Case Study 7.1
a risk assessment for a project based on the following
information:
Probability of Failure
Consequences of Failure
Maturity = .7
Cost = .9
Likelihood
Complexity = .7
Schedule = .7
1. High
Dependency = .5
Performance = .3
2. Chance of economic downturn
2. Low
Client Concerns = .5
Future Business = .5
3. Project funding cut
3. Medium
4. Project scope changes
4. High
5. Poor spec. performance
5. Low
Identified Risk Factors
1. Key team members pulled off project
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Programmer Skill = .3
Calculate the overall risk factor for this project. Would you
assess this level of risk as low, moderate, or high? Why?
7.6 Developing Risk Mitigation Strategies. Assume that you
Based on this information, how would you rate the consequences of each of the identified risk factors? Why? Con-
struct the risk matrix and classify each of the risk factors
in the matrix.
7.3 Developing Risk Mitigation Strategies. Develop a preliminary risk mitigation strategy for each of the risk factors identified in Problem 2. If you were to prioritize your
efforts, which risk factors would you address first? Why?
7.4 Quantitative Risk Assessment. Assume the following
information:
Probability of Failure
Consequences of Failure
Maturity = .3
Cost = .1
Complexity = .3
Schedule = .7
Dependency = .5
Performance = .5
Calculate the overall risk factor for this project. Would you
assess this level of risk as low, moderate, or high? Why?
7.5 Quantitative Risk Assessment. Assume the following
information for an IT project.
are a project team member for a highly complex project
based on a new technology that has never been directly
proven in the marketplace. Further, you require the services of a number of subcontractors to complete the design
and development of this project. Because you are facing severe penalties in the event the project is late to market, your
boss has asked you and your project team to develop risk
mitigation strategies to minimize your company's exposure. Discuss the types of risk that you are likely to encounter. How should your company deal with them (accept
them, share them, transfer them, or minimize them)?
Justify your answers.
7.7 Assessing Risk and Benefits. Suppose you are a member of a project team that is evaluating the bids of potential contractors for developing some subassemblies for
your project. Your boss makes it clear that any successful
bid must demonstrate a balance between risk and price.
Explain how this is so; specifically, why are price and risk
seen as equally important but opposite issues in determining the winner of the contract? Is a low-price/high-risk
bid acceptable? Is a high-price/low-risk bid acceptable?
Why or why not?
CASE STUDY 7.1
Classic Case: de Havilland's Falling Comet
The Development of the Comet
The de Havilland Aircraft Company of Great Britain
had long been respected in the aircraft manufacturing industry for its innovative and high-performance
designs. Coming off its excellent work during World
War II, the company believed that it stood poised on
the brink of success in the commercial airframe industry. The de Havilland designers and executives accurately perceived that the next generation of airplane
would be jet-powered. Consequently, they decreed that
their newest commercial airframe, tentatively called
the Comet, would employ jet power and other leadingedge technology.
Jets offered a number of advantages over
propeller-driven airplanes, the most obvious of which
was speed. Jets could cruise at nearly 450 miles per
hour compared with the 300 miles per hour a propeller could generate. For overseas flight, in particular, this advantage was important. It could reduce
the length of long flights from a mind-numbing two
to three days to mere hours, encouraging more and
more businesspeople and tourists to use airplanes as
their primary method for travel. Further, jets tended
to be quieter than propeller-driven aircraft, giving
a more comfortable interior sound level and ride to
passengers.
De Havilland engineers sought to create a streamlined airplane that could simultaneously carry up to
50 passengers in comfort, while maintaining aerodynamics and high speed. After working with a number
of design alternatives, the Comet began to take shape.
Its design was, indeed, distinctive: The four jet engines
(continued)
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Chapter 7 Risk Management
—saidEUMIIMw
Mkt
FIGURE
The de Havilland Comet
Source: Heanly Mirrorpix/Newscom
were embedded in pairs in the wing roots, at the point
where they joined the fuselage. From the front, the
aircraft looked as though its wings were literally held
in place by the engines. The result of these innovative
engineering designs was an aircraft that had remarkable stability in flight, was sleek in appearance, and
was very fast.
Another distinctive feature of the aircraft was
the pressurized cabin, intended to maintain passenger
comfort at cruising altitudes of up to 30,000 feet. In its
original testing for safety, de Havilland engineers had
pressurized the airframe to more than five times the
recommended air density to ensure that there was a
clean seal. Consequently, they were confident that the
pressurization system would perform well at its lower,
standardized settings. Finally, in an effort to add some
flair to the design, each window in the passenger
cabin was square, rather than the small, round or oval
shapes so commonly used.
Knowing that it was facing competition from
Boeing Corporation to be first to market with a commercial jet, de Havilland's goal was to introduce its
new aircraft as quickly as possible, in order to establish
the standard for the commercial airline industry. At
first, it appeared the company had succeeded: BOAC
(British Overseas Airways Corporation) ordered several Comets, as did Air France and the British military. De Havilland also received some queries from
interested American airline companies, notably Pan
American Airlines. It looked as though de Havilland's
strategy was working; the company was first to
market with a radical new design, using a number of
state-of-the-art technologies. BOAC's first nine Comet
1 s entered service with the airline on May 2, 1952. The
future looked bright.
Troubles
In early May of 1953, a brand new Comet operated by
BOAC left Calcutta, India, and flew off into the afternoon sky. Six minutes later and only 22 miles from
Calcutta's Dum Dum Airport, the aircraft exploded
and plunged to earth, killing all 43 passengers and
crew on board. There had been no indication of problems and no warning from the pilots of technical difficulties. Investigators from Great Britain and India
tended to believe the crash came about due to pilot
error coupled with weather conditions. Evidence from
the wreckage, including the tail section, seemed to
indicate that the aircraft had been struck by something
heavy, but without any additional information forthcoming, both the authorities and de Havilland engineers laid the blame on external causes.
January 10, 1954, was a mild, clear day in Rome
as passengers boarded their BOAC aircraft for the final
leg of their flight from Singapore to London. When the
airplane reached its cruising altitude and speed, it disintegrated over the Mediterranean Sea, near the island
of Elba. Most of the airplane was lost at the bottom
of the sea, but amid the flotsam 15 bodies of passengers and crew were recovered. A local physician who
examined the remains noted: "They showed no look
of terror. Death must have come without warning."
Case Study 7.1
As a safety precaution, BOAC instituted a ban on the
use of Comets until the airplanes had been thoroughly
checked over. Technicians could find nothing wrong
with the new aircraft and, following recertification, the
airplanes were again brought back into service.
Alas, it was too soon. On April 8, only 16 days
after the Comet was reintroduced into service, a third
aircraft, operated by South African Airways, departed
from Rome's Ciampino airport for Cairo, one of the
legs of its regular flight from London to Johannesburg.
Under perfect flying weather, the airplane rapidly
gained its cruising altitude of 26,000 feet and its airspeed of almost 500 miles an hour. Suddenly, the flight
radio went silent and failed to answer repeated calls.
A search of the ocean off the island of Stromboli, Italy,
turned up an oil slick and some debris. Because of the
depth of the water and the time necessary to arrive at
the crash site, there was little to be found by search
crews. Five bodies were all that were recovered this
time, though with an eerie similarity to the victims of
the second disaster: Facial expressions showed no fear,
as though death had come upon them suddenly.
What Went Wrong?
Investigators swarmed over the recovered wreckage of
the aircraft and reexamined the pieces from the first
Calcutta accident while also conducting underwater
searches at the sight of the second crash near the island
of Elba. Guided by underwater cameras, investigators
were able to collect sufficient aircraft fragments (in fact,
they finally recovered nearly 70% of the airframe) to
make some startling discoveries. The foremost finding,
from the recovery of the entire, intact tail section, was
that the fuselage of the aircraft had exploded. Second,
it appeared that engine failure was not the cause of
the accidents. Another finding was equally important:
The wings and fuselage showed unmistakable signs
of metal fatigue, later shown to be the cause of failure
in all three aircraft. This point was important because
it advanced the theory that the problem was one of
structural design rather than simple part failure.
Britain's Civil Aviation Board immediately
grounded the entire Comet fleet pending extensive
reviews and airworthiness certification. For the next
five months, the CAB set out on an extensive series
of tests to isolate the exact causes of the mysterious
crashes. Before testing was complete, one Comet had
been tested literally to destruction, another had its fuel
tanks ruptured, more than 70 complete test flights were
made in a third, and between 50 and 100 test models
were broken up. The results of the extensive tests indicated a number of structural and design flaws.
Although the aircraft's designers were convinced
that the structure would remain sound for 10,000 flight
247
hours before requiring major structural overhauling, simulations showed unmistakable signs of metal
fatigue after the equivalent of only 3,000 flight hours.
Experts argued that even when fatigue levels were
revised downward to less than 3,000 hours, Comets
would not be safe beyond 1,000 flying hours, a ludicrously low figure in terms of the amount of use a
commercial airliner is expected to receive. In addition,
testing of the fuselage offered disturbing indications of
the cause of failure. Specifically, cracks began developing in the corners of the cabin windows, and these
cracks were exacerbated by repeated pressurization
and depressurization of the cabin. The investigators
noted that this result was most pronounced along the
rivet lines near the fuselage windows.
Testing also demonstrated that the wings had a
low resistance to fatigue. At a number of stages in the
tests, serious cracks appeared, starting at the rivet holes
near the wheel wells and finally resulting in rivet heads
in the top wing surface actually shearing off. Engineers
and investigators were finding incontrovertible evidence in the pieces of recovered wreckage that the cause
of the sudden disintegration of the aircraft could only
have been due to cabin pressure blowout. Engineers
suspected that the critical failure of the aircraft occurred
following sudden depressurization, when one or more
windows were literally blown out of the aircraft. This
led to a sudden "gyroscopic moment" as the aircraft
nosed down and began its plunge to earth.
Although at the time no one would admit it,
the handwriting was on the wall. After two years, in
which Comets carried more than 55,000 passengers
over 7 million air miles, the Comet 1 was never to fly
again. De Havilland had indeed won the race to be
first to market with a commercial jet—a race that it
would have been better to have never run at al1. 16
Questions
1. How could risk management have aided in the
development of the Comet?
2. Discuss the various types of risk (technical, financial, commercial, etc.) in relation to the Comet.
Develop a qualitative risk matrix for these risk
factors and assess them in terms of probability
and consequences.
3. Given that a modified version of the Comet (the
Comet IV) was used until recently by the British
government as an antisubmarine warfare aircraft, it is clear that the design flaws could have
been corrected given enough time. What, then,
do you see as de Havilland's critical error in the
development of the Comet?
4. Comment on this statement: "Failure is the price
we pay for technological advancement."
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