Risk Management Flashcards
Acceptance
Acceptance
- The risk may be small so the risk may be accepted.
- A risk response appropriate for both positive and negative risks, but often used for smaller risks within a project.
Ambiguity Risks
Ambiguity Risks
Risks that have an uncertain, unclear nature, such as new laws or regulations, the marketplace conditions, and other risks that are nearly impossible to predict.
Avoidance
A risk response to avoid the risk.
Escalate
Escalate: the risk (or opportunity) is outside of the project scope and is escalated to management.
Acceptance
Acceptance
The risk may be small so the risk may be accepted.
Transference
Transference
Risk ownership is transferred to third party, usually for a fee.
Exploit
Exploit
A positive risk that a project wants to take advantage of.
Share
Share
A positive risk that can be shared with the organization or other projects.
Contingency fund
Contingency fund
An amount of funds used to offset a project’s risks.
Secondary risks
Secondary risks
A risk response creates another risk.
Residual risks
Residual risks
A risk response may create small generally accepted risks.
Triggers
Triggers
Condition, event, or warning sign that a risk is about to happen. Usually “triggers” a risk
response.
Positive risk
Positive risk
Risks with a positive impact; also called opportunities.
Negative risks
Negative risks
Risks with a negative impact; also called threats.
Pure risk
Pure risk
Only offers a negative impact (injury, fire, theft, destruction).
Business risk
Business risk
Offer an upside or a downside. These risks may have negative or positive outcomes.
Examples include using a less experienced worker to complete a task, allowing phases or activities to overlap, or forgoing the expense of formal training for on-the-job education.
Qualitative analysis
Qualitative analysis
Qualifying the risks for legitimacy.
This approach “qualifies” the risks that have been identified in the project. Specifically, qualitative risk analysis examines and prioritizes risks based on their probability of occurring and their impact on the project should they occur.
Quantitative analysis
Quantitative analysis
Quantifies the risk exposure.
This approach attempts to numerically assess the probability and impact of the identified risks. It also creates an overall risk score for the project. This method is more in-depth than qualitative risk analysis and relies on several different tools to accomplish its goal.
Utility function
Utility function
A person’s or organization’s willingness to accept risk. Relative to the project priority
as high-priority projects are typically risk adverse.
Also known as risk tolerance.
Cardinal scales
Cardinal scales
A ranking approach to identify the probability and impact by using a numerical value, from .01 (very low) to 1.0 (certain).
Checklists
Checklists
A quick and cost-effective risk identification approach
Data precision
The consideration of the risk ranking scores that takes into account any bias, the accuracy of the data submitted, and the reliability of the nature of the data submitted.
Delphi Technique
Delphi Technique
An anonymous method of querying experts about foreseeable risks within a project, phase, or component of a project.
The results of the survey are analyzed by a third party, organized, and then circulated to the experts.
There can be several rounds of anonymous discussion with the Delphi Technique, without fear of backlash or offending other participants in the process.
The goal is to gain consensus on project risks within the project.
Decision tree
Decision tree
A method to determine which of two or more decisions is the best one.
The model examines the costs and benefits of each decision’s outcome and weighs the probability of success for each of the decisions.