BLCN 28002 Construction Risk Management Assignment

Assignment Part 1)

1a) Your business risk strategy for the co-working construction project in your building is to achieve ‘Zero Incidents’ in terms of Work Health and Safety (WHS) for all on-site works. How would you implement the WHS Act legal responsibilities as part of a positive safety culture shared by all project team members? (5% = 5 marks, approx.1 page)

1b) Evaluate how construction insurances can transfer, mitigate or retain project risks? Why are these important considerations for a corporate risk management strategy? (5% = 5 marks, approx.1 page)1c) Your task: Calculate the Net Present Value (NPV) for the following two scenarios related to your Assignment 1 and 2 Co-working office development project. (5%= 5 Marks)

Scenario 1)

Assumptions: Rental income: Year 1) $150,000; Year 2) $200,000; Year 3) $250,000; Year 4)$300,000. The investment cost incurred included: Construction cost $600,000; Operation costs $100,000; Management costs $50,0000. The assumed discount rate is 6%.

Scenario 2)

Assumptions: Year1) $150,000; Year 2) $200,000; Year 3) $250,000; Year 4) $300,000. The investment cost incurred included: Construction cost $600,000; Operation costs $100,000; Management costs $50,0000. The assumed discount rate is 8%.

Present your two calculations in table format (see week 8 Tutorial workshop example). Comment on your results for Scenario 1 and Scenario 2. Make a recommendation on the target rental income for year 5 for each scenario in order to achieve a present value sum from year 1 to year 5 of minimum $1,000,000. The assumed discount rates remain at 6% and 8% respectively for each scenario.

Assignment Part 2)

Reflection on complex risk management and relevant skills for Construction Managers. (5%= 5 marks, approx. 1 page)

In this unit you have investigated and researched construction risk management from a number of perspectives in order to extend your knowledge and skills relevant to the Australian construction industry. Your task: Reflecting on the process and development of a Risk Breakdown Structure (RBS) for your study project, what do you think are the benefits and limitations in preparing and applying the RBS methodology for a construction project?