Chapter 11 - Project Risk Management 8%

Question 1

Includes the processes of conducting risk management planning, identification, analysis, response planning, response implementation, and monitoring risk on a project.

Answer 1

Project Risk Management

Question 2

The process of defining how to conduct risk management activities for a project.

Answer 2

Plan Risk Management

Question 3

The process of identifying individual project risks as well as sources of overall project risk, and documenting their characteristics.

Answer 3

Identify Risks

Question 4

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

Answer 4

Perform Qualitative Risk Analysis

Question 5

The process of developing options, selecting strategies, and agreeing on actions to address overall project risk exposure, as well as to treat individual project risks.

Answer 5

Plan Risk Responses

Question 6

The process of implementing agreed-upon risk response plans.

Answer 6

Implement Risk Responses

Question 7

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

Answer 7

Monitor Risks

Question 8

An uncertain event or condition that, if it occurs, has a positive effect (opportunities) or negative effect (threat) on one or more project objectives.

Answer 8

Individual Project Risk

Question 9

The effect of uncertainty on the project as a whole, arising from all sources of uncertainty including individual risks, representing the exposure of stakeholders to the implications of variations in project outcome, both positive and negative.

Answer 9

Overall Project Risk

Question 10

Type of non-event risk. Uncertainty about some key characteristics of a planned event, activity, or decision.

Can be addressed using Monte Carlo analysis, with the difference reflected in probability distributions, followed by actions to reduce the spread of possible outcomes.

Answer 10

Variability Risk

Question 11

Type of non-event risk. Uncertainty about what might happen in the future.

Managed by defining the areas where there is a deficit of knowledge or understanding, then filling the gaps by obtaining expert external input or benchmarking against best practices. Also addressed through incremental development, prototyping, or simulation.

Answer 11

Ambiguity Risk

Question 12

A component of the project management plan that describes how risk management activities will be structured and performed.

Answer 12

Risk Management Plan

Question 13

Risk Management Plan element: Describes the general approach to managing risks on this project.

Answer 13

Risk Strategy

Question 14

Risk Management Plan element: Defines the specific approaches, tools, and data sources that will be used to perform risk management on the project.

Answer 14

Methodology

Question 15

Risk Management Plan element: Defines the lead, support, and risk management team members for each type of activity described in the risk management plan, and clarifies their responsibilities.

Answer 15

Roles and Responsibilities

Question 16

Risk Management Plan element: Identifies the funds needed to perform activities related to Project Risk Management. Establishes protocols for the application of contingency and management reserves.

Answer 16

Funding

Question 17

Risk Management Plan element: Defines when and how often the Project Risk Management processes will be performed throughout the project life cycle, and establishes risk management activities for inclusion into the project schedule.

Answer 17

Timing

Question 18

Risk Management Plan element: Provides a means for grouping individual project risks.

Answer 18

Risk Categories

Question 19

A common way to structure risk categories, which is a hierarchal representation of potential sources of risk.

Answer 19

Risk Breakdown Structure (RBS)

Question 20

A way to structure risk categories, which is less structured than RBS. May take the form of a simple list of categories or a structure based on project objectives.

Answer 20

Custom Risk Categorization Framework

Question 21

The degree of uncertainty an organization or individual is willing to accept in anticipation of a reward.

Answer 21

Risk Appetite

Question 22

Provided by key stakeholders and expressed as measureable risk thresholds around each project objective that determine the acceptable level of overall project risk exposure.

Answer 22

Stakeholder risk appetite

Question 23

Specific to the project context and reflect the risk appetite and thresholds of the organization and key stakeholders. The project may generate specific ______ or it may start with something general provided by the organization

Answer 23

Definitions of Risk Probability and Impacts

Question 24

A grid for mapping the probability of each risk occurrence and its impact on project objectives if that risk occurs.

Answer 24

Probability and Impact Matrix

Question 25

This analysis explores the validity of assumptions and constraints to determine which pose a risk to the project.

Answer 25

Assumption and Constraint Analysis

Question 26

This technique examines the project from each of the strengths, weaknesses, opportunities, and threats perspectives.

Answer 26

SWOT Analysis

Question 27

A predetermined list of risk categories that might give rise to individual project risks and that could also act as sources of overall project risk.

Answer 27

Prompt List

Question 28

Contains details of individual project risks that have been identified and prioritized, and for which risk responses are required. Also, IDs the nominated risk owner for each risk.

Answer 28

Risk Register

Question 29

Describes sources of overall project risk and the current overall project risk status.

Updated to reflect the most important individual project risks (usually those with the highest probability and impact), as well as a prioritized list of all identified risks on the project and a summary conclusion.

Answer 29

Risk Report

Question 30

Technique to evaluate the degree to which the data about risks is useful for risk management.

Answer 30

Risk Data Quality Assessment

Question 31

Considers the likelihood that a specific risk will occur and the potential effect on one or more project objectives such as schedule, cost, quality, or performance. Risks can be assessed in interviews or meetings with participants selected for their familiarity with the types of risks recorded in the risk register.

Other characteristics of risk may be assessed for a more robust prioritization of risks:

• Urgency (time to implement an effective response)
• Promixity (time before impacts project objectives)
• Dormancy (time elapsed before impact is discovered)
• Manageability (ease of being managed)
• Controllability (ease of being controlled)
• Detectability (ease of being found)
• Connectivity (related to other risks)
• Strategic Impact (major effect on org’s strategic goal)
• Propinquity (degree perceived to matter by a stakeholder)

Answer 31

Risk Probability and Impact Assessment

Question 32

An analysis technique to determine which individual project risks or other sources of uncertainty have the most potential impact on project outcomes, by correlating variations in project outcomes with variations in elements of the quantitative risk analysis model.

Answer 32

Sensitivity Analysis

Question 33

An analysis technique to determine the best of several alternative courses of action.

Answer 33

Decision Tree Analysis

Question 34

A graphical representation of situations showing causal influences, time ordering of events, and other relationships among variables and outcomes.

Answer 34

Influence Diagram

Question 35

Appropriate when the project team or the project sponsor agrees that a threat is outside the scope of the project or that the proposed response would exceed the project manager’s authority. These are not monitored further by the project team, although they may be recorded in the risk register for information.

(Used for both threats and opportunities)

Answer 35

Escalation

Question 36

When the project team acts to eliminate the threat or protect the project from its impact.

(Used for threats only)

Answer 36

Avoidance

Question 37

Shifting ownership of a threat to a third party to manage the risk and to bear the impact if the threat occurs. Often involves payment of a risk premium.

(Used for threats only)

Answer 37

Transfer

Question 38

Action is taken to reduce the probability of occurrence and/or impact of threat. Done early, is often more effective than trying to repair damage after a threat has occurred.

(Used for threats only)

Answer 38

Mitigate

Question 39

Acknowledge the existence of a threat/opportunity, but no proactive action is taken.

(Used for both threats and opportunities)

Appropriate for low-priority threats/opportunities or when it’s not possible or cost-effective to address in any other way. May be active or passive.

Most common active ______ strategy is to establish a contingency reserve, including amounts of time, money, or resources to handle the threat if it occurs.

To passively ______ involves no proactive action apart from periodic review to ensure it does not change significantly.

Answer 39

Accept

Question 40

Strategy for high-priority opportunities where the org wants to ensure that the opportunity is realized. Tries to ensure it definitely happens by increasing the probability of occurrence to 100%.

(Used for opportunities only)

Answer 40

Exploit

Question 41

Transferring ownership to a third party so it shares some of the benefit if the opportunity occurs. Often involves payment of a risk premium for taking part.

(Used for opportunities only)

Answer 41

Share

Question 42

Strategy used to increase the probability and/or impact of an opportunity. More effective to do so early than after opportunity has occurred. Focus attention on the causes of the opportunity to increase probability. or target factors that drive the size of the potential benefit.

Answer 42

Enhance

Question 43

Responses provided which may be used in the event that a specific trigger occurs.

Answer 43

Contingent Response Strategies

Question 44

Compares technical accomplishments during project execution to the schedule of technical achievement. Deviation can indicate the potential impact of threats or opportunities

Answer 44

Technical Performance Analysis

Question 45

Type of audit used to consider the effectiveness of the risk management process.

Answer 45

Risk Audits