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PMP With PMI > Chapter Eleven | Risk Management > Flashcards

Chapter Eleven | Risk Management Flashcards

1
Q

Note.

Risk is an uncertain event that could happen

constraints are real. We need to plan around them.

A

.

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2
Q

What does EMV stand for

A

Expected monetary value

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3
Q

What does PESTLE stand for

A 
Political
Economic
Social
technological
Legal
Environmental
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4
Q

What does RBS stand for in risk?

A

Risk breakdown structure

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5
Q

What does TECOP stand for

A 
Technical
Environmental
Commercial
Operational 
political
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6
Q

What does VUCA stand for

A

Volaltility
Uncertainty
Complexity
Ambiguity

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7
Q

Uncertainty spectrum

No info Is known as what

Partial information is called what

Full information is known as what

A

No information-unknown unknowns
Partial information – known unknowns
Full information – known knowns

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8
Q

Uncertainty spectrum

What are the components of the realm of project management in managing risk?

A

Complete uncertainty…….general or specific uncertainty…….no uncertainty

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9
Q

Uncertainty spectrum

Known known’s are built into what

A

Project management plan

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10
Q

Uncertainty spectrum

Known unknowns are built into what

A

Risk/response plans

Contingency reserve

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11
Q

Uncertainty spectrum

Unknown unknowns I built into what?

A

Management reserve

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12
Q

What is project risk management?

A

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

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13
Q

What are the two levels of risk in every project and their definition

A

Individual project risk
Event or condition that if it occurs as a positive or negative affect on one or more project objectives
Ex A piece of material

Overall project risk
The effect of uncertainty on a project as a whole arising from all sources of uncertainty, including individual risk, representing the exposure of stakeholders to the implications of variations in project outcome, both positive and negative
Ex These are outside of your control. 40% chance funding won’t come through.

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14
Q

Negative risks are called what

A

Threats

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15
Q

Positive risks are called what

A

Opportunities

More customers than expected

training may be expensive but the vendor will be able to provide it for free because you’re purchasing their project

They add value

make you more competitive

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16
Q

What are the three levels of risk the PM needs to be aware of?

A

Risk exposure
Risk appetite
Risk threshold

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17
Q

Risk Level | What is risk exposure

A

An aggregate measure of the potential impact of any risk in any given point in time in the project program or portfolio

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18
Q

Risk Level | What is risk appetite?

A

The general degree of uncertainty that an entity is willing to take on in anticipation of reward

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19
Q

Risk Level | What is risk threshold

A

Level of risk exposure above which risk are addressed and below which risks may be excepted. Explicitly stated specific degree of acceptable variation around the objective

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20
Q

Businesses fall into one of three risk categories. What are the categories?

A

Risk averse
Risk Seeker
Risk neutral

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21
Q

Risk types | what is risk averse

A

Minimal risk. Try to avoid it

Attitude of risk avoidance.

Typically selects the lowest risk item or the sure thing

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22
Q

Risk types | what is risk seekers

A

Not afraid of risk, looking for a risk.
love the risk
Risk is high and rewards are high
Grabs onto new ideas and runs with them

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23
Q

Risk types | what is risk neutral?

A

Middle ground attitude towards rescue next line most companies are in the middle

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24
Q

What are the four risk types?

A

Pure or insurable risk
Business or inherent risk
External risk
Internal risk

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25
Q

Risk type | What is pure or insurable risk

A

Only involves chance for loss

Risks that you identified that will have a negative impact

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26
Q

Risk type | What is business or inherent risk?

A

Inherent chance for either profit or loss, which is associated with the business value

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27
Q

Risk type | What is external risk?

A

Outside the control of the project manager.

Examples of regulatory or government

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28
Q

Risk type | What is internal risk?

A

Within the control of the project manager

Example of cost estimate

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29
Q

What are two types of non-event risks

A

Variability risk

Ambiguity risk

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30
Q

Nonevent risk | What is variability risk?

A

Uncertainty about

KEY CHARACTERISTICS

of a planned event, activity, or decision. Addressed using Monte Carlo analysis

Note - Could occur impact unknown

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31
Q

Nonevent risk | What does ambiguity risk mean

A

Uncertainty about the

PROJECT FUTURE

where limited knowledge may affect the projects ability to achieve objectives

addressed by finding knowledge deficiencies and filling the gap

Note - what would the risk mean to the overall project success

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32
Q

What is emergent risk? (Project resilience)

A

Emergent risk becomes clear when you become aware of unknowable unknowns after the risk occurred

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33
Q

Who will deal with integrated risk management

A

The team will deal with it.

Risk at each level of the organization, project, program, or portfolio, should be owned and managed at the appropriate level

34
Q

Who will deal with enterprise wide risk management

A

Company will be bought out, government funding got messed up. Next line ensures alignment and coherence In risk management across all levels and provide the greatest overall value for the risk exposure

35
Q

11.1 Plan risk management

What is planned risk management

A

The process of defining how to conduct risk management activities for projects

36
Q

Note

11.1 Plan risk management: input
OPA - Risk categories. PMO looks at previous risks and if there are trends, they may make a category. They are also recurring risks that become a category

A

.

37
Q

11.1 Plan risk management: output

Why is the risk probability and impacts important?

A

So everyone is speaking the same language

38
Q

11.1 Plan risk management | output

What is the probability an impact matrix

A

Grid for mapping probability and impact of a risk on project objectives.
Risks are prioritize according to the potential implications for project objectives

39
Q

Note.. Probability percentages is subjective. It is based on the experts best guess

A

.

40
Q

11.2 Identify risks

What is identifying risks?

A

The process of identifying individual project risk and sources of overall project risk, and then documenting their characteristics

41
Q

Note. Identifying risks is an iterative process. It begins with the charter and continues until close.

A

.

42
Q

11.2 Identify risks

Most identification is done during the planning phase using what three critical components?

A

WBS
Cost estimates
Time estimates

43
Q

11.2 Identify risks | T & T

What is a risk checklist

A

Using historical information from previous similar projects.

Helps identify specific risks within each risk category. Updated regularly.

44
Q

11.2 Identify risks | T & T

Data gathering | what is Delphi technique used for?

A

Technique which uses a questionnaire to solicit experts anonymously, data is summarize, recirculating, until consensus is reached.

It reduces bias of data and keeps a one person from having too much influence

45
Q

11.2 Identify risks | T & T

What are the three common frameworks to generate/focus risks from?

A

PESTLE
TECOP
VUCA

46
Q

11.2 Identify risks | Output

What is the output?

A

Risk register. Overall document about risks, general status type of report.

Note details are progressively elaborated

47
Q

Qualitative versus quantitative

What is qualitative risk analysis?

A

Subjective comparison of risk to us it priority.

The team does qualitative analysis to rank or prioritize risk

Based on opinion

48
Q

Qualitative versus quantitative

What is quantitative risk analysis

A

Numerical analysis done in order to calculate a rating of critical risks in currency

49
Q

11.3 Qualitative risk analysis

what are you doing when you perform a qualitative risk analysis?

A

The process of prioritizing individual project risks for further analysis or action by assessing the probability of occurrence and impact

50
Q

11.3 Qualitative risk analysis | T&T

Data Analysis - What is a risk data quality assessment?

A

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

Do you trust the data?

51
Q

11.3 Qualitative risk analysis | T&T

What is risk probability and impact assessment

A

The probability and impact of each risk is evaluated and rated on a standard scale. Typically done in interviews and meetings using definition tables.

Examples-
What is the risk probability end how likely it is to happen, percentage

What is the risk in that end in fact, either positive or negative

Investigates the effects on objectives such a schedule, cost quality

52
Q

11.3 Qualitative risk analysis | T & T

Data representation – what is probability and impact matrix?

A

A grid of mapping the probability of each risk and it’s impact on project objectives if that risk of cars.

used to score risks and sort by priority groups

Uses the estimated probability an empath based on subjective evaluation

Note. which ones are critical
Which one should be put on the watchlist

53
Q

11.3 Qualitative risk analysis

Note - Impact equals pain scale

A

.

54
Q

Assessment of other risk parameters

What is proximity

A

Period of time before a risk impacts one or more objectives

55
Q

Assessment of other risk parameters

What is dormancy

A

Period of time after a risk occurs before it’s discovered

56
Q

Assessment of other risk parameters

What is Connectivity

A

The extent a risk is related to the other individual risk

57
Q

Assessment of other risk parameters

What is propinquiry?

A

The degree to which a risk is perceived to matter by one or more stakeholders

58
Q

11.3 Qualitative risk

Note. Watchlist is only an output qualitative analysis. This is the only place you see it.

A

.

59
Q

11.4 Perform quantitative risk analysis

What does the process do?

A

Process numerically analyzes the fact of identified risk/uncertainty on overall project objectives.

Normally done after qualitative ranking of risks

quantifies overall project risk exposure

must have high quality data about the risk and uncertainty

not required for all projects

60
Q

What is the only method to assess overall project risk by evaluating to affect of all project risk

A

Quantitative risk analysis

61
Q

11.4 quantitative risk analysis | T&T

During data gathering interviews what three words are used to categorize the scenarios?

A

Pessimistic
most likely
optimistic

62
Q

11.4 quantitative risk analysis | T&T

Which data analysis technique is used to determine which individual project risk have the most potential impact on project outcomes?

A

Sensitivity analysis

A tornado diagram is typically used as a display of sensitivity analysis

63
Q

11.4 quantitative risk analysis | T&T

What is the expected monetary value formula?

A

Multiplying the probability P times impact I to calculate a risk value

EVM = P * (I $)

probability as a percentage between zero and one and impact is currency

64
Q

11.4 quantitative risk analysis | T&T

EMV. How do you calculate contingency reserves

A

Total threats minus total opportunities equals contingency reserves

65
Q

11.4 quantitative risk analysis | T&T

What is a decision tree analysis

A

A diagramming and calculation technique used to support selection between several alternative courses of action when faced with the risk

Uses EMV to make a choice between each decision tree branch

66
Q

11.5 Plan risk responses

What does the plan risk response process do

A

The process to develop opinions, select strategies, and agree on actions to address the overall project risk exposure, and to treat individual project risks

67
Q

11.5 Plan risk responses NOTE

Plans are made by the risk owner

Primary and secondary strategies are developed to

decrease the probability or impact of a threat before the cars or

to increase the probability or impact of an opportunity before it occurs

A

.

68
Q

11.5 Plan risk responses

Input - What is the enterprise environmental factor?

A

Risk appetite and thresholds

69
Q

11.5 Plan risk responses | T&T

What are the two data analysis?

A

Alternatives analysis

cost benefit analysis

70
Q

11.5 Plan risk responses | T&T

Explain cost benefit analysis

A

Individual project risk impacts are quantified and currency to calculate the ratio

the higher the ratio, the more effective the response.

Bigger is better

Change in impact level/ Implementation cost = response strategy cost effectiveness

71
Q

11.5 Plan risk responses | T&T

What are the five strategies for negative risks and threats

A 
Avoid 
transfer = insurance 
Mitigate - To reduce the probability or impact of a threat. Look at options separately for both probability versus impact
escalate 
Accept
72
Q

11.5 Plan risk responses | T&T

What are the five strategies for opportunities

A 
Share 
enhance 
exploit 
escalate 
Accept
73
Q

11.5 Plan risk responses | T&T

What are the two types of acceptance for both threats and opportunities and what is the definition

A

Active acceptance
Creates contingency time reserves, cost reserves, or contingency plans to use if the risk occurs

Passive acceptance
Involves no actions are taken except periodic review to see if the risk changes or occurs

74
Q

11.5 Plan risk responses | Output

What is residual risk

A

Risks that remain after risk responses have been taken or risks that have been deliberately accepted

75
Q

11.5 Plan risk responses | Output

What is secondary risks

A

A direct outcome of implementing a risk response.

Ex: The side effects of a pill. You implemented the process and now you have another risk

76
Q

11.6 Implement risk responses

What Occurs in this process

A

The process of implementing an agreed-upon risk response plan

77
Q

11.7 Monitor risks

What occurs in this process?

A

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

78
Q

11.7 Monitor risks

NOTE
Risk related questions on the exam are very complex and assume a proper risk management plan is being utilized

risk owners are in place and are tracking the risks

the project has less risk since risk management plan has been done

A

.

79
Q

11.7 Monitor risks | output

What are the OPA updates

A

Templates for the risk management plan, risk register, and risk report

risk breakdown structure

80
Q

Risk Summary
Assume risk management is performed on the project

the exam has complex situational questions with the project manager would have experienced the event

The exam also may ask how the risk management activities change during the project

visualize where you are in the risk process
know what actions need to be done for each risk process

if a risk is identified after the initial process the first step … is it already in the risk plan on risk register?

It’s a risk occurs notify the risk on her to implement the response

A

.

PMP With PMI (18 decks)

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