Risk Management

Question 1

What information would you expect to see on a Risk Register?

Answer 1

• Risk ID
• Date risk raised
• Risk Status
• Description of risk
• Risk Response
• Risk owner
• Probability and Impact
• Expected Monetary Value

Question 2

Which risk would you normally price on a Risk Register?

Question 3

Risk management process?

Answer 3

• Identification
• Analysis
• Response to risk
• Management of risk

Question 4

What is the purpose of a risk workshop?

Answer 4

Bring together all stakeholders on a project to identify risks from all backgrounds.

Question 5

How do you evaluate a risks probability and impact?

Answer 5

Review time and cost implications of each risk and score the risk, typically 1-5 which is determined by the clients attitude to risk.

Question 6

Is there any other way to assess a risk other than Probability and Impact?

Answer 6

Monte Carlo simulation.

Question 7

How does a Monte Carlo simulation work?

Answer 7

Data is inputted into programme and a simulation is ran to give a percentage likelihood of the risk occurring.

Question 8

How does Monte Carlo differ to Probability and Impact?

Answer 8

Monte Carlo runs the simulation over a wide range of parameters and scenarios whereas Probability and Impact is done just the once.

Question 9

Are you aware of EMV as a risk management method?

Answer 9

EMV utilises decision trees via a computer simulation to provide an overall EMV value based on multiple options. e.g. two sites

Question 10

What are the various risk responses?

Answer 10

SADEM:
- Shrink
- Accept
- Distribute
- Eliminate
- Monitor

Question 11

When distributing or transferring a risk to another party, what do you have to consider?

Answer 11

The ability of the other party to manage that risk, the effect of them baring that risk and cost of transferring the risk.

Question 12

Under traditional procurement, who bares the risk?

Answer 12

• Client bares design risk
• Contractor bares construction risk

Question 13

Under design and build procurement, who bares the risk?

Answer 13

• Contractor bares construction risk
• Design risk is transferred from Client to Contractor however client maintains some of the risk in terms of discrepancy in documents during pre-contract. e.g. missing something from Employers Requirements.

Question 14

How do single stage and two stage tendering differ in terms of risk?

Answer 14

Design risk transfer remains the same however exposure to risks may reduce due to early contractor involvement.

Question 15

How would you calculate contingency on a project?

Answer 15

• Utilising priced risk register
• Or apply a percentage based on risks associates with the project based on the four risk parameters within NRM.