Project Risk Management BBA 231

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What is the primary source of project risk, according to the lecture?

Uncertainty

What is the key difference between failed and successful projects, according to the lecture?

The ability to manage risk

What is the definition of project risk, according to the lecture?

An uncertain event or condition that, if it occurs, has a positive or negative effect on one or more project objectives

What is the primary goal of risk management, according to the lecture?

To manage risk proactively in the best interests of the project objectives Signup and view all the answers

What is the primary benefit of risk management, according to the lecture?

To anticipate and manage unexpected situations that may arise beyond the project manager's control Signup and view all the answers

What is the nature of risk management, according to the lecture?

A structured process Signup and view all the answers

According to the risk management process, what are the two types of risks that require strategic planning?

Threats (negative risks) and opportunities (positive risks) Signup and view all the answers

What is the purpose of identifying a watch list of low priority risks?

To monitor for changes in impact and probability rating Signup and view all the answers

In what situation would a project team decide to accept a risk?

When the risk probability and impact are low or when it is impossible to eliminate all threats from a project Signup and view all the answers

What are the four possible alternatives a project organization can adopt in deciding how to address risks?

Accept risk, minimize risk, share risk, or transfer risk Signup and view all the answers

What is the purpose of the risk register in the risk management process?

To provide an input for developing options and actions to enhance opportunities and reduce threats Signup and view all the answers

What is the output of the risk mitigation process in the risk management process?

Project management plan updates and project document updates Signup and view all the answers

What is the primary purpose of the Timing component in the Risk Management Process?

Defining when and how often the risk management process will be performed throughout the project life cycle and establishing risk management activities to be included in the project schedule. Signup and view all the answers

What is the outcome of the Risk Identification process in the Risk Management Process?

A documentation of the risks that might affect the project, including their characteristics. Signup and view all the answers

What are some techniques used to identify risks in the Risk Identification process?

Brainstorming meetings, Expert opinion, History, etc. Signup and view all the answers

What is the purpose of the Analysis of probability and consequences in the Risk Management Process?

To assess and prioritize risks based on a reasonable estimate of the likelihood of occurrence and potential impacts. Signup and view all the answers

What are the categories of project risks that are commonly identified?

Financial, Technical, Commercial, Execution, Contractual or legal, and Organizational/Human risks. Signup and view all the answers

Why is it important to classify risks into different categories?

To develop a comprehensive risk management strategy by identifying and mitigating risks in each category. Signup and view all the answers

What adjustments can be made to a project plan to avoid risk, and what benefits do these adjustments provide?

Adjustments include extending the schedule or reducing the scope. These adjustments help to eliminate the threat posed by adverse risks, isolate project objectives from the risk's impact, or relax the objective that is in jeopardy. Signup and view all the answers

How does the 'exploit' response strategy for positive risks seek to eliminate uncertainty?

The 'exploit' response strategy seeks to eliminate uncertainty by making the opportunity definitely happen, such as by assigning more talented resources to the project. Signup and view all the answers

What is the key difference between the 'accept' and 'exploit' response strategies for positive risks?

The 'accept' strategy involves being willing to take advantage of an opportunity if it happens, whereas the 'exploit' strategy actively pursues making the opportunity happen. Signup and view all the answers

What is the purpose of forming risk-sharing partnerships or joint ventures in response to positive risks?

The purpose is to allocate ownership to a third party who is best suited to capture the opportunity for the benefit of the project. Signup and view all the answers

How does the 'enhance' response strategy for positive risks modify the opportunity?

The 'enhance' strategy modifies the opportunity by increasing its probability and/or positive impacts, and by identifying and maximizing key drivers of these positive impacts. Signup and view all the answers

What is the primary goal of risk response strategies in project management?

The primary goal is to minimize threats and maximize opportunities to achieve project objectives. Signup and view all the answers

What is the primary objective of a risk transfer strategy in a project organization?

To shift or assign the negative impacts of risk to a third party. Signup and view all the answers

How does a 'Build-Own-Operate-Transfer' provision enable risk sharing among project firms?

By allocating risk proportionately among multiple members of the project through contractual agreements. Signup and view all the answers

What is the key difference between risk transfer and risk sharing strategies?

Risk transfer involves shifting risk to a third party, while risk sharing involves allocating risk proportionately among multiple members of the project. Signup and view all the answers

What is the primary goal of a risk minimization strategy?

To reduce the probability and impact of risk to an acceptable level. Signup and view all the answers

How does Boeing Corporation's approach to vendor relations illustrate a risk minimization strategy?

By maintaining continuous direct contact and intervening in the vendor's production process to ensure quality standards. Signup and view all the answers

What is a key benefit of using a risk response strategy, such as risk transfer or risk sharing?

It allows project organizations to allocate risk to other parties, reducing their potential losses. Signup and view all the answers