Risk Management Flashcards
What are the different profiles of risk each NEC3 option?
NEC
What is the risk?
• It is a potential event that is uncertain, that if it occurs, may cause the negative effect on the project’s objectives
What is quantified and qualitative risk assessment?
- Qualitative is a subjective way of assessing risk, by stating the likelihood and impact of the risk you get a score which helps you priorities the higher score one
- Quantified is an objective way of managing risk, by using data you can assign a numerical value to the risk.
What is a Monte Carlo Simulation?
• Computer software to predict the risk
What is a risk register?
• A document listing all the risks identified on a project, explaining the nature of their risk and scores them by likelihood and cost impact.
How do you go about creating a risk register for a new project?
• Brainstorm with the project team to understand what the likelihood and impact of each risk is.
How do you use the risk register?
- Continuously updating it with project team
* Assign ‘likelihood’ and ‘impact’ scores to each risk to give an overall risk score.
What is risk allocation?
- Risks should be allocated to those best able to manage it, in a manner likely to optimize project performance
- You would label who the owner is
What are the risk management strategies?
- Avoidance -remove or alternative solution considered
- Reduction – minimize the impact as much as possible
- Transfer – Transfer the risk to another party or insurance
- Share – share between parties, usually achieved through the construction contract
- Retention – Noting and keeping the risk and controlling it.
What are benefits of risk management?
- Enable decision making to be made on an assessment of know variables available
- More likelihood of achieving project objectives
- Lower cost
- Less delays
Why is risk management needed in construction?
- Projects are typically complex
- Increase the chance of hitting your project objectives
- To make the most risk averse decisions
How do you report/monitor risks?
- Using a risk register: Risks are logged, tracked throughout the life of the project
- Item: Threats/opportunities likelihood/impact
- Regular updating it
What is a risk allowance?
- Sum included in the estimate to cover unknown expenses or unmitigated risk items
- Estimate of cost of dealing with an individual risk should it materialize.
How did you decide who owns which risk?
The best person who is able to mitigate it.
The owner of each risk should be someone for whom the risk is relevant to their job and who has the authority to do something about it.
