RMC Hot Topics 9th Edition Flashcards - Risk Management: 21-30
What can a project manager use in order to determine quantitative probability and impact?
Expert judgment from training risks specialists and team members
Data gathering techniques, such as interviewing
Data analysis techniques, such as Monte Carlo analysis
Interpersonal and team skills
Representations of uncertainty
Cost and schedule estimating
Use of historical records from previous projects
What is the purpose of Monte Carlo analysis?
Monte Carlo analysis is used to simulate the cost or schedule results of the project.
What is sensitivity analysis?
A technique to analyze and compare the potential impacts of identified risks. Sometimes represented by tornado diagram.
What is a decision tree?
A model of real situations used to make informed decisions by taking into account the associated risks, probabilities, and impacts.
What is the formula for expected monetary value?
What is the formula for schedule?
Expected monetary value:
Probability times impact or
EMV = P x I
Schedule:
EV = P x I
What are the possible risk response strategies for threats?
Avoid: eliminate the threat by eliminating its cause.
Mitigate: reduce the probability or impact of the threat.
Transfer: make another party responsible for the risk (outsourcing, insurance, warranties, bonds, guarantees)
Escalate: remove the threat to the program or portfolio level.
Accept:
- Passive acceptance - do nothing: if it happens: it happens.
- Active acceptance - develop contingency plans in advance.
What are the possible risk response strategies for opportunities?
Exploit: make sure the opportunity occurs
Enhance: increased probability or positive impact of the risk event
Share: allocate full or partial ownership of the opportunity to a third party
Escalate: move the opportunity to the program or portfolio level
Accept: do nothing; If it happens: it happens
What are residual risks?
What are secondary risks?
Residual: risks that remain after risk response planning
Secondary: new risks created by the implementation of risk response strategies
What are contingency plans?
What are fallback plans?
Contingency plans are plans describing the specific action that will be taken if the opportunity or threat occurs.
Fallback plans are actions that will be taken if the contingency plan is not effective.
Who is a risk owner?
Each risk must be assigned to someone who will help lead the development of the risk response and who will be assigned to carry out the risk response or “own” the risk.
