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Risk Management > Risk Management > Flashcards

Risk Management Flashcards

1
Q

What is a ‘Risk’?

A

An uncertain event that, if it occurs, will affect the outcome of a project
Risk can refer to both positive and negative uncertainties

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2
Q

What is ‘Consequential Risk’?

A

A risk that may occur as a result of another risk occurring

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3
Q

What is ‘Risk Appetite’?

A

The willingness of a person or an organisation to accept risk

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4
Q

What is a risk register?

A

The willingness of a person or an organisation to accept risk
The purpose is to continuously monitor risks throughout the project period to minimize or mitigate the consequences

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5
Q

What are the NRM1 risk categories?

A

Design development risks
Construction risks
Employer change risk
Employer other risks (e.g. early handover, postponement, availability of funds etc.)

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6
Q

What is risk management?

A

 Client’s risk appetite
 Who is responsible for risk management
 How risks will be identified, analysed, managed and reviewed
 Frequency of risk review meetings
 Software tools and techniques that will be used
 Reporting forms and structures

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7
Q

Explain a typical risk management process? (5 main steps)

A

Identify
Analyse
Monitor

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8
Q

What risk response and mitigation strategies are available an example for each?

A

Risk avoidance - UXO

Risk reduction - contamination (S.I works)

Risk transfer - D&B

Risk sharing (where the risk is not entirely transferred and the employer retains some element of risk)

Risk retention (employer retains risks that are not necessarily controllable – Stats

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9
Q

Explain quantitative risk analysis (QRA)?

A

Calculation of cost or time effects of risk.

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10
Q

What is ‘expected monetary value?’

A

Multiplying the likelihood of the risk occurring by the size of the outcome (as monetised)

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11
Q

What are probability trees?

A

Technique for determining the overall risk associated with a series of related risks. Used to calculate ‘expected monetary value’ in more complex situations.

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12
Q

What is fault tree analysis?

A

Involves working back from a negative outcome to identify cause(s)

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13
Q

What is event tree analysis?

A

Find possible outcomes from an initial event - opposite of fault tree analysis

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14
Q

What is percentage addition?

A

Risk allowance is based on a percentage of the cost – should only be used for initial order cost estimates.

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15
Q

What is the probabilistic method?

A

More in-depth version of the simple method (sometimes called 3-point estimating) – best, likely and worst cases for each risk are prepared

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16
Q

What are the different type of risk?

A 
Site (Ground conditions, asbestos, contamination)
Design
Construction
Programme
Client 
Stats
Tender
S106
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17
Q

What is design development risk allowance and an example?

A

Planning requirements, legal agreements, covenants, environmental issues, stats, procurement process and tender delays

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18
Q

What is construction risk allowance and an example you’ve dealt with?

A

An allowance during the construction process for the risks associated with construction

Contamination
Obstructions
UXO

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19
Q

What is Employer change allowance?

A

Allowance for both design and construction phases for changes made by the client

Instructions
Hoarding

20
Q

What is employer other risk allowance?

A

An allowance for other risks
Early handover, postponement, acceleration, availability of funds, LDs

Where LDs may not be the actual loss for client

21
Q

How can a client minimize his design risk?

A

D&B contract
Contractors Design Portion
Novation

22
Q

What does a risk register look like?

A

Description, priority, probability, value, owner, mitigation strategy

23
Q

How do you identify risks?

A

A risk workshop where all parties can have an input

24
Q

How to calculate a risk?

A

To provide an informed risk budget I would gather as much information as possible (workshop- Delphi)
Benchmarking

25
Q

How to calculate the likelihood of a risk occuring?

A

Workshops, Monte Carlo, Central Limit Thereom

26
Q

Who owns a risk?

A

Can be dependent on:
risk itself
procurement route

27
Q

How are risks captured?

A

Risk register

28
Q

Approaches to identifying risks?

A

Lists, brainstorming, delphi technique

29
Q

What is risk allocation

A

To allocate to the party who can manage risk best

30
Q

Benefits of Risk Management?

A

Increased confidence in achieving project objectives
Reduces surprises and cost/time overruns
Enable greater decision making
Encourages communication and collab

31
Q

How to price risk at NRM1?

A

In line with the four NRM1 categories

32
Q

What are the techniques of valuing risks?

A 
Expected monetary value
Probabilistic method
Central Limit Thereom
Monte Carllo
Route Means Square
33
Q

Why are risks tracked?

A

Within progress meetings to potentially alleviate risks and to value risks throughout

34
Q

Why is a QS so important to Risk Management?

A

Monitoring of the clients budget and costs

35
Q

Why are risk registers important?

A

To track risks throughout the project life

36
Q

How does the monitor of risks assist cost control?

A

Continuously management of risks assists in managing the clients budgets and cashflow

37
Q

How is there risk protection in contracts?

A 
Procurment / Contract type
Bonds / PCG
Retention
Materials on/off site
LD's
Defects Liability Period
38
Q

What is Monte Carlo?

A

A Monte Carlo simulation that analyses risk and gives several out comes based on data input into the simulation

39
Q

What is the difference between quantitative and qualitative risk?

A 
Quantitative = severity x likelihood
Quantitative = the technique of quantifying the cost of a risk occuring
40
Q

How can you transfer a risk?

A

Procurement
Contract
Type of risk (at a cost)

41
Q

Who determines the probability of a risk?

A

This can be expressed by all parties to arrive at the likelihood of a risk occuring

42
Q

What is residual risk?

A

Risk retained by Employer

43
Q

How would you advice an allowance for the risk of JK?

A 
Is the risk true? Percentage of probability may be affected
Site survey
Removal of JK
Report
Future monitoring
44
Q

What others factors are effected by risks?

A

Time / Programme
Quality
Planning

45
Q

How do you provide allowances in your risk register?

A

Probability x likely cost

46
Q

Can you give me some examples of risks you have assessed?

A

Japanese Knotweed - £25k
Acoustic Screen - £200k
Contamination - £150k

47
Q

Can you tell me the general risk categories?

A 
Political and business 
Beneficial 
Consequential 
Project 
Programme

Risk Management (1 decks)

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