Podcast
Questions and Answers
What factors contribute to the assessment of technical requirements in a product development project?
What factors contribute to the assessment of technical requirements in a product development project?
- Cooperation between different functional boundaries and schedule dependence
- Budget reliability and contractor task ambiguities
- Stability of requirements and quality considerations in design (correct)
- Development process procedures and customer understanding
What does Failure Mode and Effects Analysis (FMEA) add to the risk severity matrix?
What does Failure Mode and Effects Analysis (FMEA) add to the risk severity matrix?
- Probabilities of technical requirements instability
- Functional boundary cooperation assessment
- Risk Value calculation based on cost estimates
- Ease of detection of risk events (correct)
Which of the following best describes the purpose of the risk severity matrix?
Which of the following best describes the purpose of the risk severity matrix?
- To prioritize which risks should be monitored and evaluated (correct)
- To calculate the overall budget reliability
- To assess contractor experience and staffing levels
- To analyze the work environment conditions
What is a potential indicator that a product development project may face issues?
What is a potential indicator that a product development project may face issues?
What does risk value assess in project management?
What does risk value assess in project management?
Which action is specifically aimed at increasing the probability and positive impact of an opportunity?
Which action is specifically aimed at increasing the probability and positive impact of an opportunity?
What type of funding is allocated specifically to cover identified risks?
What type of funding is allocated specifically to cover identified risks?
Which of the following strategies involves notifying appropriate personnel about an opportunity without taking action to pursue it?
Which of the following strategies involves notifying appropriate personnel about an opportunity without taking action to pursue it?
How should contingency funds be managed to cover unidentified risks?
How should contingency funds be managed to cover unidentified risks?
Which method is NOT a technique for managing schedule risks?
Which method is NOT a technique for managing schedule risks?
In opportunity management, what does the term 'share' mean?
In opportunity management, what does the term 'share' mean?
Which of the following best describes time buffers?
Which of the following best describes time buffers?
What is the purpose of exploiting an opportunity in project management?
What is the purpose of exploiting an opportunity in project management?
What does a risk severity matrix help to classify?
What does a risk severity matrix help to classify?
Which risk response strategy focuses on reducing the likelihood of risk events?
Which risk response strategy focuses on reducing the likelihood of risk events?
In the Failure Mode and Effects Analysis (FMEA), what does the risk value represent?
In the Failure Mode and Effects Analysis (FMEA), what does the risk value represent?
Which impact level indicates a scope reduction that is unacceptable to the project sponsor?
Which impact level indicates a scope reduction that is unacceptable to the project sponsor?
Which risk event had the highest impact score in the risk assessment form?
Which risk event had the highest impact score in the risk assessment form?
What is represented by a score of 4 on the likelihood scale in the risk assessment?
What is represented by a score of 4 on the likelihood scale in the risk assessment?
Which type of impact would result in an insignificant cost increase when evaluating a project?
Which type of impact would result in an insignificant cost increase when evaluating a project?
What does the PERT simulation primarily analyze?
What does the PERT simulation primarily analyze?
Which of the following represents a reduction in quality that requires sponsor approval?
Which of the following represents a reduction in quality that requires sponsor approval?
What does a 'Red zone' classification in the risk severity matrix indicate?
What does a 'Red zone' classification in the risk severity matrix indicate?
What is the primary purpose of contingency reserves?
What is the primary purpose of contingency reserves?
Which of the following reflects the process of managing changes in a project effectively?
Which of the following reflects the process of managing changes in a project effectively?
What does an approved change request signify in project management?
What does an approved change request signify in project management?
Which term describes the formal request to alter a project's original scope?
Which term describes the formal request to alter a project's original scope?
What is meant by a 'risk profile' in project management?
What is meant by a 'risk profile' in project management?
In the context of change management, what does 'scope creep' refer to?
In the context of change management, what does 'scope creep' refer to?
What is included in a risk register?
What is included in a risk register?
Which action is NOT typically part of the scope change management process?
Which action is NOT typically part of the scope change management process?
What is the primary goal of a change control process?
What is the primary goal of a change control process?
Which of the following roles in change management involves ensuring that all parties understand the impact of changes?
Which of the following roles in change management involves ensuring that all parties understand the impact of changes?
What does the term 'management reserves' refer to?
What does the term 'management reserves' refer to?
What is the total project budget according to the provided estimates?
What is the total project budget according to the provided estimates?
Which of the following is NOT a benefit of change control systems?
Which of the following is NOT a benefit of change control systems?
What is the function of a change request log in project management?
What is the function of a change request log in project management?
What does risk control primarily involve?
What does risk control primarily involve?
Which step is NOT part of the change control process?
Which step is NOT part of the change control process?
What is included in the project management reserve as shown in the estimates?
What is included in the project management reserve as shown in the estimates?
What is the purpose of establishing a Change Management System?
What is the purpose of establishing a Change Management System?
Which value represents the most optimistic activity time in the weighted average calculation?
Which value represents the most optimistic activity time in the weighted average calculation?
What is the main purpose of using optimistic, pessimistic, and most likely time estimates?
What is the main purpose of using optimistic, pessimistic, and most likely time estimates?
Which formula is used to calculate the weighted average activity time?
Which formula is used to calculate the weighted average activity time?
What does the variance allow the project planner to compute?
What does the variance allow the project planner to compute?
What is the relationship between project duration and the probability of meeting that duration?
What is the relationship between project duration and the probability of meeting that duration?
In the formula for standard deviation of activity time, what do 'b' and 'a' represent?
In the formula for standard deviation of activity time, what do 'b' and 'a' represent?
How is the standard deviation for the project calculated?
How is the standard deviation for the project calculated?
Which of the following correctly identifies the weighted average time estimate formula components?
Which of the following correctly identifies the weighted average time estimate formula components?
Flashcards
Scenario Analysis
Scenario Analysis
A technique for assessing the significance of each risk event by considering its probability of occurrence and its impact on the project.
Risk Assessment Form
Risk Assessment Form
A tool used to evaluate the severity, probability, and detectability of potential risk events.
Risk Severity Matrix
Risk Severity Matrix
A matrix that prioritizes risks based on their severity and probability, helping to identify which risks need to be addressed first.
Failure Mode and Effects Analysis (FMEA)
Failure Mode and Effects Analysis (FMEA)
Signup and view all the flashcards
Probability Analysis
Probability Analysis
Signup and view all the flashcards
Contingency Funds
Contingency Funds
Signup and view all the flashcards
Contingency Reserves
Contingency Reserves
Signup and view all the flashcards
Management Reserves
Management Reserves
Signup and view all the flashcards
Time Buffers
Time Buffers
Signup and view all the flashcards
Add Time Buffers to High-Risk Activities
Add Time Buffers to High-Risk Activities
Signup and view all the flashcards
Add Time Buffers to Merge Activities
Add Time Buffers to Merge Activities
Signup and view all the flashcards
Add Time Buffers to Non-Critical Activities
Add Time Buffers to Non-Critical Activities
Signup and view all the flashcards
Add Time Buffers to Activities Requiring Scarce Resources
Add Time Buffers to Activities Requiring Scarce Resources
Signup and view all the flashcards
Project Budget
Project Budget
Signup and view all the flashcards
Risk Register
Risk Register
Signup and view all the flashcards
Risk Control
Risk Control
Signup and view all the flashcards
Change Control System
Change Control System
Signup and view all the flashcards
Sources of Change
Sources of Change
Signup and view all the flashcards
Change Control Process
Change Control Process
Signup and view all the flashcards
Benefits of Change Control Systems
Benefits of Change Control Systems
Signup and view all the flashcards
Change Request
Change Request
Signup and view all the flashcards
Change Management System
Change Management System
Signup and view all the flashcards
Risk
Risk
Signup and view all the flashcards
Mitigating Risk
Mitigating Risk
Signup and view all the flashcards
Transferring Risk
Transferring Risk
Signup and view all the flashcards
Three Time Estimates
Three Time Estimates
Signup and view all the flashcards
Weighted Average Activity Time
Weighted Average Activity Time
Signup and view all the flashcards
Optimistic Time (a)
Optimistic Time (a)
Signup and view all the flashcards
Pessimistic Time (b)
Pessimistic Time (b)
Signup and view all the flashcards
Most Likely Time (m)
Most Likely Time (m)
Signup and view all the flashcards
Standard Deviation for Activity
Standard Deviation for Activity
Signup and view all the flashcards
Standard Deviation for Project
Standard Deviation for Project
Signup and view all the flashcards
Probability of Meeting Project Duration
Probability of Meeting Project Duration
Signup and view all the flashcards
Risk Impact Scale
Risk Impact Scale
Signup and view all the flashcards
Risk Value Formula
Risk Value Formula
Signup and view all the flashcards
Risk Response Development
Risk Response Development
Signup and view all the flashcards
Likelihood
Likelihood
Signup and view all the flashcards
Impact
Impact
Signup and view all the flashcards
Detection Difficulty
Detection Difficulty
Signup and view all the flashcards
Study Notes
Chapter Seven: Managing Risk
- This chapter focuses on managing risk in project management.
- The risk management process involves identifying, assessing, developing responses to, and controlling risks.
- A risk is an uncertain event or condition that, if it occurs, has a positive or negative effect on project objectives.
- Risk management aims to recognize and manage uncertainties that may arise during project implementation.
- Key elements of risk management include: identifying risks, assessing their impact and likelihood, developing strategies to mitigate risks, and monitoring risk response.
- A risk event graph helps to visualize how the likelihood and cost to fix a risk event changes throughout the project lifecycle.
- Benefits of risk management include: proactive approach, reducing surprises and negative consequences, preparing the project manager to respond appropriately, better control over the future, and improved chances of meeting project objectives.
Learning Objectives
- Describe the risk management process.
- Understand identifying project risks.
- Assess the significance of different project risks.
- Describe the five responses for managing risks.
- Understand the role of contingency plans in risk management.
- Grasp opportunity management and the five approaches to responding to opportunities.
- Recognize that risk management is an ongoing process.
- Describe the change control process.
Chapter Outline
- Risk Management Process
- Step 1: Risk Identification
- Step 2: Risk Assessment
- Step 3: Risk Response Development
- Contingency Planning
- Opportunity Management
- Contingency Funding and Time Buffers
- Step 4: Risk Response Control
- Change Control Management
7.1 Risk Management Process
- Risk Defined: Uncertain events with positive or negative impacts on project goals.
- Risk Events: What could go wrong.
- Impact: Negative consequences of risk events.
- Anticipation: Actions to take before events occur.
- Contingency Plans: Actions to take if risk events happen.
7.3 Step 2: Risk Assessment
- Scenario analysis evaluates the risk significance concerning probability and impact.
- Risk assessment forms evaluate the risk's severity, probability, and detection difficulty.
- Risk severity matrices prioritize which risks to address.
- Failure Mode and Effects Analysis (FMEA) enhances risk severity matrices by factoring in detection ease into the risk value calculation (Impact x Probability x Detection).
- Probability analysis uses statistical techniques to evaluate project risk.
- Decision-trees, net present value (NPV), program evaluation and review technique (PERT) and PERT simulation are statistical techniques in assessing project risk.
7.4 Step 3: Risk Response Development
- Mitigating Risk: Reducing unwanted events' likelihood and impact.
- Avoiding Risk: Eliminating risk or conditions from the project plan.
- Transferring Risk: Shifting risk ownership to another party (e.g. fixed-price contracts, insurance).
- Escalating Risk: Notifying appropriate personnel in the organization.
- Retaining Risk: Accepting risk of an event happening.
7.5 Contingency Planning - Contingency Plan Defined
- An alternative plan for unforeseen risk events.
- Serves to reduce negative impact from risk events.
- Comes into effect only after a risk occurs.
- Proper contingency planning can help avoid critical delays, unnecessary panics, and high-cost resolutions to problems.
7.6 Opportunity Management
- Exploiting Opportunities: Ensuring positive events occur.
- Sharing Opportunities: Distributing ownership to improve project potential.
- Enhancing Opportunities: Improve the positive impact or probability of a chance.
- Escalating Opportunities: Notifying the right project stakeholders about chances.
- Accepting an Opportunity: Acknowledge an opportunity if it arises, without acting on it.
7.7 Contingency Funding and Time Buffers
- Contingency Funds: Funds earmarked to address (identified, and unidentified) project risks.
- Contingency Reserves: Cover identified risks within specific project segments/deliverables.
- Management Reserves: Cover unknown risks across the total project.
- Time Buffers: Time added to activities with high risks to accommodate potential delays.
- Managing Time Buffers: Increase or add buffers to non-critical activities, activities that share or rely on scarce resources, & activities at high risk of delay to reduce the probability of delay.
7.8 Step 4: Risk Response Control
- Maintain a register of all project risks and their status.
- Keep watch for new risks.
- Implement risk responses as outlined in the plan.
- Monitor risk events and adjust the plan when necessary.
- A change management system helps to oversee, track, and manage changes.
7.9 Change Control Management
- Sources of Change: Project scope changes, contingency implementation, & ongoing improvements.
- Change Management Systems: Identify proposed changes, document their impacts (on schedule and budget), formally reviewing/approving/rejecting changes, negotiating and resolving conflicts, communicating changes, assigning responsibility for implementation, adjusting budgets/schedules, and meticulously tracking all authorized changes.
Appendix 7.1: PERT and PERT Simulation
- PERT-Program Evaluation and Review Technique: An approach to manage project duration with a statistical perspective, using a set of time estimates for each activity within a project to derive project probabilities.
- Assumes activity durations have a range that follows a beta distribution employing optimistic, pessimistic, and likely estimations.
- Computation of weighted average time estimates and variances for project activities using PERT estimates help determine the probability of project success, with more prolonged projects having a higher chance of successfully meeting their duration goal. Activity and project frequency distributions are used, alongside formulas for project average activity time and project standard deviation, to arrive at the critical path duration and predicted project duration probabilities.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
Related Documents
Description
Explore the intricacies of managing risk in project management with Chapter Seven. This chapter delves into the risk management process, highlighting key elements like risk identification, assessment, and response development. Understand how to control uncertainties to improve the chances of achieving project objectives.
