Project Management

Place the following components of the risk response matrix in the correct sequence.

1. Risk event 2. Response 3. Contingency plan 4. Trigger 5. Who is responsible

For a project task, the optimistic activity time is 4 hours, the pessimistic time is 8 hours, and the most likely time is 5 hours. Calculate the weighted average activity time.

5.33 hours Reason: This is (4 + (4×5) + 8)/6 = 5.33, the weighted average using the PERT formula.

For a project task, the optimistic activity time is 3 hours, the pessimistic time is 10 hours, and the most likely time is 7 hours. Calculate the weighted average activity time.

6.8 hours (3 + (4 x 7) + 10)/6 = 6.8 hours

What best describes a contingency fund for a project?

A reserve to manage all known and unknown project risks.

Which of the following pertain to "risk" in the context of project management? (Check all that apply.)

A risk may have a positive impact on project objectives. A risk is an uncertain event or condition. A risk may have a negative impact on project objectives

Where are time buffers typically applied in a project plan?

Activities that merged when they are prone to delays Activities requiring scarce resources Activities with severe risk

What time frames does the statistical methodology in Program Evaluation and Review Technique (PERT) simulation utilize?

Activity optimistic and pessimistic times.

When identifying risk, a team should initially focus on what aspect of risk?

Actual events that increase the risk

Identify the responses to a risk event when the risk has been identified and assessed.

Avoid Transfer Mitigate Retain

____ risk is changing the project plan to eliminate the risk or condition.

Avoiding

Which are appropriate methods for handling technical (project technology related issues) risk?

Back-up or alternate plans. Testing and assessment methods.

Impact × Probability × Detection = ____ ____

Blank 1: Risk Blank 2: Value

One of the keys to success in risk identification is ____ .

Blank 1: attitude OR outlook

Risks can have both ___ and ____ consequences.

Blank 1: positive Blank 2: negative

A ___ ___ details all identified risks, including descriptions, category, probability of occurring, impact, responses, contingency plans, owners, and current status.

Blank 1: risk Blank 2: register

What type of contingency is typically required to manage a "schedule risk", i.e., finishing a project late?

Budget reserves, i.e. cash

Which best describes what is meant by "risk avoidance" in a risk management plan?

Changing the project plan to eliminate a risk condition.

____ funds are established to cover project risks.

Contingency

____ reserves are identified for specific work packages or segments of a project found in the baseline budget or work breakdown structure.

Contingency

____ is reducing the time it takes to complete a project.

Crashing OR Crunching

In a generic project life cycle, which phase(s) has/have the highest probability of risk occurring?

Defining and Planning

In a generic project life cycle, which phase would incur the highest cost if a negative risk event occurs?

Delivering

What is required in order for risk response control to succeed?

Documentation of responsibility

____ risk occurs when the project encounters a threat that is outside the scope of the project or the authority of the project manager.

Escalating

Risk Assessment is the first step in the risk management process. True or false

False

What aspects of project change control are documented within a communication plan at the start of a project?

How stakeholders will be notified of changes. The evaluation/decision making process.

What is key to developing a risk transfer approach to risk management?

Identify and document responsibility for absorbing the impact of the risk occurrence.

____ scales can be a bit more problematic, since adverse risks affect project objectives differently.

Impact

Which aspects of project management require a system/process to track and control change?

Improvements suggested by team members. Project scope. Implementation of contingency plans.

Which methods may be used to transfer risk in a project?

Insurance Fixed price contracts Warranties and/or guarantees

What are the drawbacks in using insurance to transfer risk?

It may be difficult to explain the risk and its consequences to an insurance broker. Insurance is often costly

Which are appropriate methods for handling cost risk?

Item-by-item price risk analysis

Which of the following are used by a risk assessment matrix to prioritize identified risk?

Likelihood Impact

____ reserve funds are needed to cover major unforeseen risks and, hence, are applied to the total project.

Management

____ reserves are set up to cover unidentified risks and are allocated to risks associated with the total project.

Management

Match the type of contingency with the correct definition.

Management ---- Set up to cover unknown/unidentified risks. Time --- Set up to cover identified and/or unknown risks.

Which statements about management reserves are correct?

Management reserves are established after the budget reserves are identified.

Which of the following types of activities might need time buffers?

Merge activities Noncritical activities to reduce the likelihood that they will create another critical path Activities that require scarce resources Activities with severe risks

What are key components of a contingency plan?

Naming a person responsible to execute the plan. Cost estimates in the planning, not execution, phase. Defining the event that will initiate/trigger the plan into action.

When the project encounters a threat that is outside the scope of the project or the authority of the project manager, what should they do?

Notify the appropriate people within the organization

Which are potential impacts given a project with risk responses but no contingency plan?

Panic. Incorrect actions taken. Delayed corrective action.

When assigning responsibility for responding to risk on a work package, which stakeholders should be involved in the decision-making?

Person responsible for risk response Project manager Person responsible for work package

Where in the project life cycle should a project manager begin the risk identification process?

Planning.

In scenario analysis, which of the following is used to assess risk?

Probability of an event Impact of an event

Assessing identified risk is done with respect to what aspect of the project?

Project cost Project timing Project priorities

Risk profiles are generated and maintained usually by who?

Project office

_____ zone risks receive first priority.

Red

Which mitigation strategy is normally first pursued to minimize the cost impact of a risk event occurring?

Reduce likelihood.

What are the potential actions of project funding cuts such as the reduction or elimination of the source of project cash inflow?

Reduce project scope Cancel remainder of the project

Change management systems utilize what process steps?

Reporting. Recording. Controlling.

____ risk occurs when a conscious decision is made to accept the risk of an event occurring.

Retaining

List the steps of risk management in their proper sequence.

Risk Identification Risk Assessment Risk Response Development Risk Response Control

What term is used to describe the documents needed to develop an adequate risk response control plan?

Risk Register.

The sequence of steps in managing opportunities is the same as negative risk, but which step utilizes a different approach?

Risk Response Development.

In addition to the core project team, who should/may participate in identifying risk?

Sponsors Customers Outside vendors/contractors

____ risks are problematic; they can often be the kind that cause the project to be shut down.

Technical

What is the outcome of the statistical methodology used in the Program Evaluation and Review Technique (PERT)?

The likelihood of various project durations

Which statement best defines the methodology for enhancing project opportunities?

The opposite of mitigation, i.e. take actions to increase the probability and/or impact of a positive occurrence.

Which statement best describes the scales used to measure/predict probability, impact, and detection?

They may vary depending on project.

Why is the second step of risk management to assess the risks identified in the first step?

To establish priorities for attention

There are three key reasons risk may be accepted. Match the reason a risk is "accepted," with how that type of risk is handled. Instructions

Too large to be transferred. ----- The project owner assumes the risk of an event occurring Costs are too small to mitigate. ---- The budget reserve absorbs the risks if they materialize. So unlikely it is ignored. --- A cost overrun is accepted should the risk event occur.

Which statement is correct with respect to transferring risk?

Transfer of risk does not change the likelihood or impact.

What is a risk event?

What can go wrong during the project

Which statement best defines the methodology for accepting project opportunities?

When the event occurs, implement increased application of resources, but don't expend any pursuing it.

Which source(s) of project information must be reviewed and, if necessary, updated/changed upon approval of a change request proposal?

Work Breakdown Structure. Project baseline.

The goal of the failure mode and effects analysis (FMEA) is to prioritize risk by _____.

assigning numerical FMEA rankings

Risk profiles are updated and refined during the post-project ____ .

audit

PERT developers chose an approximation of the ___ distribution to represent activity durations.

beta

Freeway projects can fall short of the original intentions but still add value for each mile completed. This is called being "____"

chunkable OR chunkability

A ____ plan is an alternative plan that will be used if a possible foreseen risk event becomes a reality.

contingency

Contingency reserves ____ as the project progresses.

decrease OR decline

In scenario analysis, the significance of ____ is assessed.

each risk event

Only by focusing on actual ___ can potential solutions be found.

events

A risk breakdown structure should focus on task-level risks during the initial risk identification stage. True or false

false

In general terms, risk mitigation will approach an identified risk by planning to reduce its ___.

impact likelihood

A _____ is the contingency budget set aside to deal with risk events.

management reserve

A giant Popsicle melting faster than expected is an example of ___ risk.

negative

The average project duration follows a ____ distribution.

normal

An ____ is an event that can have a positive impact on project objectives.

opportunity

With PERT, each activity duration can range from an ____ time to a _____ time.

optimistic pessimistic

Projects of long duration need some contingency for ___ changes—which are usually upward.

price

No amount of planning can overcome ___ , or the inability to control chance events.

risk

Risk responses are developed based upon ___.

risk assessment classifications.

The risk management process begins by trying to generate a list of all the possible ___ that could affect the project.

risks

The average project duration is _____.

the sum of all the average activities times along the critical path

Events that are within the project manager's control are called "risks" but to differentiate events that are outside of a project team's control, the term ___ is often used.

threat

The risk breakdown structure is used in conjunction with the ___ to help identify risks.

work breakdown structure

Which of the following is the formula for the standard deviation of an activity when using PERT?

(b−a/6)