Risk management Flashcards

1
Q

what is risk?

A

an uncertain event or set of circumstances that, should occur, will have an effect on the achievement of the project’s objectives

risk management should be a process integral to the project planning/management process

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2
Q

what is the risk management process

A
  1. initiate - ensure common understanding of project objectives, scope and success criteria
  2. identify
  3. assess - look at structure of risks and ownership, estimate probability and impact
  4. plan responses
  5. implement responses and control

IIAPI

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3
Q
  1. Initiate
A
  • Look at scope, sucess criteria and project objectives
  • risk management focusses on customer needs
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4
Q

what is contained in the risk management plan?

A
  • developed in Definition stage
  • description of project risk management process
  • criteria for tolerability of risk (what constitutes excessive risk?)
  • roles and responsibilities
  • risk register format
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5
Q
  1. identification
A
  • development of risk register
  • they should be specific and consider a range of factors
  • identification can be done using mechanisms such as brainstorming, SWOT analysis, interviews, questionnaires, assumptions and constraint analysis
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6
Q

give some examples of risk factors

A

human
commercial
political
economic
social
legal
environmental

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7
Q
  1. identification what is assumptions and constraints analysis?
A

mechanism used for risk identification

  • identifies assumptions and constraints made whilst developing project plan.
  • assumptions then analysed based on their sensitivity (importance to project objectives) and stability (how likely assumption will be false)
  • then ranked and converted into risks

+ quick, specific
- subjective - relies on assumptions being identified

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8
Q
  1. identification: brainstorming
A

activity should be structured, for example around the WBS.

+ cost effective, wide ranging
+ involves those involved with project, assists communication and understanding
- depends on strong facilitation to keep group on track
- impractical ideas
- risks exaggerated

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9
Q
  1. identification; check lists
A

Draws on risks identified in previous projects yes/no/not applicable/unknown
+ uses past experience
+ quick process
- restricted to items on paper
- may be too generic and not up-to-date

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10
Q
  1. Identification; Delphi Technique
A

structured method of obtaining group consensus on risk. group of experts meet under guidance of a chairperson to provide assessment of risk.
their responses are then circulated to group

+ taps into expert opinion

  • requires experts, time consuming, requires coordination
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11
Q
  1. risk assessment what does it aim to establish?
A

structure of risks identified

ownership of the risks, between client and contractor

estimation of the probability evaluation raks and prioritises risk

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12
Q
  1. risk assessment; evaluation
A

Categorisation of identified risk according to severity

Priorities risk for treatment

The scores developed for each risk in the P-I matrix can now be used as the basis for ranking and prioritising risks for treatment.

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13
Q

what is the P-I matrix?

A

probability-impact matrix is a tool for estimating level of risk uses assigned numbers to categorise risks and provide overall measure of their severity

process;
1. define ranking scales and criteria for each scale point

  1. assign scores for each scale point
  2. derive the P-I scores for each risk

4, risks then evaluated and ranked according to P-I scores

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14
Q

Explain P-I process

A

1. define ranking scales and criteria agreed high/medium/low or five-point scale criteria are project specific

  1. assign scores for each scale point linear score used for probability and logarithmic scale used for impact
  2. derive P-I scores for each risk -

PxI for each impact.

creates a positioning matrix into which each risk can be placed

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15
Q

What is risk evaluation (part of P-I process)?

A

This process priorities risks for treatment scores from P-I matrix used

High/medium/low categorisation

is there concentration of risk in one area?

how is risk distributed in project?

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16
Q
  1. Plan responses
A
  • identify strategies and options for treating risk
  • evaluate options on cost/benefit basis
  • prepare action plans
  • nominate risk owner
17
Q
  1. plan responses;
    Risk treatment strategies; what do they depend on and what should they be?
A

strategy depends on

  • acceptability of risk and cost/benefit of options

strategies should be SMART - specific measurable appropriate realistic time-bound

18
Q
  1. plan responses; risk treatment strategies
A

accept - do nothing

avoid/eliminate - change or abandon goals to remove risk reduce probability

mitigate causes - to reduce impact

if risk has occurred - contingency, budget, float

19
Q
  1. identification; cause/effect analysis
A

understand defective components (root causes of risk)
use fishbone diagram

20
Q

Risk monitoring, control and review

A

Tools for reporting;

risk register

P-I matrix showing risks top ten rank list of risks

21
Q

what is risk register?

A
  • output of risk management process
  • living document
  • list of identified risks
  • P-I assessment
  • Timescale and cost of treatment
  • Current ranking of risk
22
Q

Which of the following best describes a project risk?

A. An unforeseen event or set of circumstances which, if it occurs, will have an effect on the achievement of the project’s objectives.

B. A current problem that will result in the project going over budget

C. A future event that if it occurs will impact on one or more project objectives

D. A current problem that needs resolving because failure to do so will delay the project.

A

C. A future event that if it occurs will impact on one or more of the project objectives