Risk Management Flashcards
Risk
uncertainty; an unknown future event; positive risks are opportunities, negative risks are threats
Residual Risk
any risk that remains after the risk response strategy has been implemented
Secondary Risk
risks that occur as a result of implementing a risk response strategy
Qualitative Risk Analysis
a quick and easy risk assessment method that combines the probability and impact to assign a risk score
Quantitative Risk Analysis
a more rigorous risk assessment which numerically analyzes the effect of identified risks on overall project objectives
Probability and Impact Matrix
a matrix used during qualitative risk analysis that multiplies the risk probability (high, medium or low) by the impact to come up with a risk score, which is then used to create a prioritized list of risks
Expected Monetary Value (EMV)
formula: EMV = Probability x Impact
Sensitivity Analysis
graphically shows which variables have the greatest impact on the project, e.g. tornado diagram
Threat Strategies
Avoid (change something so that the threat no longer exists), Transfer (shift the risk to a third party, perhaps via a contract), Mitigate (increase or decrease the probability and/or impact, an alternate plan), Accept (includes passive and active approaches)
Opportunity Strategies
Explot (change something to ensure the opportunity occurs), Share(share with a third party, perhaps via a joint venture), Enhance (increase or decrease the probability and/or impact, an alternate plan), Accept (live with it)
Workarounds
an unplanned response used when either unidentified risks occur or when a risk has been passively accepted.
Reserves
money or time set aside in case a risk occurs; contingency reserves are for identified risks, management reserves are for unidentified risks
