Chapter 11 - Project Risk Management Terms

Question 1

Acceptance

Answer 1

A risk response appropriate for both positive and negative risks, but often used for smaller risks within a project.

Question 2

Ambiguity risks

Answer 2

Risks that have an uncertain, unclear nature, such as new laws or regulations, the marketplace conditions, and other risks that are nearly impossible to predict.

Question 3

Avoidance

Answer 3

A risk response to avoid the risk.

Question 4

Branstorming

Answer 4

The most common approach to risk identification, usually completed by a project team with subject matter experts to identify the risks within the project.

Question 5

Business risks

Answer 5

These risks may have negative or positive outcomes. Examples include using a less experienced worker to complete a task, allowing phases or activities to overlap, or forgoing the expense of formal training for on-the-job education.

Question 6

Cardinal scales

Answer 6

A ranking approach to identify the probability and impact by using a numerical value, from .01 (very low) to 1.0 (certain).

Question 7

Checklists

Answer 7

A quick and cost-effective risk identification approach.

Question 8

Data precision

Answer 8

The consideration of the risk ranking scores that takes into account any bias, the accuracy of the data submitted, and the reliability of the nature of the data submitted.

Question 9

Decision tree

Answer 9

A method to determine which of two or more decisions is the best one. The model examines the costs and benefits of each decision’s outcome and weighs the probability of success for each of the decisions.

Question 10

Delphi Technique

Answer 10

An anonymous method of querying experts about foreseeable risks within a project, phase, or component of a project. The results of the survey are analyzed by a third party, organized, and then circulated to the experts. There can be several rounds of anonymous discussion with the Delphi Technique, without fear of backlash or offending other participants in the process. The goal is to gain consensus on project risks within the project.

Question 11

Enhancing

Answer 11

A risk response that attempts to enhance the conditions to ensure that a positive risk event will likely happen.

Question 12

Escalating

Answer 12

A risk response that is appropriate for both positive and negative risk events that may outside of the project manager’s authority to act upon.

Question 13

Expected monetary value (EMV)

Answer 13

The monetary value of a risk exposure based on the risk’s probability and impact in the risk matrix. This