Upgrade to remove ads
Only $2.99/month

Ch 11 - Project Risk Management

Terms in this set (82)

_______________________ - art and science of identifying, analyzing, and responding to risk throughout the life of a project and in the best interests of meeting project objectives.
project risk management
List at least 2 benefits of risk management.
anticipate/avoid problems, prevent surprises, improve ability to negotiate, meet customer commitments, reduce schedule slips, reduce cost overruns
________ - uncertainty that can have a negative or positive effect on meeting project objectives
risk
Managing ___________ risks involves number of possible actions that managers can take to avoid, lessen, change, or accept the potential effects of risks on project.
negative
___________ risk management is like investing in opportunities
positive
Attitudes towards risk are based on what two themes?
risk appetite, risk tolerance
_________________ - degree of uncertainty an entity is willing to take on, in anticipation of a reward
risk appetite
_________________ - maximum acceptable deviation an entity is willing to accept on project objectives as potential impact
risk tolerance
What 3 preferences are part of the utility theory of risk?
risk-averse, risk-seeking, risk-neutral
_________________ - amount of satisfaction/pleasure received from potential payoff
risk utility
You are considered to be what when more money is at stake, you have a lower tolerance for risk.
risk-averse
You are considered to be what when you have a higher tolerance for risk, and a satisfaction increases when more payoff is at stake.
risk-seeking
You are considered to be what when you have a balance between risk and payoff.
risk-neutral
What is the following a goal of? Minimizing potential negative risks while maximizing potential positive risks
project risk management
What are the 6 processes with risk management?
planning risk management, identifying risks, performing qualitative risk analysis, performing quantitative risk analysis, planning risk responses, controlling risk
Which risk management process is the following?
Deciding how to approach and plan risk management activities for project.
planning risk management
Which risk management process is the following output from?
Risk management plan
planning risk management
Which risk management process is the following?
Determining which risks are likely to affect project and documenting the characteristics of each
identifying risks
Which risk management process is the following output from?
Start of risk register
identifying risks
Which risk management process is the following?
Prioritizing risks based on their probability and impact of occurrence
performing qualitative risk analysis
Which 2 risk management processes is the following output from?
Project documents updates
performing qualitative risk analysis/performing quantitative risk analysis
Which risk management process is the following?
Numerically estimating the effects of risks on project objectives
performing quantitative risk analysis
Which risk management process is the following?
Taking steps to enhance opportunities and reduce threats to meeting project objectives
planning risk responses
Which risk management process are the following outputs from?
Project management plan updates and project documents updates
planning risk responses
Which risk management process is the following?
Monitoring identified and residual risks, identifying new risks, carrying out risk response plans, and evaluating effectiveness of risk strategies throughout project lifetime
controlling risk
Which risk management process are the following outputs from?
Work performance info, change requests, updates to project management plan, other project documents, organizational process assets
controlling risk
_____________________ - documents the procedures for managing risk throughout the project; summarizes how risk management will be performed on a particular project
risk management plan
In addition to a risk management plan, many projects also include _______________, ________________, and _______________.
contingency plans, fallback plans, contingency reserves
_______________ - predefined actions that the project team will take if an identified risk event occurs
contingency plans
_______________ - developed for risks that have a high impact on meeting project objectives, and are put into effect if attempts to reduce the risk don't work
fallback plans
_________________ - provisions held by project sponsor or organization to reduce risk of cost or schedule overruns to an acceptable level
contingency reserves
________________- for known risks
_______________ - funds help for unknown risks
contingency reserves, management reserves
____________________ - hierarchy of potential risk categories for a project
risk breakdown structure
Can identify risk based on _____________ and ________________.
nature of project/products are created, project management knowledge areas (scope, time, cost, quality)
What are 4 common techniques for identifying risks?
brainstorming, Delphi, interviewing, root cause analysis
_____________ - a group attempts to generate ideas or find a solution for a specific problem by amassing ideas spontaneously and without judgement
brainstorming
_____________ - derive a consensus among a panel of experts who make predictions about future developments; uses repeated round of questioning and written responses to take advantage of group input while avoiding the possible biasing effects of oral panel deliberations
Delphi technique
_____________ - collecting info in face-to-face, phone, e-mail, or instant-messaging discussions
interviewing
_____________ - often results in identifying even more potential risks for a project and threats
root cause analysis
_____________ - document that contains results of various risk management processes; tool for documenting potential risk events and related info
risk register
_____________ - specific, uncertain events that may occur to the detriment or enhancement of the project
risk events
_____________ - indicators or symptoms of actual risk events
triggers
People often describe risk probability/consequence as being _____________, _____________, or _____________.
high, medium, low
_____________ - lists the relative probability of a risk occurring and relative impact of risk occurring
probability/impact matrix
_____________ - numbers that represent overall risk of specific events, based on their probability of occurring and consequences to project if they do occur
risk factors
Some teams develop a single number for a risk score simply by multiplying a score for _______________ by a numeric score for ___________________.
probability, impact
_____________________ - identifies risks; maintains awareness of risks throughout life of project by helping to monitor risks
Top 10 Risk Item Tracking
_______________ - list of risks that have low priority but are still identified as potential risks
watch list
_______________ - diagramming analysis technique used to help select the best course of action when future outcomes are uncertain; involves calculating expected monetary value
decision tree
_______________ - product of a risk event probability and the risk event's monetary value
expected monetary value (EMV)
Probabilities are normally determined based on ____________________.
expert judgement
What uses a representation or model of a system to analyze its expected behavior/performance?
simulation
Simulation is usually based on some form of what analysis?
Monte Carlo
What can predict the probability of finishing by a certain date or that cost will be equal to or less than a certain value?
Monte Carlo analysis
Name 4 basic response strategies for negative risks.
avoidance, acceptance, transference, mitigation
Name 4 basic response strategies for positive risks.
exploitation, sharing, enhancement, acceptance
____________ risks - risks that remain after all response strategies have been implemented
residual
____________ risks - direct result of implementing a risk response
secondary
_____ involves doing whatever you can to make sure the positive risk happens.
A. Risk exploitation
B. Risk acceptance
C. Risk sharing
D. Risk enhancement
A. Risk exploitation
A _____ person achieves a balance between risk and payoff.
A. risk-averse
B. risk-seeking
C. risk-fearing
D. risk-neutral
D. risk-neutral
_____ is a fact-finding technique that can be used for collecting information in face-to-face, phone, e-mail, or instant-messaging discussions.
A. Brainstorming
B. The Delphi technique
C. Monte Carlo analysis
D. Interviewing
D. Interviewing
True or false?
Contingency plans are predefined actions that the project team will take if an identified risk event occurs.
True
Identifying risks is a subprocess of the _____ process of project risk management.
A. monitoring and controlling
B. closing
C. planning
D. executing
C. planning
_____ involves eliminating a specific threat, usually by eliminating its causes.
A. Risk avoidance
B. Risk transference
C. Risk acceptance
D. Risk mitigation
A. Risk avoidance
True or false?
A probability/impact matrix or chart lists the relative probability of a risk occurring on one side of a matrix or axis on a chart and the relative impact of the risk occurring on the other.
True
True or false?
The risk register can be created with a simple Microsoft Word or Excel file.
True
True or false?
Quantitative risk analysis need not be done for projects that are large and complex.
True
_____ involves prioritizing risks based on their probability and impact of occurrence.
A. Identifying risks
B. Performing quantitative risk analysis
C. Performing qualitative risk analysis
D. Planning risk responses
C. Performing qualitative risk analysis
The _____ lists the relative probability of a risk occurring and the relative impact of the risk occurring.
A. Top Ten Risk Item Tracking chart
B. requirements traceability matrix
C. probability/impact matrix
D. expectations management matrix
C. probability/impact matrix
_____ involves taking steps to enhance opportunities and reduce threats to meeting project objectives.
A. Performing quantitative risk analysis
B. Controlling risk
C. Planning risk responses
D. Performing qualitative risk analysis
C. Planning risk responses
_____ involves monitoring identified and residual risks, identifying new risks, carrying out risk response plans, and evaluating the effectiveness of risk strategies throughout the life of the project.
A. Controlling risk
B. Planning risk responses
C. Performing quantitative risk analysis
D. Performing qualitative risk analysis
A. Controlling risk
True or false?
A risk-seeking person prefers outcomes that are more uncertain and is often willing to pay a penalty to take risks.
True
True or false?
Risks can have both negative and positive effects on meeting project objectives.
True
_____ involves reducing the impact of a risk event by reducing the probability of its occurrence.
A. Risk acceptance
B. Risk transference
C. Risk avoidance
D. Risk mitigation
D. Risk mitigation
_____ are predefined actions that the project team will take if an identified risk event occurs.
A. Workarounds
B. Management reserves
C. Contingency plans
D. Secondary risks
C. Contingency plans
True or false?
Brainstorming is a systematic, interactive forecasting procedure based on independent and anonymous input regarding future events.
False
True or false?
Risk events refer to specific, certain events that may occur to the detriment or enhancement of the project.
False
_____ involves shifting the consequence of a risk and responsibility for its management to a third party.
A. Risk avoidance
B. Risk mitigation
C. Risk transference
D. Risk acceptance
C. Risk transference
_____ involves numerically estimating the effects of risks on project objectives.
A. Identifying risks
B. Planning risk responses
C. Performing quantitative risk analysis
D. Performing qualitative risk analysis
C. Performing quantitative risk analysis
Those who are _____ have a higher tolerance for risk, and their satisfaction increases when more payoff is at stake.
A. risk-indifferent
B. risk-seeking
C. risk-averse
D. risk-neutral
B. risk-seeking
_____ are unplanned responses to risk events used when project teams do not have contingency plans in place.
A. Fallback plans
B. Contingency plans
C. Triggers
D. Workarounds
D. Workarounds
True or false?
The last step in project risk management is deciding how to address this knowledge area for a particular project by performing risk management planning.
False
THIS SET IS OFTEN IN FOLDERS WITH...