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Engineering Risk Management > Risk Management Process and Qualitative Analysis > Flashcards

Risk Management Process and Qualitative Analysis Flashcards

1
Q

Define Risk (AS ISO)

A

the effect of uncertainty on objectives

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2
Q

Two parts of risk

A

probability of something going wrong, consequences

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3
Q

Why we manage risks

A

commercial reasons: statutory, legal, cost, reputation, business
Personal reasons: statutory, legal, financial, career & reputation

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4
Q

Different people involved in Risk Management

A

Employees: planner, designer, project engineer, auditor
Manager: responsible for safety, project
Business owner: responsible for statutory and legal, commercial success, customer satisfaction

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5
Q

typical engineering risks (10)

A

Human, operational, reputational, procedural, project, financial, technical, natural, political, structural

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6
Q

Business Risk vs Corporate Risk

A

terms are general interchangeable
business risk sometimes limited to commercial matters
corporate risk refers to all aspects of establishing and operating business - risks that threaten reputation matter more than commercial risks

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7
Q

Types of business/corporate risks (20)

A

competitive, economic, operational, legal, compliance, strategy, reputational, program, project, innovation, country, quality, credit, exchange, interest, taxation, process, political, seasonal

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8
Q

Four quadrants of Business Risk

A

Operational (construction), financial (market), strategic (competition), hazard (injury)

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9
Q

ownership of risks

A
  • allocated to manager best able to understand and manage risk
  • when delegated to external entity, they become owner of risk
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10
Q

Risk Appetite definition

A

the amount and type of risk that an organisation is prepared to pursue, retain or take

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11
Q

Typical Risk Management Process (5+2)

A

1) Establish context: corporate information to understand risk profile
2) identify risks use workshop methodology to identify hazards, risks, likelihood, consequences
3) risk analysis: use workshops to analyse controls, estimate likelihood and frequency
4) risk evaluation: value consequences of risk occurring, and develop action plan for management of residual risk
5) Risk treatment: use risk registers to track ongoing implementations
ongoing:
- monitoring and review
- communication and consultation

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12
Q

Hazard definition

A

an event or situation that may give risk to risk

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13
Q

Risk Analysis Process (5 steps)

A

1) Understand context pf project risks
2) identify hazards and risks
3_) estimate likelihood of risk
4) value consequences of risk occurring
5) determine ranking of risk
6) control measuers
7) review control measures - update and monitor

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14
Q

Determine risk Ranking (main method)

A

Risk score calculation - using risk rating matrix

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15
Q

Risk treatment: Hierarchy of control measures

A

1) avoid/eliminate risk
2) control/mitigate risk
3) transfer risk
4) accept risk manage closely

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16
Q

ALARP

A

as low as reasonably practicable
- effectiveness of risk control

17
Q

Final Assessment of residual risks: control effectiveness (x) vs untreated risk rating (y) (four sections)

A

Top left: active management
Top right: control critical
Bottom left: periodic monitoring
Bottom right: no major concern

18
Q

Risk Register

A

a common tool in corporate risk management
used to filter risks, track progress, document action plans
classify risks, consequences, control measures
useful for risk owners, managers, directors
supported by report with workshops notes, analysis files, photos

19
Q

Benefit of Risk Analysis Workshop

A

no one in project team knows all possible implementation, opreational, third party nazards, risks, likelihoods, consequences

20
Q

Phases of Workshop

A

10-15 people
1) pre risk workshop: develop relationships, understand key objectives, brief on risk policy and register
2) during workshop: risk identify & analysis, assign owner
3) post workshops: follow up sessions, further develop risk register and share results

21
Q

Trade-off

A

a situation in which you accept something you do not want to have something you do want
complex and high intensity risk mitigation measures to achieve low likelihood risk vs benefit of accepting residual risk

22
Q

Risk owner will make trade-off on behalf of

A

Project owner (private)
Delegated project owner (public)
will consult stakeholders: regulator (environmental), finance insurer (commercial)

23
Q

Tolerable risks

A
  • risks society is willing to live with
  • risks society does not regard as neglible or something it might ignore
  • risks society is confident is being managed by owners
    risks that owner keeps under review and reduces if possible
24
Q

Link between qualitative risk analysis and quantitative risk anlaysis

A

qualitative risk analysis - quantitative input
subjective assessment - numerical input

25
Q

Qualitative analysis pros and cons

A

pros:
- quick and easy
- rich information
- well understand

cons:
- limited differences
- imprecise
- cannot numerically integrate and address risks

26
Q

Quantitative analysis pros and cons

A

pros
- provides clear differences
- precise
- can numercially integrate

cons:
- time-consuming
- assumptions
- may overlook qualitative impacts

27
Q

Principles of Risk Management (8)

A
  • Integrated: integral part of organisational activites
  • Structured and comprehensive: contributes to comparable results
  • Customised: proportionate to external and internal context related to objectives
  • Inclusive: invovlement of stakeholders
  • Dynamic: risks can appear, change and disappear
  • Best available information: past and current information
  • Human and cultural factors:
  • Continual improvement: through learning and experience
28
Q

Framework of risk management (6)

A
  • Leadership and comitment: customise framework and consider risks faced
  • Integration: understanding context, guides external and internal relationships,
  • Design: assign rules, responsibilities, resources
  • Implementation: develop plan considering time and resources
  • Evaluation: determine whether framework remains suitable for supporting objectives
    Improvement: adapt, monitor , improve
29
Q

Process of Risk Management (AS ISO) (6)

A
  • Communication and consultation: help stakeholders understand risk, during all steps, bring knowledge together
  • Scope, context, criteria: customise, define scope, external and internal context
  • Risk Assessment: Risk identification, analysis, evaluation
  • Risk treatment: select and implement action plans and control measures
  • Monitoring and review: improve quality - throughout
  • Recording and reporting: communicate across organisation
30
Q

Residual risk

A

risk that remains after implementing controls

31
Q

Describe internal context:

A

obtain corporate information to understand risk profile
covers factors within entity that are relevant to risk assessment:
- organisation structure, risk policy, governance and leadership, financial situation, human behaviour, information and data from previous risk assessments

32
Q

Describe external context of risk analysis

A

factors and conditions outside of organisation that impact risk - broader environment
- industry and market conditions
- legan and statutory
- political and social factors
- natural/environmental factors

33
Q

Scope and risk criteria

A

scope: consider objectives, time, location, resources
risk criteria: consider nature, time, consequence, level of risk, capacity, cost

34
Q

Discuss monitoring and review process

A
  • ongoing, throughout framework
  • adapting and improving risk management
  • how controls and used to mitigate risk
  • consequences of risks are assessed, and control measures put in place - review, update risk treatments to ensure they are appropriate and effective
35
Q

Machine (supervised) learning

A
  • used to create AI based on labelled training
  • can be used to predict outcomes
36
Q

Two approaches to supervised learning

A

ANN - activation function
FNN - fuzzy neural networks

37
Q

Support Vector Machine (SVM)

A

analyse data for classification and regression analysis

38
Q

Recurrent Neutral Network (RNN)

A

-sequential characteristic of data
- linked to time

39
Q

advantages of Long short-term memory (LSTM) networks

A
  • more efficient for longer term
  • sequence to sequence tasks
  • filter out irrelevant information and noise

Engineering Risk Management (1 decks)

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