Lecture 12 Flashcards
What can we do with risk?
- accept
- control (minimise/mitigate)
- avoid
- transfer (insure (pass on to 3rd party))
What is a risk
risk is a combination of:
- the chance of an event happening
- the outcome should that event occur
when is greatest uncertainty/risk
at the start of a project
when is risk management most effective
early on in the project
when should risk management be carried out
throughout a project
most important time to apply risk management
at ‘project sanction’
Fundamental steps of risk management process
- identification
- analysis
- response
identification
- hardest step
- must identify all risks which may affect the project
- typical identification technique uses a hierachy of risks
analysis
two steps
- the ‘evaluation’of the individual risks
- the ‘evaluation’ of all the risks together
Qualitative Risk Analysis
Probability and impact of occurence for each identified risk
- assessed by the pm with input from the project team
High probability
greater than 70% probability of occuring
Medium Probability
between 30% and 70% probability of occuring
Low probability
less than 30% probability of occurence
High Risk
potential to greatly impact project cost, schedule or performance
Medium Risk
potential to slightly impact project cost, schedule or performance
Low Risk
relatively little impact on cost, schedule or performance
Risk Mitigation Handling Options
- Avoid
- Control
- Transfer
- Accept
