Level 1 Flashcards
Knowing
What is risk defined as?
An uncertain event or circumstance that if it occurs will affect the outcome of a programme/project.
How should risks be categorised? What are the categories?
In accordance with RICS NRM 1. General Categories are political and business risks, benefit risks consequential risks, project risks, programme risks. NRM 1 risk categories are; employer other risks, employer change risks, construction risks, design development risks.
What risk mitigation strategies are you aware of?
STARR
Risk avoidance
Risk transfer
Risk reduction
Risk sharing
Risk retention
What is risk avoidance?
Risks have such serious consequences on a project outcome that they are unacceptable. Include review of employers brief, reappraisal of the project. Changing the design or cancelling the project.
What is risk transfer?
Occurs where accepting the risk would not give the employer best value for money. Pass the responsibility to another party better able to control the risk. The total costs of the risk premium to transfer it should give better overall value for money to the employer. the total cost of the risk to the employer is reduced by more than the cost of risk premium. (Take out insurance cover)
What is risk reduction?
Occurs where the level of risk is unacceptable.
What is risk sharing?
Where a risk is not entirely transferred and the employer retains some of the risk.
What is risk retention?
The employer retains risks that are not necessarily controllable. The remaining risk is called the residual risk exposure.
What are the four stages of the risk management process?
Identify risks.
Assess and measure risks.
Apply controls.
Monitor and review effectiveness.
What is EMV?
Expected monetary value is a way of quantifying the expected loss or gain from undertaking a project. EMV = Probability x Impact
What are the types of risk identification techniques?
1.Risk management strategy:
2. Risk breakdown structure RBS: (identified by project team aid of a RBS identifies potential risk generators in risk environments. (natural, economic, govern, docietal, client, contraction, project).
3. Risk categories: (external; uncontrollable, influenceable or internal; client operations, user requirements, project processes (all controllable).
4. Other risk identification techniques include: brainstorming, project document review, team workshops, historical information.
What is a Monte Carlo analysis?
This is a mathematical technique that utilises random sampling, within specific distributions to calculate the probability of explicit outcomes. Used by external company software.
How can risks be quantified?
Prolongation costs, fixed lump sums based on understanding the scope, constraints, exclusions, assumptions. Cost plans, past experience and lessons learnt from similar projects.
What are risk distributions in Risk cost analysis?
Triangular - three parameters
uniform - 2 parameters equally likely
Pert - relaistic
