Risk Management

Question 1

What is risk management?

Answer 1

• A process for identifying and responding to risks associated with the delivery of an objective such as a construction project.

Question 2

What is a Risk Event?

Answer 2

• An event that can be predicted to at least some degree, generally based on historical data or experience.

Question 3

What is an uncertain or unforeseen event?

Answer 3

• A random event that defies prediction.

Question 4

Why is risk management needed in construction?

Answer 4

• Projects are typically complex, all have time, cost and quality targets which must be met.
• Risk is present in all projects and surveyors are routinely involved in making decisions which have a major impact on risk.
• Risk management cannot eliminate risk, but techniques can be used to reduce the impact of events that may cause failure to reach the desired targets.

Question 5

What are the stages of Risk Management?

Answer 5

• Identification.
• Analysis.
• Response.
• Monitor and control.

Question 6

Can you give me some examples of risk in a
construction project?

Answer 6

• External risks for example include economic uncertainty, legislation changes and changes in government policy.
• Site risks such as restricted access, planning difficulties and environmental issues can also be considered as further examples.
• Construction and delivery risks may include adverse weather, H&S and availability of resources.

Question 7

What are the benefits of risk management?

Answer 7

• Increased confidence in achieving project objectives and success.
• Reduced likelihood of cost and time overruns.
• The team understands and recognises the use and composition of contingencies.

Question 8

Describe the format of the risk register?

Answer 8

1) A description of the risk.
2) The risk owner.
3) A probability of occurrence.
4) Cost impact of its occurrence.
5) Actions required.
6) Review date.

Question 9

What role does the QS play in Risk Management?

Answer 9

• Assist in setting & managing contingency funds appropriately.
• Undertake risk analysis to ensure accuracy of funds available.
• Assist in the decision making process by providing estimates with a degree of certainty.

Question 10

Can risk be calculated?

Answer 10

• Risk can be calculated to an extent with suitable provision being made for the risk.
• however it cannot be calculated exactly otherwise it would not be classified as a risk.

Question 11

What is Monte Carlo analysis?

Answer 11

• Monte Carlo Analysis is a risk management technique used to conduct a quantitative analysis of risks.
• Monte Carlo gives you a range of possible outcomes and probabilities to allow you to consider the likelihood of different scenarios.