17. Risk Management (Knowledge Area 8)

Question 1

risk breakdown structure

Question 2

ambiguity risks

Answer 2

= the uncertainty that exists about what might happen in the future and are very difficult to predict

Ex: future regulations or changes in technology

Question 3

positive risks

Answer 3

(aka opportunities) will impact the project positively

Ex: shortening the schedule budget and increasing customer satisfaction

Question 4

Risk identification is done ____.

Answer 4

throughout the project

Question 5

A project manager has just started the risk management process on a project.

What are the objectives of risk management on a project?

Answer 5

increasing the probability/impact of positive risks and decreasing the probability/impact of negative risks

Question 6

While discussing risk management with a team member, what should the project manager say about the different risk levels?

Answer 6

There are two levels of project risks: individual and overall project risks in the PMBOK)

Question 7

What kind of risk is about uncertainties that exist regarding what might happen in the future and cannot be predicted currently, such as regulatory frameworks or the future development of technology?

Answer 7

ambiguity risks

Question 8

The project manager knows that managing risks is an important part of a project. One of the most important aspects is documenting the stakeholders’ risk appetite.

Where would the project manager document the stakeholders’ risk appetite?

Answer 8

risk management plan

The stakeholders’ risk appetite is an important component of the plan, since it will help determine what risks will be acceptable.

Question 9

Senior management within the organization has requested a brief overview of how the project conducts risk management. They would like to see the different categories of risk that can affect the project.

What should the project manager show them?

Answer 9

risk breakdown structure

part of the risk management plan, and it shows the different categories of risk on a project

Question 10

Process: Identify Risks

Answer 10

Process Group: Planning
Outputs: Risk Management Plan

All project stakeholders should be encouraged to help identify individual project risks.

Question 11

The project team is currently doing data analysis to help identify which risks can affect the project.

What data analysis technique can they use to help determine if there are certain risks in the procurement agreement that can affect the project?

Answer 11

document analysis = a structured review of the different project documents that could include contracts, agreements, and different parts of the project plan

Question 12

The project team has started to identify risks on the project.

What method can they best use to identify both positive and negative risks while analyzing how the strength may offset threats and vice versa?

Answer 12

SWOT analysis

= done to identify the strengths, weaknesses, opportunities, and threats of a project

Question 13

The project team members have finished identifying risks up to this point in the project. They have created the risk register, which lists all of the individual project risks.

What should the team create next?

Answer 13

risk report

generally created with the risk register or after the risk register. It includes information on the sources of overall project risks and a summary of information on the identified individual project risks.

Question 14

risk report

Answer 14

= includes information on the sources of overall project risks and a summary of information on the identified individual project risks

generally created with the risk register or after the risk register

Question 15

The project manager has met with the legal department within the organization to be informed of a new regulation that was recently passed that may impact the project. The project manager has added this risk to the risk register.

What process should the project manager do next?

Answer 15

Process: Perform Qualitative/Quantitative Risk Analysis

Once a risk has been identified, the next step is to determine how the risks will impact the project. This can be done by either doing a qualitative and/or a quantitative analysis. Sometimes, these two analyses are done sequentially, in which case a qualitative analysis is done followed by a quantitative analysis, or they can be done in parallel. Do not respond to a risk if you do not understand how the risk will impact the project.

Question 16

The project team members are reviewing the risk in the risk register to determine which risks will have the greatest impact on a project. One risk in particular has a very high impact but the team has determined that this risk should be ranked very low on the project.

Why this risk is ranked so low?

Answer 16

The probability of the risk occuring is low.

Ex: an earthquake in New York City; The impact may be high, but the probability of it occurring may be very low, which leads to the risk being ranked lower.

Question 17

The project team members are currently doing the process of perform qualitative risk analysis. They would like to use a tool that could not only display the probability of the risks or impact but the overall likelihood of the risks.

What tool can be used to display the three parameters?

Answer 17

bubble chart

A bubble chart is part of the tool data representation. It is used to display three dimensions of data.

Question 18

While conducting a brainstorming session with the team in order to rank the risks, the project manager is worried about the data the team is using to rank the risks. The project manager feels that some team members may only be speculating about what the probability of a risks would be.

What tool can best help the project manager in this scenario?

Answer 18

Risk Data Quality Assessment

= evaluates the degree to which the data about the individual risks are accurate and reliable

Question 19

The project manager and team has determined that if a flood were to take place during the building renovation project, it would delay the project by 2 weeks and cost approximately $50,000 in damages.

What process did the project manager and team complete to collect these data?

Answer 19

Perform Quantitative Risk Analysis

Question 20

The project team has identified, ranked, and determined how the risks will impact the project. One risk in particular is a new regulation that may pass and can have a severe effect on the project and on the entire organization.

What risk response strategy would be best for the team to take?

Answer 20

Escalate

Since this is a risk that will not just affect the project but the entire organization, the project team should escalate the risk toward a portfolio or the organization level. Let the organization’s legal department communicate with the project manager and determine how to respond.

Question 21

The project team members are coming up with ways to respond to an opportunity that they feel will not likely happen. The opportunity is that the permit for the building renovation project comes earlier than its supposed six-week wait. Since the permit office is so backed up, the project team members have decided that if the permit does come earlier than 6 weeks, they will still start the work in 6 weeks.

What risk response strategy does this illustrate?

Answer 21

Acceptance of an opportunity

Question 22

While working on a 60-story skyscraper project, one supplier has informed the project manager that due to dangerous weather at the warehouse, the materials will be anywhere 1 to 2 months late. The project manager has already accounted for this risk and has decided to go with another supplier to get the materials.

What process best illustrates this scenario?

Answer 22

Implement Risk Response

Question 23

During the process of Monitor Risks, the project manager works with the organization to determine the effectiveness of the risk management processes. They have determined that the risk processes for the project are adequate and that no changes should be made.

What tool best describes this?

Answer 23

Tool: Audits