Project Management Chapter 11

What risk response strategies is appropriate for negative risks or threats?

Avoid Transfer Mitigate

Risks that have been identified and may or may not happen are referred to as known unknowns, and a ______ should be established to cover them if they are triggered.

Contingency reserve

Expected Monetary Value (EMV) is commonly used within this type of analysis:

Cost/Benefit

One method of identifying risks is the __________, an information gathering technique used as a way to reach a consensus among experts on a subject, with the experts participating anonymously.

Delphi technique

What are the risk response strategies only for opportunities or positive risks?

Exploit Share Research

(T/F) The cost per risk for risks discovered early in the project is often more than the cost per risk for risks discovered late because there is more opportunity for the risk to impact several dimensions of the project.

F

(T/F) The purpose of risk management is to eliminate all project risk.

F

(T/F) When the impact of an event is negative, it is considered a risk; when the impact is positive, the event is considered an opportunity.

F

A team's attempt to list, on individual sticky notes, all of the possible threats and opportunities that could occur to an upcoming project might be used during the _____________ process.

Identify risks

_______ are risks that can be identified as risk, but the likelihood of their occurrence is unknown.

Known unknown

What describes the appropriate application of Perform Quantitative Risk Analysis in project management?

Large, complex and expensive projects stand to benefit from the additional rigor of quantitative risk analysis techniques. Decision Tree Analysis and Simulation techniques such as Monte Carlo Analysis are examples of useful quantitative risk analysis techniques. Quantitative techniques are used when it is critical to predict the probability of completing a project on time or within budget with confidence.

A SWOT analysis is an information-gathering tool that helps increase the range of identified risks by examining strengths, weaknesses, _______ and threats to a project.

Opportunities

While all projects should use _________ risk analysis, ___________ risk analysis is only used when necessary and on selected risks.

Qualitative, quantitative

While all projects use ____ risk analysis, _____ risk analysis is only used when it is needed and there is sufficient data to develop appropriate models.

Qualitative, quantitative

A ________ presents a hierarchical organization of risks based on categories such as operational, strategic, finance, external, and project management.

Risk Breakdown Structure (RBS)

The Risk Management Plan describes the methodology, roles and responsibilities, budgeting, timing, and risk categories for potential causes of risk. These risk categories can be structured into a hierarchical representation called a(n):

Risk Breakdown Structure (RBS)

The ______ is a living document in which the results of risk analysis and risk response planning are recorded.

Risk register

The primary output of risk identification is the ____________.

Risk register

An analytical technique used to determine the basic underlying source of a variance, a defect, or a risk is called _________.

Root cause analysis

What quantitative risk analysis techniques is used to determine which risks have the most powerful impact on the project, with results displayed in the form of a tornado diagram?

Sensitivity Analysis

_______ is a quantitative what-if risk analysis technique that presents comparative analyses of various desirable outcomes with respect to a financial measure or uncertainty. Tornado diagrams are often used to represent this analysis.

Sensitivity Analysis

_______ is a quantitative risk analysis modeling technique used to help determine which risks have the most powerful impact on the project. Using a tool such as a tornado diagram, it "examines the extent to which the uncertainty of each project element affects the objective being studied when all other uncertain elements are held at their baseline values".

Sensitivity analysis

(T/F) In Agile projects early risk planning, assessment and response planning is done at a high level, and more detailed and timely risk management occurs during the planning of each subsequent iteration, in daily stand-up meetings, and in retrospectives at the end of each iteration.

T

(T/F) In some cases, project teams will elect to reduce a threat to a level that a sponsor and other stakeholders deem acceptable, rather than eliminate it completely.

T

(T/F) Perform Quantitative Risk Analysis is the process of numerically analyzing the effect of identified risks on overall project objectives.

T

(T/F) Risk response strategies such as accept risk and research risk apply to both threats and opportunities.

T

(T/F) Risk response strategy decisions should reflect a thorough understanding of the priorities that key stakeholders have for cost, schedule, scope, and quality.

T

(T/F) The primary questions project teams use in qualitative risk analysis are "how likely is this risk to happen?", and "if it does happen, how big will the impact be?"

T

(T/F) When complete, the risk register presents the results of both qualitative and quantitative risk analysis as well as risk response planning.

T

What describes the activities appropriately performed by the project team during Perform Qualitative Risk Analysis?

Team members assess the probability of occurrence and severity of impact for identified risks.

What describes an appropriate application of Plan Risk Responses in project management?

The expectations of the sponsor and key stakeholders should influence the risk responses that are developed. Often multiple strategies are identified for a single risk. Risk response planning should address both opportunities and threats.

What describes how the team uses a cause-and-effect diagram to support project risk analysis?

The team lists the risk as the "effect" in a box at the head of a fish, then names the big bones.

A (n) __________ is a risk that will have a negative impact on a project objective if it occurs.

Threat

Avoid risk, mitigate risk, accept risk, and ______ are all strategies for responding to negative risks, also known as threats.

Transfer risk

opportunity

a condition or situation favorable to the project, a positive set of circumstances, a positive set of events, a risk that will have a positive impact on project objectives.

threat

a condition or situation unfavorable to the project that presents a negative set of circumstances or events or consequences. A threat also is a risk that will have a negative impact on a project objective if it occurs.

SWOT analysis

a detailed analysis of the project' s and project management' s strengths, weaknesses, opportunities, and threats, might be used.

decision tree analysis

a graphic tool depicting alternative choices as branches, multiple options for each alternative, and evaluating potential outcomes in terms of uncertainty and monetary value.

sensitivity analysis

a quantitative what-if risk analysis technique that presents comparative analyses of various desirable outcomes with respect to a financial measure or uncertainty.

tornado diagram

a special type of bar chart and data where project goals are listed vertically and risk uncertainties are depicted horizontally as probability.

expected monetary value (EMV) analysis

a statistical technique to calculate present value of future outcomes to choose the best alternative. It is generally used for engineering economics and cost-benefit analysis.

failure mode and effect analysis (FEMA)

a step-by-step approach for identifying all possible failures in a design, a manufacturing or assembly process, or a product or service.

simulation

a technique that mimics real situations using uncertainties and assessing their impact on project objectives.

root cause analysis

an analytical technique to ascertain the fundamental or causal reason or reasons that affect one or more variances, defects, or risks.

performing organization

an enterprise whose employees have a direct involvement in executing and completing the project.

risk management plan

an important plan that is integral to the comprehensive project management plan that describes how risks are prioritized, monitored for changing priorities, and how prioritized risk management activities will be planned and performed.

project risk

anything that may impact the project team' s ability to achieve the general project success measures and the specific project stakeholders' priorities.

trigger condition

circumstance under which a risk strategy or risk action will be invoked.

What activities illustrates a risk response strategy designed to research a threat or an opportunity?

construct a prototype to learn more about a candidate solution

Delphi technique

information gathering technique used as a way to reach a consensus among experts on a subject, with the experts participating anonymously in order to avoid groupthink and prejudice.

risk breakdown structure

presents a hierarchical organization of risks based on categories such as operational, strategic, finance, external, and project management.

plan risk management

process of defining how to conduct risk management activities for a project.

plan risk responses

process of developing options and actions to enhance opportunities and to reduce threats to project objectives.

perform quantitative risk analysis

process of numerically analyzing the effect of identified risks on overall project objectives.

What are among the classic risk response strategies?

share a threat

risk register

the document containing the results of the qualitative risk analysis, quantitative risk analysis, and risk response planning. It details all identified risks, including description, category, cause, probability of occurring, impact(s) on objectives, proposed responses, owners, and current status.

identify risks

the process of determining which risks may affect the project and documenting their characteristics.

perform qualitative risk analysis

the process of prioritizing risks for further analysis or action by assessing and combining their probability of occurrence and impact.

What criteria can be used to categorize project risks?

the project objective that may be impacted by the risk (cost, schedule, scope and / or quality) whether the risk is internal or external to the performing organization when it occurs in the project life cycle