Chapter 11: Project Risk Management Terms Flashcards
A risk response appropriate for both positive and negative risks, but often used for smaller risks within a project.
Acceptance
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.
Ambiguity risks
A risk response to avoid the risk.
Avoidance
The most common approach to risk identification; usually completed by a project team with subject matter experts to identify the risks within the project.
Brainstorming
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.
Business risks
A ranking approach to identify the probability and impact by using a numerical value, from .01 (very low) to 1.0 (certain).
Cardinal scales
A quick and cost-effective risk identification approach.
Checklists
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.
Data precision
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.
Decision tree
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 _____Technique, without fear of backlash or offending other participants in the process. The goal is to gain consensus on project risks within the project.
Delphi Technique
A risk response that attempts to enhance the conditions to ensure that a positive risk event will likely happen.
Enhancing
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.
Escalating
The monetary value of a risk exposure based on the risk’s probability and impact in the risk matrix. This approach is typically used in quantitative risk analysis because it quantifies the risk exposure.
Expected monetary value (EMV)
A risk response that takes advantage of the positive risks within a project.
Exploiting
These risks are outside of the project, but directly affect it—for example, legal issues, labor issues, a shift in project priorities, or weather. “Force majeure” risks call for disaster recovery rather than project management. These are risks caused by earthquakes, tornadoes, floods, civil unrest, and other disasters.
External risks
System or process flowcharts show the relationship between components and how the overall process works. These are useful for identifying risks between system components.
Influence diagrams
These cause-and-effect diagrams are also called fishbone diagrams and are used to find the root cause of factors that are causing risks within the project.
Ishikawa diagrams
Low-priority risks are identified and assigned to a watch list for periodic monitoring.
Low-priority risk watch list
A risk response effort to reduce the probability and/or impact of an identified risk in the project.
Mitigation
A simulation technique that got its name from the casinos of Monte Carlo, Monaco. The simulation is completed using a computer software program that can simulate a project, using values for all possible variables, to predict the most likely model.
Monte Carlo technique