lambast the general contractor and customers 4. Manpower deficiency medium High Deficit manpower leads to slower become completion and project falling behind schedule 5. Extra costs and delays forte High for General contractor, Medium for RHG and High for the project As the General contractor works for Fixed Sum learn extra costs, which exceeds budget, would go from their profit. Delays would cause customer satisfaction and loss of sales 6. External factors Low Medium As the target market is wealthy couples, factors like Economy wouldnt matter much so would not affect sales in a drastic manner 7. Customer Dissatisfaction Medium Medium This might lead to loss of some sales/ potential customers because Hodgkins marketing strategy is word of let out and dissatisfied customers wouldnt recommend the condos to their friends/family3.4 Risk Respon se DevelopmentAs mentioned above, many of the risks were highly believably to occur. Should any of those occur, its ultimately project managers task to have a accident plan, which Hodgkins didnt have. She also made wrong assumptions in the cookery phase of the project thinking that customers would require only minimal changes that wouldnt obstruct construction process. As mentioned above some risks posted threat to Hodgkins marketing strategy as well but she didnt consider the risks and eventually failed in developing Risk Response program.3.5 Risk Response ControlAs a result of not having a Risk Response plan, Hodgkins could not reduce the impact or the effect those events had on the project. It is true that, she had to manage a multi-faceted project but she wasnt able to even reduce the additional cost, which was occurring due to her planning and marketing failures, and the deadline being overrun due to various delays.4. Review of The OptionsOption Advantages DisadvantagesInf orm the Millers that its similarly late to allow changes * No extra costs for General contractor * No construction delays * Millers ar able to make the changes themselves * Millers would be dissatisfied * Careful coordination is involve * Sprinkler changes could shut down the entire stratum Push through the changes * Minimizes the work which have to be ripped out * If the cost is acceptable Millers will be satisfied * Its expensive to put a unit on hold * Can take several weeks * It could in return increase the cost to a point where Millers will not be happy with the cost Hire a small general contractor to finish the unit * Changes required can be through with(p) * No extra cost for the general contractor * Construction would not be delayed * Managing two general contractors * Possibility of violence and vandalism* Could be expensive * Kelly Contractors would keep back a very small credit for the work done and materials purchased * Arguments over the responsibility of punch t endencyitems Stop the work on the unit and hand it over to Millers * Millers are in control of the cost and the work to be done * No extra cost for the general contractor * Most banks wouldnt accommodate lending against the unit * Can shrink the target market * Reduces RGHs control over the project * Impact on continuing construction operations on a building which also held a luxury hotel Move Millers to a different unit on the higher floor * Would buy more time * No need to restructure whats already been applied * Construction of other floors are undisrupted * There was no indistinguishable unit available on a higher floor * Interior designers work will go in vain and would have to redesign * Higher floor units are pricierAll options carry advantages as well as plenty of inconveniences but the best option as our point of view would be moving Millers to a different floorMoving the Millers to a higher floor would buy more time so the cost of the changes can be assessed and approve d by the Millers. As theres no interior work done on units on the higher floors there wont be any requirements to demolish anything or to put construction of other units/floors on hold, which would content the general contractor and also Millers can chance on the changes they want after approving the cost. There will be no wasted materials also. This option is more advantages because it would keep the general contractor content with the project.On a disadvantageous note, theres the fortuity that Millers might refuse the option as units on the higher floors are expensive and not identical with the unit they chose and also if Millers chose the unit, their interior designer might have the rework her designs which would cost Millers more. But given the good points and bad points, this option remains as the most feasible one.