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Questions and Answers
What are the common outputs of a qualitative risk assessment?
Which of the following statements is true regarding risks?
Which statement accurately describes minimal slip risk?
When conducting a qualitative analysis using a risk matrix, which risks should be prioritized?
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What is a potential drawback of using mathematical tools in risk assessment?
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What is primarily assessed to understand which work packages could be most affected by risk?
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In risk assessment, what does the risk matrix primarily evaluate?
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Which dimension is most commonly used in a risk matrix for qualitative analysis?
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What factors are essential for assessing risks effectively?
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What could be a consequence of a high probability risk rated at 5 in the risk matrix?
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Which aspect does risk urgency assessment not address?
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What is the risk likely to impact if it results in a shortfall in budget by 10%?
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Which of the following is not a component considered in evaluating available data about risk?
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What is the main goal of the risk avoidance strategy?
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What defines the process of risk mitigation?
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Which strategy involves creating a backup plan if the initial contingency plan fails?
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What is the purpose of contingency reserves?
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What is an example of a secondary risk?
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Which strategy would you use to ensure an opportunity is utilized?
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What characterizes passive acceptance in risk management?
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Which risk mitigation strategy shifts responsibility to another party?
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What are risk triggers?
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What is an effective approach for increasing the probability of realizing an opportunity?
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What is the purpose of contingency reserves in project management?
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What distinguishes management reserves from contingency reserves?
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Which risk mitigation strategy involves replacing a doubtful supplier with a reliable but expensive one?
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An effective monitoring and control process includes which of the following?
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A reserve in project management is generally intended for which purpose?
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What is one of the outputs of risk monitoring and control?
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Identifying new risks throughout a project is part of which process?
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What is the main function of a risk register in project management?
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What is the primary purpose of Quantitative Risk Assessment (QRA)?
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Which of the following is an outcome of conducting a Quantitative Risk Assessment?
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What indicates an Extremely High Risk Score in the provided risk assessment chart?
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Which of the following describes a key characteristic of Quantitative Risk Analysis?
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What should be the focus when identifying risks for Quantitative Risk Assessment?
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How does the probability aspect factor into Quantitative Risk Assessment?
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Which score indicates a Low risk level in the provided risk assessment chart?
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What is one possible reason the Quantitative Risk Assessment process may be skipped?
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Study Notes
Risk Assessment
- Risk assessment involves evaluating the extent of understanding, available data, data quality, and reliability & integrity of the data related to identified risks
- Risk categorization helps identify categories with higher risk and work packages most susceptible to risk
- Risk urgency assessment determines the timeline for potential risk occurrences and guides the project management process
Risk Assessment - Qualitative Analysis
- The risk matrix is widely used for qualitative risk analysis
- A common risk matrix is 3x3 or 5x5, with probability and impact axes
- Impact categories include schedule, cost, and scope
- Standard criteria for risk assessment should be documented in the business risk management procedure
Risk Assessment - Considerations
- Risks can interact in unexpected ways
- A single risk can trigger multiple consequences
- An opportunity for one party might be a threat to another
- Mathematical tools can create a false sense of accuracy and reliability
Risk Assessment - Output
- Qualitative risk assessment results in a ranked and prioritized list of risks
- The risk register should be updated with identified risks
Risk Assessment - Quantitative Analysis
- Quantitative risk assessment (QRA) or Probabilistic Risk Assessment (PRA) provides a numerical estimate of the probability of harm due to a particular event
- QRA offers a more objective evaluation of risk
- The process can be skipped if deemed unnecessary
Risk Assessment - Quantitative Analysis - Aims
- QRA helps determine which risk events require responses
- It assesses overall project risk exposure
- QRA quantifies the probability of meeting project objectives
- It helps determine cost and schedule reserves for potential risks
- QRA identifies risks requiring the most attention
- It establishes realistic cost, schedule, and scope targets
Risk Assessment - Quantitative Analysis - Inputs & Outputs
- Inputs include the risk management plan
- Tools and techniques such as expert judgment are used
- Outputs include updated risk register, work performance information, change requests, and variance/trend analysis
Risk Mitigation
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Strategies for Negative Risks/Threats
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Avoidance:
- Prevents the risk by eliminating the cause or source
- Protects the project from the impact of the risk
-
Mitigation:
- Aims at reducing the impact or probability of the risk event to an acceptable level
- Proactive approach to minimize impact/probability
-
Transfer:
- Shifts responsibility for risk consequences to another party
- Does not eliminate the risk
- Effective for managing financial exposure
-
Avoidance:
Risk Mitigation
-
Strategies for Positive Risks/Opportunities:
- Exploit: Ensures the realization of the opportunity
- Enhance: Increases the probability and/or positive impact of the opportunity
- Share: Allocates ownership of the opportunity to a third party best equipped to capture its benefits
Risk Mitigation
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Strategies for both Threats and Opportunities:
-
Acceptance: Accepting the risk. Two types:
-
Active Acceptance: Develops a contingency plan to execute if the risk occurs
- Contingency plan = Plan B
- Fallback plan = Plan C if Plan B fails
- Passive Acceptance: Addresses risks as they occur, usually for low-ranked risks
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Active Acceptance: Develops a contingency plan to execute if the risk occurs
-
Acceptance: Accepting the risk. Two types:
Risk Mitigation - Framework
- Risk mitigation strategies:
-
Opportunities:
- Exploit
- Enhance
- Share
-
Threats:
- Avoid
- Transfer
- Accept (active or passive)
- Mitigate (Contingency plan, Fallback plan, Workaround)
-
Opportunities:
Risk Mitigation - Output
- Updated Risk Register
- Residual Risks: Risks remaining after plan risk responses
- Contingency Plans: Action plans in case of risk occurrence
- Risk Response Owners: Individuals responsible for risk monitoring, developing response strategies, and implementing them
- Secondary Risks: New risks arising from implementing contingency plans
Risk Mitigation - Output
- Updated Risk Register
- Risk Triggers: Early warning signs indicating a high probability of risk occurrence
- Fallback Plans: Secondary contingency plans in case the primary plan fails
-
Reserves:
- Contingency Reserves: Cover costs for known unknowns discovered during risk management and address residual risks
- Management Reserves: Estimated and included in the project budget, not the baseline, requiring management approval for usage
Risk Monitoring & Control
- This process involves implementing risk response plans, tracking identified risks, monitoring residual risks, identifying new risks, evaluating the effectiveness of the risk process, and conducting risk audits throughout the project
Risk Monitoring & Control: Inputs & Outputs
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Inputs:
- Project management plan
- Risk register
- Work performance data
-
Tools & Techniques:
- Risk reassessment
- Risk audits
- Variance and Trend analysis
-
Outputs:
- Work performance information
- Change requests
- Work performance analysis
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Description
This quiz covers key concepts in risk assessment, including qualitative analysis and risk categorization. Participants will explore the use of risk matrices and the importance of considering interactions between risks. Engage with various strategies to evaluate and manage risks effectively in project management.
