Technical - Risk Management Flashcards
What is risk in the context of a construction project?
An uncertainty that may have a negative impact on the project.
What is a risk assessment?
Identifying risks, the likelihood of them occurring, their impact and mitigation strategy.
What is a quantified risk assessment?
Assesses risk in terms of financial cost and impact on programme.
What is a qualified risk assessment?
Assesses risk in terms of the likelihood of it happening and how it will impact the project.
What is a Monte Carlo simulation?
Computer software that predicts risk.
What is a risk register?
A collaborative document that lists all the risks identified for the project, the likelihood of them occurring, their impact and mitigation strategy. Can also be quantified to show how much the risk will cost if materialises.
How do you create a risk register for a new project?
All team members come together and list as many risks that they can think of. The Project Manager usually lists them on the document. Everyone then thinks of strategies to limit the impact of the risks.
How do you use the risk register?
Regularly. It should be reviewed during design team and progress meetings, updated and new information added. It should be added to the agenda and reviewed during site meetings.
What is risk allocation?
The risk is allocated to the person in the team best placed to monitor and manage it. Each risk is assigned an owner on the risk register.
What are the risk management strategies?
Avoidance – take action to remove the risk entirely.
Reduction – take action to reduce the impact of the risk.
Transfer – transfer the risk to a third party.
Share – share the risk between parties, usually through the construction contract.
Retention – keep the risk and try and control it. Devote money and resources to monitoring and controlling it.
What are the benefits of risk management?
Identifies what investigations are required.
Helps ensure the budget is robust to deal with risks that can’t be avoided.
Increases the teams understanding of the project.
Can help decide what contract and procurement approach is most suitable.
Why is risk management needed in construction projects?
They’re large and complex with multiple parties. Risk management is a technique that involves everyone to help understand and mitigate risks. It assists with controlling the programme and budget.
What is the purpose of risk management?
To reduce uncertainties to a minimum.
How do you report/ monitor risks?
Risk register – log risks, track them, find ways to reduce or eliminate their impact.
Update it regularly with input from everyone.
What is risk allowance?
A sum of money assigned to a risk to cover the potential expense if the risk materialises. Usually an estimated cost.
