Risk Management

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Risk Management
2014-03-11 21:45:14

Rita's PMP Prep 8th Edition
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  1. Risk Management
    When you work to increase the probability and impact of opportunities on the project (positive events), while decreasing the probability and impact of threats on the project (negative events).
  2. List Risk Factors;
    • the probability that a risk event will occur (how likely)
    • the range of possible outcomes (impact or amount at stake)
    • expected timing for it to occur in the project life cycle (when)
    • the anticipated frequency of risk events from that source (how often)
  3. Risk averse
    someone who does not want to take risks
  4. What is an input to the Identify Risk and Perform Qualitative Risk Analysis processes?
    Scope baseline
  5. The network diagram (part of project documents) is an input to what process?
    Identify Risks
  6. The Schedule Management plan is an input in which two risk management processes?
    • Identify Risks
    • Perform Quantitative Risk Analysis
  7. The Cost Management plan is an input in which two risk management processes?
    • Identify Risks
    • Perform Quantitative Risk Analysis
  8. Metrics documented in the Quality Management Plan are an input to what process?
    Identify Risks
  9. The Human Resource Management Plan is an input to what process?
    Identify Risks
  10. Procurement documents are an input to which process?
    Identify Risks
  11. Project documents (project schedule, quality checklist, issue log, agreements, and statement of work) are all an input to which process?
    Identify Risks
  12. Stakeholder Register is an input to which two risk management processes?
    • Plan Risk Management
    • Identify Risks
  13. What is an output of the Plan Risk Management process, and is an input to all remaining risk processes?
    Risk Management Plan
  14. What is an output of the Identify Risk process, and is an input to all remaining risk processes?
    Risk Register
  15. Work performance data and reports are both an input to what risk management process?
    Control Risks
  16. What occurs when risk management was an integral part of planning?
    • there are no longer huge fires to put out every day - they were eliminated with risk response plans
    • risks are brought up in every meeting to be addressed before they happen
    • normally, if a risk even does occur, there is a plan in place to deal with it
  17. When risk management is an integral part of planning, the PM has time for the following;
    • monitoring and controlling the various aspects of the project, looking for deviations and trends to find them early
    • implementing a reward system
    • keeping stakeholders inform of project progress
    • staying ahead of the project
  18. Name the six sequential risk management processes;
    • Plan Risk Management
    • Identify Risks
    • Perform Qualitative Risk Analysis
    • Perform Quantitative Risk Analysis
    • Plan Risk Response
    • Control Risks
  19. What is a Risk breakdown structure (RBS)?
    An organizational chart that can help you identify and document risk categories.
  20. Name the many ways to categorize or classify risk;
    • Internal
    • External
    • Technical
    • Unforeseeable
  21. What are some sources of risk?
    • Schedule
    • Cost
    • Quality
    • Scope
    • Resources
    • Customer satisfaction
  22. Types of risks?
    • Business risks
    • Pure (insurable) risks
  23. Who should be involved in risk identification?
  24. Risk identification is done during which activities?
    • during project initiating and planning
    • integrated change control
    • when working with resources
    • when dealing with project issues
  25. Describe the Risk Register:
    Think of it as one document for the whole risk management process that will be constantly updated with information as Identify Risks and later risk management processes are completed.
  26. When in the risk management process are risk responses documented?
    • Identify Risks (as potential responses)
    • Plan Risk Responses (as selected response plans)
  27. Qualitative Risk Analysis can also be used to:
    • compare the risk of the project to the overall risk of other projects
    • determine weather the project should be continued or terminated
    • determine weather to proceed to the Quantitative Risk Analysis or Plan Risk Responses processes.
  28. Perform Qualitative Risk Analysis vs Perform Quantitative Risk Analysis
    Qualitative risk analysis uses a standard scale to rate probability & impact. Quantitative risk analysis actually measures to measure actual probability and (impact).
  29. Example of Perform Qualitative Risk Analysis vs Perform Quantitative Risk Analysis
    The rating for a risk in qualitative risk analysis might be a 5, it might be stated as a $40,000 cost impact in quantitative risk analysis.
  30. What actions are apart of the Perform Quantitative Risk Analysis process?
    • Further investigate the highest rated risk on the project
    • Perform sensitivity analysis to determine which risks have the most impact on the project
    • Determine how much quantified risk the project has through expected monetary value analysis or Monte Carlo Analysis.
  31. What is the formula for Expected Monetary Value Analysis (EVM)?
    EVM = P x I

    Probability x Impact
  32. Describe Monte Carlo Analysis:
    • It is usually done with a computer based program because of the intricacies of the calculations
    • Evaluates the overall risk in the project
    • Determines the probability of completing the project on any specific day, or for any specific cost
    • Determines the probability for any activity actually being on the critical path
    • Takes into account path convergence
    • Translate uncertainties into impacts¬† to the total project
    • Can be used to asses cost and schedule impacts
    • Results in a probability distribution
  33. What should you know about a Decision tree?
    • It takes into account future events about making a decision today
    • It calculates the expected monetary value in more complex situations, you can evaluate the cost benefits of several risk responses at once to determine which would be the best option
    • It involves mutual exclusivity
  34. What is the value of Project Management?
    It saves time and money on a project.
  35. Can you eliminate all threats on a project?
    Time and trouble in eliminating ALL the risks and exploiting ALL the opportunities identified on a project would probably not be worthwhile.
  36. What do you do with non-critical risks?
    Document them in a watch list and revisit them periodically.
  37. Would you choose only one risk response strategy?
    No, you can select a combination of choices.
  38. What risk management activities are done during the execution of the project?
    Watching out for watch-listed (noncritical) risks that increase in importance, and looking for new risks.
  39. What is the most important thing to address in project team meetings?
  40. How would risks be addressed in project meetings?
    • By asking:
    • What is the status of risks?
    • Are there any new risks?
    • Is there any change to the order of importance?
  41. Regarding residual risk, to do something if this risk happens is a ______.
    Contingency Plan.
  42. What are the differences between risk Appetites, Tolerance, & Thresholds?
    • Appetite is a high level description of acceptable risk
    • Tolerance is more specific as it refers to a measureable amount of acceptable risk
    • Threshold is the specific point at which risk becomes unacceptable.
  43. List the tools & techniques for Identify Risks process:
    • Documentation Reviews
    • Information-Gathering Techniques
    • SWOT Analysis
    • Checklists Analysis
    • Assumption Analysis
    • Diagramming Techniques
  44. Fall back plans are implemented when?
    Contingency plans are not or partially effective.
  45. What risk response eliminates the threat by eliminating the cause (removing work package or person)?
    Avoid (high - impact/priority)
  46. Describe the risk response strategy mitigate.
    Reducing the probability and/or impact of the threat, making it a smaller risk and  removing it from the list of high risks.
  47. To make another party responsible for the risk by purchasing insurance, performance bonds, or out sourcing the work is________.
    Transfer (Deflect, Allocate)[Low - impact/priority]
  48. Describe the risk response "Accept":
    • If it happens, it happens
    • May involve the creation of a contingency plan
    • Passive acceptance leaves actions to be determined if needed (workarounds)
  49. What is a workaround?
    A unplanned response to a risk that was accepted.
  50. Contingency reserves may only be used for______?
    specific risk it was set aside for.