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PMP Exam BL > 11. Risk > Flashcards

11. Risk 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 response
  • Implement risk responses
  • Monitor 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 are the main contents of the Risk management plan?

A
  • Risk strategy
  • Methodology
  • Roles and responsibilities
  • Funding
  • Timing
  • Risk categories
  • Stakeholder risk appetite/thresholds
  • Definitions or probability and impact
  • Reporting
  • Tracking
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4
Q

What are the key outputs of the Identify Risks process?

A
  • Risk register

* Risk report

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5
Q

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

A
  • Risk ranking for the project compared to other projects
  • List of prioritised risks and their probability and impact ratings
  • Results of other risk parameter assessments
  • Risks grouped by categories
  • List of risks for additional analysis and response
  • List of risks requiring additional analysis in the near term
  • Watch list (noncritical risks)
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6
Q

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

A
  • Prioritised list of quantified individual project risks
  • The quantified probability of meeting project objectives
  • Trends in quantitative risk analysis
  • Initial contingency time and cost reserves needed
  • Assessment of overall project risk exposure
  • Possible realistic and achievable completion dates and project costs
  • Recommended risk responses
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7
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 (contingency) for time and cost
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8
Q

What are the key outputs of the Monitor Risks process?

A
  • Work performance information
  • Risk register updates
  • Change requests
  • Project management plan updates
  • OPAs updates
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9
Q

What key outputs of the Monitor 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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10
Q

What are the contents of the risk register?

A
  • List of risks
  • Potential risk owners
  • Potential risk responses (Avoid, Transfer, Mitigate, Accept)
  • Root causes or risks
  • Risk triggers
  • Potential impact of identifies Threats and Opportunities
  • When each risk will occur
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11
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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12
Q

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

A
  • Probability
  • Impact
  • Timing
  • Frequency
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13
Q

Define risk appetite (tolerance) and risk threshold.

A
  • Risk appetite: a general high level description of the acceptable level of risk to an individual or organisation.
  • Risk threshold: the specific point at which risk becomes unacceptable.
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14
Q

What are the inputs of the risk management process?

A
  • Project charter
  • Project management plan
  • Project documents
  • EEFs
  • OPAs
  • Agreements
  • Procurement documentation
  • Work performance data and reports
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15
Q

Name the risk categories.

A
  • External
  • Internal
  • Technical
  • Commercial
  • Unforeseeable
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16
Q

On top of the categories of risk, provide some additional examples or sources of risk.

A
  • Scope
  • Schedule
  • Cost
  • Quality
  • Resources
  • Customer/stakeholder satisfaction
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17
Q

What is a risk breakdown structure?

A

An organisational or hierarchical chart that can help identify and document risk categories.

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18
Q

Name the categories of non-event risks.

A
  • Ambiguity (lack of understanding)

* Variability (inability to predict changes)

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19
Q

What are some examples of risk identification techniques?

A
  • Brainstorming
  • Checklist analysis
  • interviewing
  • Root cause analysis
  • Assumption analysis
  • Constraint analysis
  • SWOT analysis
  • Documentation reviews
  • Prompt lists
  • Facilitation
20
Q

What is assumption analysis?

When is it done?

A

Assessing the assumptions made on the project and determining whether they are valid.
It is done during Identify risks.

21
Q

What is the purpose of a prompt list?

A

A prompt list is a predetermined list of risk categories that might act as a source of individual and overall project risk.
A prompt list can help a project team identify risks to individual elements of the project as well as risks to the overall project.

22
Q

What is the purpose of a risk report?

A

The purpose of a risk report is to keep stakeholders apprised of risk management efforts and outcomes.

23
Q

What is a risk data quality assessment? When is it done?

A

Determining how accurate, reliable, and well understood the risk information is.
It is done during Perform Qualitative risk analysis.

24
Q

What is a data representation technique that can be used during the Perform Qualitative Risk Analysis process?

A

A probability and impact matrix

25
Q

What can a project manager use in order to determine quantitative probability and impact?

A
  • Expert judgment from trained risk specialists and team members.
  • Data-gathering techniques, such as interviewing
  • Data-analysis techniques, such as Monte Carlo analysis.
  • Interpersonal and Team skills
  • Representations of uncertainty
  • Cost and schedule estimating
  • Use of historical records from previous projects
  • Probability and Impact Matrix
26
Q

What is the purpose of Monte Carlo analysis?

A

Monte Carlo analysis is used to simulate the cost or schedule results of the project. Results are in a probability distribution.

27
Q

What is sensitivity analysis?

A

A technique to analyse which individual project risks have the most potential impact on project outcomes. Tornado diagram.

28
Q

What is a decision tree?

A

Selection of the best of several alternative courses of action. Branches are representing different decisions or events.
We see associated costs + probabilities in %
End point of branches = + or - outcomes in $
Presentation of the Expected Monetary Value (EMV) for an event.

29
Q

What is the formula for expected monetary value?

A

Probability times impact or: Expected Monetary Value
EMV = P x I
P: Probability
I: Impact
Performed during Quantitative risk analysis

30
Q

What is the formula for schedule?

A 
Schedule: Expected Value
EV = P x I
P: Probability
I: Impact
Performed during Quantitative risk analysis
31
Q

What are the possible risk response strategies for threats?

A

• Avoid: eliminate the threat by eliminating its cause.
• Mitigate: reduce the probability or impact of the threat
• Transfer: make another party responsible for the risk (outsourcing, insurance, warranties, bonds, guaranties)
• Escalate: move the threat to the program or portfolio level
• Accept:
Passive acceptance - do nothing; if it happens, it happens
Active acceptance - develop contingency plans in advance.

32
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
  • Escalate: move the opportunity to the program or portfolio level
  • Accept: do nothing, if it happens, it happens
33
Q

What are residual risks?

A

Risks that remain after risk response planning.

34
Q

What are secondary risks?

A

New risks created by the implementation of risk response strategies.

35
Q

What are contingency plans?

A

Plans describing the specific actions that will be taken if the opportunity or threat occurs.

36
Q

What are fallback plans?

A

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

37
Q

Who is a risk owner?

A

Each risk must be assigned to someone who will help lead the development of the risk response and who will be assigned to carry out the risk response or “own” the risk.

38
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.

39
Q

What are reserves?

What are the two kinds of reserves?

A

Time or cost added to the project to account for risk.
• Management reserve
• Contingency reserve

40
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 the unlikelihood of occurrence and /or minimal impact).

41
Q

What is reserve analysis?

When is it done during the risk management process?

A

Reserve analysis is checking to see how much reserve remains and how much might be needed.
It is done during the Monitor Risks process.

42
Q

What is a risk review?

How often do they take place?

A

A discussion of the effectiveness of planned risk responses that have been implemented on the project; it may result in the identification of new risks, secondary risks created by risk response plans, and risks that are no longer applicable; risk reviews may also result in risk reassessments, identifying new risks and/or closing risks.
A risk review is held regularly.

43
Q

What are risk audits?

A

Assessments or the overall process of risk management on the project.

44
Q

What are some common risk management mistakes?

A
  • Risk identification is completed without knowing enough about the project
  • Overall project risk is evaluated using tools that do not identify specific individual project risks
  • Risk identification ends too soon
  • Padding is used
  • Some things considered risks are facts, and are therefore not risks
  • The identified risks are general rather than specific
  • Whole categories of risks are missed
45
Q

What are the risk parameters?

A
  • Urgency
  • Dormancy
  • Proximity
  • Manageability
  • Controllability
  • Detectability
  • Connectivity
  • Strategic Impact
  • Propinquity
46
Q

What is the difference between risk and issue?

A 
Risk
• Focused on the future
• Can be positive opportunity or negative
• Is documented in the risk register
• Response is called a "risk response"
Issue
• Focused on the present
• Can be positive or negative
• Is documented in the issue log
• Response is called a "workaround"
47
Q

What is the difference between risk response and contingency plan?

A
  • Risk response: actions taken before the risk event occurs

* Contingency plan: action that will be taken if and when the risk event occurs.

PMP Exam BL (13 decks)

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