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PMP (Rita's Hot Topics) > 10) Risk Management > Flashcards

10) Risk Management Flashcards

1
Q

What is the process of risk management?

A
  • Plan Risk Management
  • Identify Risks
  • Perform Qualitative Risk Analysis
  • Perform Quantitative Risk Analysis
  • Plan Risk Responses
  • Control Risks
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2
Q

What is the key output of the Plan Risk Management process?

A

Risk management plan

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3
Q

What is the key output of the Identify Risks process?

A

Risk register

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4
Q

What key outputs of the Perform Qualitative Risk Analysis process are added to the risk register?

A
  • Risk ranking for the project
  • Prioritized risks and their probability and impact ratings
  • Risks grouped by category
  • List of risks requiring additional analysis and response
  • List of risks requiring analysis in the near term
  • Watch list (noncritical risks)
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5
Q

What key outputs of the Perform Quantitative Risk Analysis process are added to the risk register?

A
  • Prioritized list of quantified risks
  • Initial amount of contingency time and cost reserves needed
  • Possible realistic and achievable completion dates and project costs
  • Quantified probability of meeting project objectives
  • Trends in quantitative risk analysis
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6
Q

What key outputs of the Plan Risk Responses process are added to the risk register?

A
  • Residual risks
  • Contingency plans
  • Fallback plans
  • Risk owners
  • Secondary risks
  • Risk triggers
  • Contracts
  • Reserves for time and cost
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7
Q

What are the key outputs of the Control Risks process?

A
  • Work performance information
  • Risk register updates
  • Change requests
  • Updates to the project management plan and project documents
  • Updates to organizational process assets
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8
Q

What key outputs of the Control Risks process are added to the risk register?

A
  • Outcomes of risk reassessments and risk audits
  • Results of implemented risk responses
  • Updates to previous parts of risk management
  • Closing of risks that are no longer applicable
  • Details of what happened when risks occurred
  • Lessons learned
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9
Q

What is a risk?

A

A future occurrence that may or may not happen that can have a positive (opportunity) or negative (threat) impact on the project

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10
Q

What are the four key factors that need to be determined for each risk?

A
  • Probability
  • Impact
  • Timing
  • Frequency
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11
Q

A person who is risk averse is:

A

Unwilling to take risks

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12
Q

Define risk appetite, risk tolerance, and risk threshold.

A

Risk appetite:

A general, high-level description of the acceptable level of risk

Risk tolerance:

a measurable amount of acceptable risk

Risk threshold:

the specific point at which risk becomes unacceptable

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13
Q

What are the inputs to the risk management process?

A
  • Project background information and other organizational process assets
  • Enterprise environmental factors
  • Project charter, network diagram, and other project documents
  • Project management plan (including scope baseline and the knowledge area plans)
  • Time and cost estimates
  • Procurement documents
  • Stakeholder register
  • Risk register
  • Work performance data and reports
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14
Q

What are some examples of sources of risk?

A
  • Technical
  • Project management
  • Schedule
  • Cost
  • Quality
  • Scope
  • Resources
  • Customer satisfaction
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15
Q

What are some examples of risk identification techniques?

A
  • Documentation reviews
  • Information-gathering techniques
  • SWOT analysis (strengths, weaknesses, opportunities, threats)
  • Checklist analysis
  • Assumptions analysis
  • Diagramming techniques
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16
Q

What are risk triggers?

A
  • Early warning signs that a risk event has occurred, or is about to occur
  • They let risk owners know when to take action
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17
Q

What is assumptions analysis?

A

Assessing the assumptions made on the project and determining whether they are valid

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18
Q

When is assumptions analysis done?

A

During Identify Risks

19
Q

What is risk data quality assessment?

A

Determining how accurate, reliable, and well understood the risk information is

20
Q

When is the risk data quality assessment done?

A

During Perform Qualitative Risk Analysis

21
Q

What is a probability and impact matrix?

A

The company’s standard rating system to promote a common understanding of what each risk rating means

22
Q

What is sensitivity analysis?

A

A technique to analyze and compare the potential impacts of identified risks

23
Q

What is the formula for expected monetary value?

A

Probability times impact, or

EMV = P x I

24
Q

What is a decision tree?

A

A model of a decision to be made that includes the probabilities and impacts of future events

25
Q

Who is a risk owner?

A

The person assigned to develop and execute risk responses for a critical risk

26
Q

What are the possible risk response strategies for threats?

A

Avoid:

Eliminate the threat by eliminating the cause

Mitigate:

Reduce the probability or impact of the threat

Transfer:

Make another party responsible for the risk (outsourcing, insurance, warranties, bonds, guarantees)

Accept:

  • Passive acceptance - do nothing; if it happens, it happens
  • Active acceptance - develop contingency plans in advance
27
Q

What are the possible risk response strategies for opportunities?

A

Exploit:

Make sure the opportunity occurs

Enhance:

Increase probability or positive impact of the risk event

Share:

Allocate full or partial ownership of the opportunity to a third party

Accept:

Do nothing; if it happens, it happens

28
Q

What are residual risks?

A

Risks that remain after risk response planning

29
Q

What are secondary risks?

A

New risks created by the implementation of risk response strategies

30
Q

How does buying insurance relate to risk response planning?

A
  • It exchanges an unknown cost impact of a known risk for a known cost impact
  • It is a method to decrease project risk
31
Q

How does a contract relate to risk response planning?

A
  • A contract helps allocate and mitigate risks
  • Risk analysis must be done before a contract is signed
32
Q

What are contingency plans?

A

Planned responses to be implemented when and if a risk event occurs

33
Q

What are fallback plans?

A

Actions that will be taken if the contingency plan is not effective

34
Q

What are reserves?

A

Time or cost added to the project to account for risk

35
Q

What are the two kinds of reserves?

A
  • Management reserve
  • Contingency reserve
36
Q

What is a contingency reserve?

A
  • Time or cost allocated to cover known unknowns
  • It is included in the cost baseline
37
Q

What is a management reserve?

A
  • Time or cost allocated to cover unkown unknowns
  • It is added to the cost baseline to get the cost budget
38
Q

What are workarounds?

A

Unplanned responses developed to deal with the occurrence of unanticipated events or problems on a project (or to deal with risks that had been accepted because of unlikelihood of occurrence and/or minimal impact)

39
Q

What are risk reassessments?

A

Reviews of the risk management plan and risk register

40
Q

When do risk reassessments occur?

A

During Control Risks

41
Q

What is reserve analysis?

A

Managing the reserves and making sure the amount remaining is adequate

42
Q

When is reserve analysis done during the risk management process?

A

During Control Risks

43
Q

What are risk audits?

A

Assessing the effectiveness of the risk management process and specific risk responses that have been implemented

PMP (Rita's Hot Topics) (13 decks)

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