CAPM Exam - 11.4 Perform Quantitative Risk Analysis

Histogram

Shows the frequency of a particular simulation outcome

Cumulative Probability Distribution (S-Curve)

Shows the probability of achieving any particular outcome

Decision Tree Analysis

A diagramming and calculation technique for evaluating the implications of a chain of multiple options in the presence of uncertainty.

How are decision trees evaluated?

Branches of the tree represent alternative courses of action. The tree is evaluated by calculating the expected monetary value of each branch, allowing the optimal path to be selected.

Perform Quantitative Risk Analysis - Tools and Techniques

Expert judgement, data analysis, data gathering, representations of uncertainty, interpersonal and team skills

Tools and techniques of the Perform Quantitative Risk Analysis process include: - Checklists, damage control reports, standard allowances, and inspection - Contracting, contingency planning, alternative strategies, and insurance - Interviewing, historical results, workarounds, and Risk Analysis development - Expert judgement, data gathering, simulations, and decision tree analysis

Expert judgement, data gathering, simulations, and decision tree analysis

Sensitivity Analysis

Helps determine which individual project risks could have the most impact on project outcomes

All of the following are characteristics of a decision tree EXCEPT: - Uses expected monetary value (EMV) analysis to calculate the expected outcome for scenarios that may or may not happen - It is a risk analysis tool that can be used to create an estimated monetary value from a particular set of decisions - It is a diagramming and calculation technique for evaluating the implications of a chain of multiple options in the presence of uncertainty - It is primarily a qualitative risk analysis technique and is not generally used in quantitative risk analysis

It is primarily a qualitative risk analysis technique and is not generally used in quantitative risk analysis

What is the key benefit of the Perform Quantitative Risk Analysis process?

It quantifies overall project risk exposure, in terms of time, cost, resources, etc., and can provide additional quantitative information to support response planning

During which Project Management Process group does the Perform Quantitative Risk Analysis process occur?

Planning

Tornado Diagram

Presents the calculated correlation coefficient for each element of the quantitative risk analysis model that can influence the project outcome. Items are ordered by descending strength of correlation, giving the typical tornado appearance.

As an output of the Perform Quantitative Risk Analysis, project documents are updated. One such update is: - Direction, resources, and contingency costs - Prioritized list of individual project risks - Checklists, corrective actions, and qualified decision trees - Qualitative analysis of the threats to ignore and opportunities to accept

Prioritized list of individual project risks

Which of the following data analysis techniques helps to determine which individual project risks or other sources of uncertainty have the most potential impact on project outcomes? - Decision tree analysis - Simulations - Sensitivity analysis - Influence diagrams

Sensitivity analysis

Risk Report

The assessment of overall risk exposure is reflected in two measures: chances of project success and degree of variability remaining in the project. Includes S-curves, tornado diagrams, criticality analysis, and narrative interpretation of results.

Simulations

Used to model the combined effects of individual project risks to evaluate their potential impact on achieving project objectives

Which of the following best describes a decision tree? - A diagram that represents a project or situation within the project as a set of entities, outcomes, and influences, together with the relationships between them - A graphical, qualitative risk analysis technique and not generally used in quantitative analysis - Used to support selection of the best of several alternative courses of action - Displays the calculated coefficient for each element of the quantitative risk analysis model

Used to support selection of the best of several alternative courses of action

Perform Quantitative Risk Analysis - Outputs

Project documents updates

Perform Quantitative Risk Analysis - Inputs

Project management plan, project documents, EEFs, OPAs

Influence Diagram

Represents a project or situation as a set of entities, outcomes, and influences with their relationships and effects