Review - Chapter 11 Flashcards
Risk
An uncertainty that can have a negative or positive effect on meeting project objectives.
Risk Utility
The amount of satisfaction or pleasure received from a potential payoff.
Risk-Averse Person
When more is at stake, they gain less satisfaction from the risk.
Risk-Seeking Person
Has a higher tolerance for risk, they are more satisfied when more is at stake.
Risk-Neutral Person
Achieves a balance between risk and payoff.
Known Risks
Risks that the project team has identified and analyzed and can be managed proactively.
Unknown Risks
Risks that have not been identified and analyzed. They cannot be managed.
Major Processes of Risk Management
- Planning Risk Management
- Identifying Risks
- Performing qualitative Risk Analysis
- Performing quantitative Risk Analysis
- Planning Risk Responses
- Implementing Risk Response
- Monitoring Risk
Risk Management Plan
Documents the procedures for managing risk throughout the project.
Contingency Plans
Predefined actions that the project team will take if an identified risk event occurs.
Fallback Plans
Developed for risks that have a high impact on meeting project objectives and are put into effect if attempts to reduce the risk do not work.
Contingency Reserves/Allowances
Funds included in the cost baseline that can be used to mitigate cost or schedule overruns if known risks occur.
Management Reserves
Funds held for unknown risks that are used for management control purposes and are not part of the cost baseline.
Risk Breakdown Structure
A hierarchy of potential risk categories for a project.
Brainstorming
A technique by which a group attempts to generate ideas or find a solution for a specific problem by amassing ideas spontaneously and without judgement.
