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PMP Exam Prep > Ch 11 Project Risk Management > Flashcards

Ch 11 Project Risk Management Flashcards

1
Q

Escalate (Threat & Opportunity Strategy)

A

A threat & opportunity strategy that involves giving the responsibility of monitoring and controlling a risk (that is outside the scope of the project and may be affecting multiple projects) to the program or portfolio level of the organization

An important concept for the Strategies for Threats and Strategies for Opportunities tools that helps execute the Plan Risk Responses process (Risk/Planning)

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2
Q

Accept (Threat & Opportunity Strategy)

A

A threat & opportunity strategy that can be either active or passive

  • Active acceptance is where a contingency is set up for time and money
  • Passive acceptance is when there is no proactive plan to respond to the risk, only to monitor it

An important concept for the Strategies for Threats tool that helps execute the Plan Risk Responses process (Risk/Planning)

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3
Q

Risk Categorization

A

A technique used to help rank risks more easily

The Risk Breakdown Structure can help to categorize project risks, or they could be categorized by root cause

A tool used to help execute the Perform Qualitative Risk Analysis process (Risk/Planning)

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4
Q

Plan Risk Responses

A

The process of planning risk responses

Knowledge Area: Risk

Process Group: Planning

Inputs:

  • Risk Register

Tools:

  • Strategies for Threats
  • Strategies for Opportunities
  • Contingent Response Strategies

Outputs:

  • Risk Register Updates
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5
Q

Workaround

A

A response to an unanticipated negative risk event that has occurred and was not planned in advance (e.g., patch, quick fix)

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6
Q

Residual Risk

A

A small amount of risk (threats) remaining after:

  • Mitigation
  • Acceptance
  • Implementation of planned responses

Contingency and fallback plans can be created for residual risk

An important concept for the Strategies for Threats tool that helps execute the Plan Risk Responses process (Risk/Planning)

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7
Q

Risk Breakdown Structure

A

A hierarchical breakdown of risks that is used to categorize them

A component of the Risk Management Plan, created during the Plan Risk Management process (Risk/Planning)

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8
Q

Risk Probability and Impact Assessment

A

Assessment of the probabiity and impact of all the project risks by interviewing or meeting with the project team

Values of high, medium, or low can be used to rank the risk.

A tool used to help execute the Perform Qualitative Risk Analysis process (Risk/Planning)

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9
Q

Exploit (Opportunity Strategy)

A

An opportunities strategy used when the organization wants to ensure that an opportunity is realized, such as completing a project on time

Taking advantage of or capitalizing on a positive risk’s occurence; the opposite of avoidance

Example: using the very best staff available to complete a project on time

An important concept for the Strategies for Opportunities tool that helps execute the Plan Risk Responses process (Risk/Planning)

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10
Q

Expected Monetary Value Analysis (EMV)

A

A data analysis technique in which a certain dollar amount is assigned to each risk using decision tree analysis (aka make-or-buy analysis)

To calculate the EMV, multiply the probability by the risk costs; to get the total, add the EMV to the initial cost

A tool used to help execute the Perform Quantitative Data Analysis process (Risk/Planning)

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11
Q

Transfer (Threat Strategy)

A

A threat strategy in which risk is given to another company; ownership of the response is shifted to a third party (e.g., outsourcing, purchasing insurance, using a warranty)

An important concept for the Strategies for Threats tool that helps execute the Plan Risk Responses process (Risk/Planning)

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12
Q

Risk Trigger

A

Symptoms or warning signs that a potential risk is about to occur on a project

An important concept for the Monitor Risks process (Risk/M&C)

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13
Q

Perform Qualitative Risk Analysis

A

The process of prioritizing individual project risks for further analysis or action by assessing their probability of occurrence and impact as well as other characteristics

Knowledge Area: Risk

Process Group: Planning

Inputs:

  • Risk Register

Tools:

  • Data Analysis
    • Risk Probability and Impact Assessment
  • Data Representation
    • Probability and Impact Matrix
  • Risk Categorization

Outputs:

  • Risk Register Updates
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14
Q

Risk

A

An uncertain event that can affect one or more project objectives

Can be positive or negative:

  • Positive risks are known as opportnities
  • Negative risks are known as threats
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15
Q

Implement Risk Responses

A

The process of implementing the planned risk responses if any of the risks materialize

Knowledge Area: Risk

Process Group: Executing

Inputs:

  • Risk Register

Tools:

  • None

Outputs:

  • Risk Register Updates
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16
Q

Risk Management Plan

A

The management plan that defines the risk management methodology and states how to execute the risk management process

It does not list any risks

It does includes the following:

  • How to identify risk?
  • How will you do qualitative risk assessment?
  • How will you do quantitative risk assessment?
  • How will you respond to risk?
  • How will implement the risk responses?
  • How will you monitor and control the risks once the project is executed?
  • Risk breakdown structure, which is used to categorize risks.

An output of the Plan Risk Management process (Risk/Planning)

An input to the:

  • Develop Project Management Plan process (Integration/Planning)
  • Manage Stakeholder Engagement process (Stakeholder/Executing)
17
Q

Sensitivity Analysis

A

A type of data analysis technique that looks at the risks that have the most impact on a project and/or how one risk affects multiple parts of the project

The tornado diagram is one way of displaying such information

A tool used to help execute the Perform Quantitative Data Analysis process (Risk/Planning)

18
Q

Mitigate (Threat Strategy)

A

A threat strategy in which risk probability and/or impact is reduced (e.g., prototype, additional testing)

An important concept for the Strategies for Threats tool that helps execute the Plan Risk Responses process (Risk/Planning)

19
Q

Enhance (Opportunities Strategy)

A

An opportunities strategy that is the opposite of mitigate; instead of reducing risk, its probability or impact on the project is increased (e.g., getting a lower price on supplies)

An important concept for the Strategies for Opportunities tool that helps execute the Plan Risk Responses process (Risk/Planning)

20
Q

Secondary Risk

A

A new risk that emerged as a result of implementing a risk response

21
Q

Fallback Plan

A

A contingent response strategy that is known in advance

22
Q

Perform Quantitative Risk Analysis

A

The process of numerically analyzing the risk on a project

Only done for HIGH or MAJOR risks–those relating to availability of time, budget, project requirements etc.

Knowledge Area: Risk

Process Group: Planning

Inputs:

  • Risk Register

Tools:

  • Data Analysis
    • Simulation
    • Sensitivity Analysis
    • Expected Monetary Value Analysis (EMV)

Outputs:

  • Risk Register Updates
23
Q

SWOT Analysis

A

A data analysis technique that identifies positive and negative risks

  • Strengths and opportunities will identify the positive risks
  • Weaknesses and threats will identify the negative risks

A tool used to help execute the Identify Risks process (Risk/Planning)

24
Q

Tornado Diagram

A

A method of displaying the results of a sensitivity analysis

The negative risks are on the left side, the positive risks are on the right side, and the risks with the largest range are at the top, which forms a tornado funnel shape

A tool used to help execute the Perform Quantitative Data Analysis process (Risk/Planning)

25
Q

Contingent Response Strategies

A

Response strategies that are only implemented if a trigger or predefined event occurs

A tool that helps execute the Plan Risk Responses process (Risk/Planning)

26
Q

Primary Risks

A

Generally the most obvious risks included in the initial risk identification process

27
Q

Risk Register

A

A list of all the identified individual project risks that will be updated during the next risk processes

It could be a spreadsheet listing possible positive and negative risks; they will remain possibilities until the Plan Risk Response process is completed

An output of the Identify Risks process (Risk/Planning)

An input to the:

  • Estimate Activity Durations process (Schedule/Planning)
  • Estimate Costs process (Cost/Planning)
  • Determine Budget process (Cost/Planning)
  • Plan Quality Management process (Quality/Planning)
  • Plan Resource Management process (Resource/Planning)
  • Estimate Activity Resoures process (Resource/Planning)
  • Perform Qualitative Risk Analysis process (Risk/Planning)
  • Perform Quantitative Risk Analysis process (Risk/Planning)
  • Plan Risk Responses process (Risk/Planning)
  • Implement Risk Responses process (Risk/Executing)
  • Monitor Risks process (Risk/M&C)
  • Plan Procurement Management process (Procurement/Planning)
28
Q

Identify Risks

A

The process of identifying the risks that could affect the project and creating the risk register, which becomes the input to all the other risk processes going forward

Knowledge Area: Risk

Process Group: Planning

Inputs:

  • Scope Baseline

Tools:

  • Data Gathering
    • Brainstorming
    • Interviewing
    • Checklists
    • Delphi Technique
  • Data Analysis
    • SWOT Analysis

Outputs:

  • Risk Register
  • Risk Report
29
Q

Plan Risk Management

A

The process of creating the risk management plan

Knowledge Area: Risk

Process Group: Planning

Inputs:

  • Project Charter
  • Stakeholder Register

Tools:

  • None

Outputs:

  • Risk Management Plan
30
Q

Risk Report

A

A written report that describes the overall project risks

Includes the source of the overall project risks, categories, and identified threats and opportunities.

An output of the Identify Risks process (Risk/Planning)

31
Q

Avoid (Threat Strategy)

A

A threat strategy that is used to eliminate a risk entirely, but can remove parts of the scope or change the cost and schedule

An important concept for the Strategies for Threats tool that helps execute the Plan Risk Responses process (Risk/Planning)

32
Q

Monitor Risks

A

The process of monitoring the implementation of risk response plans, tracking identified risks, identifying and analyzing new risks, and evaluating risk process effectiveness throughout the project

Knowledge Area: Risk

Process Group: Monitoring and Controlling

Inputs:

  • Risk Register

Tools:

  • Audits

Outputs:

  • Risk Register Updates
33
Q

Share (Opportunities Strategy)

A

An opportunities strategy that is the opposite of transfer; instead of giving away risks, they are shared with other projects or parts of a project (e.g., a joint venture)

Allocating ownership to share the benefits

An important concept for the Strategies for Opportunities tool that helps execute the Plan Risk Responses process (Risk/Planning)

34
Q

Project Risk Management

A

Knowledge area regarding the processes associated with documenting and ranking risk, planning responses, and monitoring risk

35
Q

Probability and Impact Matrix

A

A matrix that provides a visual representation of specific combinations of probabilities and impacts that lead to a risk being rated as “high,” “medium” or “low”

A tool used to help execute the Perform Qualitative Risk Analysis process (Risk/Planning)

36
Q

Decision Tree Analysis

(Make-or-Buy Analysis)

A

A data analysis technique that uses cost and probability to determine the overall impact of a risk on a project

There will only be two choices for each decision

A tool used to help execute the Perform Quantitative Data Analysis process (Risk/Planning)

37
Q

Bubble Chart

A

A hierarchical chart for risk that uses three different parameters instead of the usual two (probability and impact)

The third parameter is urgency–the bigger the bubble, the greater the urgency

This is usually used in place of a scatter diagram

A tool used to help execute the Perform Qualitative Risk Analysis process (Risk/Planning)

38
Q

Basis of Estimates

A

A document that describes how the estimates were developed and their ranges. It can also include all assumptions and the constraints made to create the estimate

An input to the Perform Quantitative Risk Analysis process (Risk/Planning)

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