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PMP > Risk Management > Flashcards

Risk Management Flashcards

1
Q

Primary Risk Management Processes

A
  • Plan Risk Management
  • Identify Risks
  • Perform Qualitative Risk Analysis
  • Perform Quantitative Risk Analysis
  • Plan Risk Responses
  • Control Risks
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2
Q

Known Risks

A
  • have been identified and analyzed
  • possible to plan responses
  • Knwon risk that cannot be proactively managed should be assigned contingency reserves
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3
Q

Unknown Risks

A
  • cannot be managed proactively
  • Should be assigned a management reserve
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4
Q

Risk Appetite

A
  • degree of uncertainty an entity is willing to take on in anticiaption of a reward
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5
Q

Risk Tolerance

A
  • Degree, amount, or volume of risk that an organization or individual will withstand
    *
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6
Q

Risk Threshold

A
  • measures along the level of uncertainty ir the level of impact at which a stakeholdr may have a specific interest
  • Below the threshold, they will accept the risk
  • Above the threshold, they will not tolerate the risk
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7
Q

Risk Management Plan Components

A
  • Methodology
  • Roles and Responsibilities
  • Budgeting
  • Timing
  • Risk Categories
  • Definitions of risk probability and impact
  • Probability and Impact Matrix
  • Revised Stakeholder tolerances
  • Reporting formats
  • Tracking
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8
Q

Risk Information Gathering Techniques

A
  • Brainstorming
  • Delphi Technique
  • Interviewing
  • Root Cause Analysis
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9
Q

Brainstorming

A
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10
Q

Delphi Technique

A
  • Way to reach a concensus of experts
  • Participate anonymously
  • Use a quesitionairre to solicit ideasabout important risks
  • ideas are consolidated then recirculated to the experts
  • Helps to redues bias in the data
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11
Q

Root-Cause Analysis

A
  • USed to identify a problem or to discover the underlying cause that lead to it, and develop preventative action
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12
Q

Risk Diagramming Techniques

A
  • Cause and Effect Diagrams
  • System or process flow charts
  • influence diagrams
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13
Q

Checklist Analsysis

A
  • Use of a checklist for risks from historical information
  • Should not be used in place or proper risk management
  • Would likely be used for very repeatable projects and processes
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14
Q

Risk Cause and Effect Diagrams

A
  • Also known as fishbone diagrams
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15
Q

Risk System or process flow charts

A
  • how various elements of a system interrelate and the mechanism of causation
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16
Q

Influence Diagrams

A
  • Graphical representations of situations showing causal influences, time ordering of events, and other relationships aming variables and outcomes
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17
Q

SWOT Analysis

A
18
Q

Qualitative Risk Assessment Tools and Techniques

A
  • Risk proabability and Impact Assessment
  • Probability and Impact Matrix
  • Risk Data Quality Assessment
  • Risk Categorization
  • Risk Urgency Assessment
19
Q

Risk probability and impact assessment

A
  • looking at the prbability and impact on each risk
  • Think of the traditional risk log
20
Q

Probability and impact matrix

A
  • Risk rating rules usually pre-defined
  • matrix to score each risk based on probability and impact
  • Color scales may be used to identify high, medium, low risk based on organizational rules
  • Risk Scores help to determine priority of action and response
21
Q
A
22
Q

Risk Data Quality Assessment

A
  • Determining the degree to which riskl data is useful in managing those risks
  • For example, do you have adequate information to understand and rsspond to the risk
23
Q

Risk Categorization

A
24
Q

Risk Urgency Assessment

A
  • Considers indicators of priority
  • risks requiring near-term responses
25
Q

Quantitative Risk Analysis

A
  • Risk evaluation based on numerical analysis
  • May or may not be possible depdning on data available for the project
  • Almost always follows the qualitative analysis process
26
Q

Qualitative Risk Analysis Techniques

A
  • Data Gathering and Representation Techniques
    • Interviewing
    • Probability Distributions
  • Modeling Techniques
    • Sensitivity Analysis
    • Expected Monetary Value (EMV) Analysis
    • Modeling and Simulation
27
Q

Data Gathering: Interviwewing

A
  • drawing on historical data
  • Estimasting risk based on low, most likely, and high estaimtes
28
Q

Probability Distributions

A
  • represent uncertsinty in values
  • Think bell curve
  • Shape of curves may be determined by data or by risk policies
29
Q

Sensitivity Analysis

A
  • Used to determine which risks have the most potential impact on the project
  • Investigates the extent to which uncertainty or each proejct element affects the objecitves when all other uncertain elements are held constant
  • Common representation of this is the Tornado Diagram
    • Y-Axis contains each type of uncertainty
    • X-Axis contains the spread or correlation of the uncertainty at base values
30
Q

Expected Montetary Value Analysis

A
  • Calculates the average outcome when future includes scenarios that may or may not occur
  • Used for analysis under uncertainty
  • Opportunities generally expressed as positive values
  • Threats usually expressed as negative values
  • Requires a risk-neutral assumption (neither risk averse, nor risk seeking)
  • Typically uses decision tree analysis
  • EMV is calculated by multiplying the value of each posible outcome by its probability of occurence and adding the products together
31
Q

Modelling and Simulation

A
  • translates the specificed uncertainties into their potential impact on project objectives
  • Typically performed using the Monte Carlo technique
32
Q

Negative (Threat) risk response techniques

A
  • Avoid
  • Transfer
  • Mitigate
  • Accept
33
Q

Positive (Opportunity) Risk Response Techniques

A
  • Exploit
  • Enhance
  • Share
  • Accept
34
Q

Avoid

A
  • Negative Risk Repsonse strategy where project team acts to eliminate the threat or protect the team from its impact
  • Usually changes the project’s objectives, including changing scope, or to the extreme of shutting down the project
35
Q

Transfer

A
  • Negative risk response strategy in which the proejct team transfers the impact of the threat to a third party, along with the ownership of the response
  • Does not eliminate risk
  • Typically includes payment of a risk premium to the owning party (higher rates, etc)
  • Contracts might be used to transfer liability
  • Reason for companies hiring vendors for example
36
Q

Mitigate

A
  • Negative risk response sterategy in which the project team acts to minimize the probability of occurance or impact of a risk
  • Examples include:
    • adopting less complex processes
    • conducting more tests
    • choosing a more stable supplier
    • designing redundancy into a system
37
Q

Accept

A
  • Negative risk response strategy in which the project team decides to acknowledge the risk and not take any action unless the risk occurs
  • Usually used when there is no way to address a risk in any other way
38
Q

Exploit

A
  • Positive risk response strategy in which the organization wants to ensure that the opportunity is realized
  • Esnuring the opportunity definitely happens
39
Q

Enhance

A
  • Positive risk response strategy used to increase pobabilityand/or positive impacts of an opportunity
  • Example: is adding more resources to an activity to finish early
40
Q

Share

A
  • Positive risk response in allocating some or all of the ownership to a third party that is more capable of capturing the opporunity
  • Example might include outsourcing for a specialized task
41
Q

Accept

A
  • Positive risk strategy in which the team is willing to take advantage of the opportunity if it arises, but does not actively pursue it
42
Q

Contingent Response Plan

A
  • Risk response plan that will only be executed if certain conditions occur

PMP (11 decks)

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