Project Risk Management Overview
40 Questions
4 Views

Choose a study mode

Play Quiz
Study Flashcards
Spaced Repetition
Chat to Lesson

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

What is the definition of a risk in project management?

  • A condition that guarantees positive project outcomes.
  • A known issue that has already occurred.
  • An uncertain event that may impact project objectives. (correct)
  • An unknown event that does not affect projects.

    • What is the primary purpose of risk management?

  • To identify risks and plan for their potential impacts. (correct)
  • To add more complexity to project planning.
  • To delegate responsibilities for handling risks.
  • To eliminate all risks associated with a project.

    • Which type of risk is identified and analyzed with a planned response?

  • Risk that has happened
  • Unknown risk
  • Known risk (correct)
  • Positive risk

    • What is a characteristic of an unknown risk?

    <p>It must have a contingency plan. (D)</p> Signup and view all the answers

    What does a positive risk aim to do in project management?

    <p>Maximize opportunities for beneficial outcomes. (A)</p> Signup and view all the answers

    What would be classified as a risk that has happened?

    <p>An event that is no longer a risk but a project issue. (D)</p> Signup and view all the answers

    Which of the following is a potential impact of a risk on a project?

    <p>It can alter the project's scope, schedule, or cost. (D)</p> Signup and view all the answers

    What might increase the impact of a risk if it occurs?

    <p>Lack of expertise available for project tasks. (B)</p> Signup and view all the answers

    What is the impact of having too many projects at once in an organization?

    <p>Increases timeline demands (D)</p> Signup and view all the answers

    Which process involves defining options, actions, and contingency plans in risk management?

    <p>Plan Risk Responses (A)</p> Signup and view all the answers

    What does the Risk Breakdown Structure (RBS) help to define?

    <p>Categories of risk (B)</p> Signup and view all the answers

    What is one potential positive outcome of an external company delivering a project deliverable ahead of schedule?

    <p>Improved budget impact (A)</p> Signup and view all the answers

    What is the purpose of performing qualitative risk analysis?

    <p>To prioritize risks for further analysis (A)</p> Signup and view all the answers

    What is indicated by the probability scale in risk management?

    <p>The likelihood of a risk occurring (A)</p> Signup and view all the answers

    What could be a negative consequence if an external company fails to deliver on time?

    <p>Budget and timeline impact (A)</p> Signup and view all the answers

    Which of the following best describes the guidelines for determining potential impact?

    <p>Outline impact levels for time and budget (C)</p> Signup and view all the answers

    What does qualitative analysis primarily help identify?

    <p>Low impact low probability risks (B), High impact high probability risks (D)</p> Signup and view all the answers

    What is used in quantitative analysis to gather information about risks?

    <p>Expert Judgement (B)</p> Signup and view all the answers

    What is the Expected Monetary Value (EMV) primarily used for?

    <p>Quantifying the risk of a project (B)</p> Signup and view all the answers

    Which of the following represents a risk probability in the provided example?

    <p>35% (C)</p> Signup and view all the answers

    What does a low impact low probability risk allow project managers to do?

    <p>Assign them very low management priority (D)</p> Signup and view all the answers

    What is the purpose of updating the risk register in quantitative analysis?

    <p>To ensure accurate reflection of current risk information (A)</p> Signup and view all the answers

    What might be a result of performing sensitivity analysis?

    <p>Understanding risk distribution (A)</p> Signup and view all the answers

    In the context of risks, what does 'root cause' refer to?

    <p>The primary factor leading to potential risks (C)</p> Signup and view all the answers

    What is the Expected Monetary Value (EMV) for the risk of high winds?

    <p>-$105.00 (A)</p> Signup and view all the answers

    Which risk has the highest positive EMV?

    <p>Wind generator is usable (B)</p> Signup and view all the answers

    What is the total EMV when summing all risks?

    <p>-$21.00 (C)</p> Signup and view all the answers

    What is the net cost for renting a heavier RV during low winds?

    <p>-13 (C)</p> Signup and view all the answers

    Which tactic is used to deal with risk by preventing it from happening?

    <p>Avoid (B)</p> Signup and view all the answers

    What is the EMV for the risk of an RV rental being unavailable?

    <p>-38.5 (B)</p> Signup and view all the answers

    When renting a lighter RV, what is the total EMV?

    <p>-859 (D)</p> Signup and view all the answers

    What is an example of risk transfer?

    <p>Renting insurance (D)</p> Signup and view all the answers

    What is the process of ensuring that a positive risk occurs in a project?

    <p>Exploit (C)</p> Signup and view all the answers

    Which of the following options describes the strategy of transferring risk to another party?

    <p>Sharing (D)</p> Signup and view all the answers

    What is the purpose of monitoring risks in a project?

    <p>To evaluate risk exposure and individual risks (B)</p> Signup and view all the answers

    Which technique is NOT commonly used for monitoring and controlling risks?

    <p>Escalation meetings (A)</p> Signup and view all the answers

    What action should be taken when a positive opportunity arises?

    <p>Enhance it to maximize benefits (A)</p> Signup and view all the answers

    Which of the following best describes 'Accepting' a positive risk?

    <p>Taking advantage of it when it arises (A)</p> Signup and view all the answers

    What does variance analysis help to assess in the context of risk management?

    <p>Differences between planned and actual performance (C)</p> Signup and view all the answers

    Which of the following describes the concept of 'Reassessment' in risk management?

    <p>Evaluating risk process effectiveness (B)</p> Signup and view all the answers

    Flashcards

    Project Risk

    An uncertain future event or condition that, if it occurs, will impact at least one project objective (scope, schedule, cost, or quality).

    Risk Management

    The process of identifying risks and planning for their potential impact.

    Known Risk

    A risk that has been identified and analyzed, with a plan to respond to it.

    Unknown Risk

    A risk that cannot be proactively managed; a contingency plan is needed.

    Signup and view all the flashcards

    Positive Risk

    A risk that creates opportunities for positive outcomes.

    Signup and view all the flashcards

    Negative Risk

    A risk that creates threats to project goals.

    Signup and view all the flashcards

    Risk that has Happened

    No longer a risk, but an issue.

    Signup and view all the flashcards

    Project Risk Example

    An uncertain event that can impact the scope, schedule, cost, or quality of a project and might produce positive or negative outcomes.

    Signup and view all the flashcards

    Project Condition: Too Many Projects

    A project condition where an organization has overly many ongoing projects, exceeding its capacity to manage them efficiently.

    Signup and view all the flashcards

    Project Constraint: External Delays

    A project constraint triggered by an external company failing to deliver on a critical path deliverable.

    Signup and view all the flashcards

    Project Constraint: External Deliveries

    A project constraint involving deliverables supplied by an external company; delays or unfavorable outcomes impact the overall project.

    Signup and view all the flashcards

    Risk Management Process: Plan Risk Management

    The process of defining how project risks will be managed.

    Signup and view all the flashcards

    Risk Management Process: Identify Risks

    The process of documenting potential project risks.

    Signup and view all the flashcards

    Risk Management Process: Qualitative Risk Analysis

    Prioritizing project risks based on their potential impact.

    Signup and view all the flashcards

    Risk Management Process: Quantitative Risk Analysis

    Using numerical analysis to understand and model risk.

    Signup and view all the flashcards

    Risk Management Process: Plan Risk Responses

    Developing strategies to address the risks identified.

    Signup and view all the flashcards

    Qualitative Risk Analysis

    Assessing risk by understanding the likelihood and impact of potential events, prioritizing risks based on their importance to project success.

    Signup and view all the flashcards

    Quantitative Risk Analysis

    Calculating numerical values for risk likelihood and impact.This goes beyond qualitative assessment.

    Signup and view all the flashcards

    Probability

    The chance or likelihood that a risk will occur.

    Signup and view all the flashcards

    Impact

    The effect or consequence if a risk event occurs and its level of damage or cost.

    Signup and view all the flashcards

    Risk Register

    A document that tracks and manages project risks encountered along their development.

    Signup and view all the flashcards

    Expected Monetary Value (EMV)

    A calculation that estimates the cost or monetary impact of risks considering their probability.

    Signup and view all the flashcards

    Sensitivity Analysis

    A process to determine how sensitive project outcomes are to changes in key variables.

    Signup and view all the flashcards

    Risk

    A potential event or condition that, if it occurs, could have a positive or negative effect on project objectives.

    Signup and view all the flashcards

    Risk Mitigation

    Taking steps to lessen the negative impact of a risk.

    Signup and view all the flashcards

    Wind Generator Usable

    A risk where a wind generator may not be functioning as expected, leading to potential savings.

    Signup and view all the flashcards

    RV Rental Unavailable

    A risk where an RV rental is not available, potentially causing additional costs.

    Signup and view all the flashcards

    High Winds Risk

    A risk associated with stronger than anticipated winds, potentially leading to a considerable financial loss.

    Signup and view all the flashcards

    Mudslide Risk

    A risk of a mudslide causing significant financial damage.

    Signup and view all the flashcards

    Risk Response Strategies

    Methods to address risks, including avoiding, mitigating, transferring, or accepting them.

    Signup and view all the flashcards

    Risk Avoidance

    Preventing a risk from happening, so it does not impact your plans.

    Signup and view all the flashcards

    Positive Risk Response Strategies

    Methods for dealing with positive risks by exploiting, sharing, enhancing, or accepting them.

    Signup and view all the flashcards

    Risk Exploitation

    Actively seeking ways to ensure the risk (positive opportunity) happens and to maximize its benefits.

    Signup and view all the flashcards

    Risk Sharing

    Transferring responsibility for a positive risk to a third party best suited to capture the opportunity.

    Signup and view all the flashcards

    Risk Enhancement

    Increasing the probability and/or positive impact of a positive risk opportunity.

    Signup and view all the flashcards

    Risk Acceptance

    Being willing to take advantage of a positive risk opportunity if it arises.

    Signup and view all the flashcards

    Risk Monitoring

    Tracking identified risks, recognizing new risks, assessing risk impacts, and evaluating risk management effectiveness.

    Signup and view all the flashcards

    Risk Monitoring Tools

    Methods used to track risk, including risk audits, variance and trend analysis, performance measurement, reserve analysis, and status meetings.

    Signup and view all the flashcards

    Risk Monitoring Benefits

    Helps project decisions be based on current information about overall project risk exposure and individual project risks.

    Signup and view all the flashcards

    Study Notes

    Project Risk Management

    • Project risk management is a process used to identify and plan for potential risks that could affect the project.
    • Risks can positively or negatively impact a project's scope, schedule, cost, or quality.
    • Risks are uncertain events or conditions that if realized, would affect at least one project objective.
    • Risks always occur in the future.

    Types of Risk

    • Known Risk: risks are identified and analyzed, with a planned response.
    • Unknown Risk: risks that cannot proactively be managed. Contingency plans are required.
    • Positive Risk: aim to maximize opportunities where good things occur.
    • Negative Risk: minimize potential project threats.
    • Risk that has happened: a past risk that is no longer a risk, but a project issue.

    Risk Examples

    • Environmental Permit: negative if the permit isn't granted on time; positive if the project is granted the permit on the time.
    • Limited expertise: positive if there is no limit on the expertise needed, negative if there is.
    • Multiple Projects: negative if the organization has many demands on it and cannot respond as needed by the projects, positive if projects can share resources effectively.
    • External Company: negative if the company does not deliver on time, positive if the company delivers ahead of time.

    Project Risk Management Processes

    • Plan Risk Management: how to perform project risk management, document which risks may affect the project, and prioritize risks for further analysis.
    • Identify Risks: document which risks may affect a project.
    • Perform Qualitative Risk Analysis: numerical models of risk analysis.
    • Perform Quantitative Risk Analysis: options, actions, and contingency plans.
    • Plan Risk Responses: start and manage the risk plan.
    • Monitor and Control Risks: start and manage the risk plan.

    1 - Plan Risk Management

    • Risk Categories: broad categories of risk the project involves.
    • Risk Breakdown Structure: breaks down risk categories into more specific and relevant project components.
    • Guidelines for determining the potential impact: defines different impact levels for time and budget, example: 2-day impact is a major or minor impact.
    • Probability scale: Defines probability levels, used for analysing risks.

    1 - RBS - Risk Breakdown Schedule

    • RBS is similar to Work Breakdown Structure (WBS)
    • This defines risk categories for the project. and details out major risk areas.
    • Categories include: Technical, External, Organizational, Project management, Estimating, Planning, Controlling, and Communication.

    3 & 4 - Perform Qualitative & Quantitative Analysis

    • Qualitative Analysis: determine the likelihood of a risk and the impact it could have on the project budget.
    • Quantitative Analysis: Gather information, analyze information (sensitivity analysis, expected monetary value, modeling, and simulation), Update the risk register.

    EMV (Expected Monetary Value)

    • A way to quantify risk.
    • This defines and calculates the monetary value of a decision, through the use of probability, impact, and multiple decision nodes and paths.

    EMV Applied on Camping Trip Project

    • Steps to apply EMV on a project: Start with probability and impact of each risk, Calculate the EMV for each risk.

    Applying EMV in 2 Ways

    • Find the EMV value for all risks.
    • Find the monetary value of a decision and compare the two decisions.

    5 - Plan Risk Response

    • What planned responses or tactics can be used to deal with risks.

    4 Ways Negative Risk is Dealt With

    • Avoid: prevent the risk from happening.
    • Mitigate: take action to minimize or reduce the potential damage.
    • Transfer: transfer the risk to another party (e.g., insurance).
    • Accept: accept the risk if it cannot be avoided, mitigated, or transferred.

    4 Ways Positive Risk is Dealt With

    • Exploit: ensure risk happens.
    • Share: allocate the responsibility to a third party that is best to capture the opportunity.
    • Enhance: increase the probability and/or the positive impact of the opportunity.
    • Accept: be willing to take advantage of it if it comes along.

    6 - Monitor Risk

    • What new risks have happened?
    • What risks have not happened?
    • What has been the impact of risks happening?

    Monitor & Control Risks

    • The process of tracking, identifying, and analyzing risk response plans.
    • Enables project decisions to be based on current information about risk exposure.

    Tools & Techniques Used to Monitor and Control Risks

    • Risk reassessment: revisiting previously identified risks.
    • Risk audits.
    • Variance and trend analysis: comparing actual results against planned projections.
    • Technical performance measurement.
    • Reserve analysis: evaluating resources.
    • Status meetings: communicating progress and concerns.

    Studying That Suits You

    Use AI to generate personalized quizzes and flashcards to suit your learning preferences.

    Quiz Team

    Related Documents

    BUSG 2002-2 Project Risk Management Unit 8 Exam Review PDF

    Description

    This quiz covers the fundamentals of project risk management, focusing on the identification, analysis, and planning of potential risks that could impact projects. It explores the different types of risks, including known, unknown, positive, and negative risks, and provides examples of each. Test your knowledge on managing project uncertainties effectively.

    More Like This

    Use Quizgecko on...
    Browser
    Open
    Browser
    Browser