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
How to calculate the likelihood of a risk occuring?
Workshops, Monte Carlo, Central Limit Thereom
26
Who owns a risk?
Can be dependent on: risk itself procurement route
27
How are risks captured?
Risk register
28
Approaches to identifying risks?
Lists, brainstorming, delphi technique
29
What is risk allocation
To allocate to the party who can manage risk best
30
Benefits of Risk Management?
Increased confidence in achieving project objectives Reduces surprises and cost/time overruns Enable greater decision making Encourages communication and collab
31
How to price risk at NRM1?
In line with the four NRM1 categories
32
What are the techniques of valuing risks?
``` Expected monetary value Probabilistic method Central Limit Thereom Monte Carllo Route Means Square ```
33
Why are risks tracked?
Within progress meetings to potentially alleviate risks and to value risks throughout
34
Why is a QS so important to Risk Management?
Monitoring of the clients budget and costs
35
Why are risk registers important?
To track risks throughout the project life
36
How does the monitor of risks assist cost control?
Continuously management of risks assists in managing the clients budgets and cashflow
37
How is there risk protection in contracts?
``` Procurment / Contract type Bonds / PCG Retention Materials on/off site LD's Defects Liability Period ```
38
What is Monte Carlo?
A Monte Carlo simulation that analyses risk and gives several out comes based on data input into the simulation
39
What is the difference between quantitative and qualitative risk?
``` Quantitative = severity x likelihood Quantitative = the technique of quantifying the cost of a risk occuring ```
40
How can you transfer a risk?
Procurement Contract Type of risk (at a cost)
41
Who determines the probability of a risk?
This can be expressed by all parties to arrive at the likelihood of a risk occuring
42
What is residual risk?
Risk retained by Employer
43
How would you advice an allowance for the risk of JK?
``` Is the risk true? Percentage of probability may be affected Site survey Removal of JK Report Future monitoring ```
44
What others factors are effected by risks?
Time / Programme Quality Planning
45
How do you provide allowances in your risk register?
Probability x likely cost
46
Can you give me some examples of risks you have assessed?
Japanese Knotweed - £25k Acoustic Screen - £200k Contamination - £150k
47
Can you tell me the general risk categories?
``` Political and business Beneficial Consequential Project Programme ```