managing risk chapter 7

where are time buffers typically applied

1. activities with severe risks 2. merge activities that are prone to delays 3. noncritical activities to reduce the likelihood that they create another critical path 4. activities that require scarce resources

what happens in the third step of the risk identification process: risk response development

1. develop a strategy to reduce possible damage 2. develop contingency plans

most change managment systems are designed to accomplish____________________________

1. identify proposed changes 2. list expected effects on schedule and budget 3. review, evaluate, and approve/disapprove changes 4. negotiate and resolve conflicts of change 5. communicte changes 6. assign responsibility for implementing change 7. adjust master schedule and budget 8. track all changes

what happens in the fourth step of the risk identification process: risk response control

1. implement risk strategy 2. monitor and adjust plan for new risks 3 change management

how are responses to risks classified

1. mitigating 2. avoiding 3. transferring 4. sharing 5. retaining

in a scenario analysis, team members assess the significance of each risk event in terms of

1. probability of the event 2. impact of the event

these techniques takes a more macro perspective of analyzing risk by looking at overall cost and schedule risks

1. program evaluation and review technique (PERT) 2. PERT simulation

what are the two strategies for mitigaing risk

1. reduce the likelihood that the event will occur 2. reduce the impact that the adverse event would have on the project

what are the steps in the risk management process

1. risk identification 2. risk assessment 3. risk response development 4. risk response control

The risk assessment form contains all of the following except

A) Likelihood of the risk event occurring B) Potential impact of the risk event C) Who will detect the occurrence of the risk event. D) Difficulty of detecting the occurrence of the risk event E) When the risk event may occur C) who will detect the occurrence of the risk event

Change management systems are designed to accomplish all of the following except:

A) Track all changes that are to be implemented B) Review, evaluates, and approve/disapprove proposed changes formally C) Identify expected effects of proposed changes on schedule and budget D) Reflect scope changes in baseline and performance measures E) All of the above are correct E) all of the above

Which of the following is not one of the steps in the risk management process?

A)Risk response development B) Risk assessment C) Risk identification D) Risk tracking E) Risk response control D)risk tracking

All of the following are included in the risk identification process except

Competitors

this analysis extends the risk severity matrix by including ease of detection in an equation

Failure Mode and Effects Analysis (FMEA)

One common mistake made early in the risk identification process is

Focus on objectives and not on the events that could produce consequences.

A risk profile is a list of questions that address traditional areas of uncertainty on a project that answers developed from:

From previous, similar projects

The easiest and most commonly used technique for analyzing risks is _____ analysis.

Impact

The 1999 NASA Mars Climate Orbiter is an example of

Mismanaged risk control

The demolition of the Seattle Kingdome (Snapshot from Practice) is an example of which of the following?

Mitigating

Technical risks are:

Often the kind that can cause the project to be shut down. Problematic

A list of questions that address traditional areas of uncertainty on a project is termed a risk

Profile

Which of the following is not one of the probability analysis tools?

Ratio/range analysis

Detailing all identified risks, including descriptions, category, and probability of occurring, impact, responses, contingency plans, owners and current status is called:

Risk register

what is the difference between a risk response and a contingency plan

a response is part of the actual implementation plan and action is taken before the risk can materialize, while a contingency plan is not part of the initial implementation plan and only goes into effect after the risk is recognized

this response to an opportunity is being willing to take advantage of it if it occures, but not taking action to pursue it

accept

when are management reserves established

after budget reserves are identified and funds established

what happens in the first step of the risk identification process: risk identification

analyze the project to identify sources of risk

what happens in the second step of the risk identification process: risk assessment

assess risks in terms of: 1. severity of impact 2. likelihood of occurring 3. controllability

changing the project plan to eliminate the risk or condition is classifed as which response category

avoiding risk

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

budget reserves

this involves reporting, controlling, and recording changes to the project baseline

change management system

represents actions that will reduce or mitigate the negative impact of the risk event

contingency plan

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

contingency plan

what should a contingency plan include

cost estimate identify the source of funding

does the chance of risk increase or decrease as the project progresses

decreases

when are the chances of a risk event occuring the highest

early stages of project

this response tactic to an opportunity takes action to increase the probability and or the positive impact of an opportunity

enhance

how can managers ensure risk response control

establish an environment in which participants feel comfortable raising concerns and admitting mistakes document responsiblity

this response tactic to an opportunity seeks to eliminate the uncertainty associated with an opportunity to ensure that will definitely happen

exploit

what are the different responses to an opportunity

exploit share enhance accept

what is a classic example of transferring risk

fixed-price contracts that transfer risk from an owner to a contractor insurance

what is the purpose of risk management

identifies as many risk events as possible minimizes their impact manages responses to those events that do materialize provides contingency funds to cover risk events that arize

what is the formula for the failure mode and effects analysis (FMEA)

impact x probability x detection = risk value

examples of threats

inflation market acceptance exchange rates government regulations

how are price risks evaluated on cost sensitive projects

item by item

which projects need some contingency for price changes

long duration projects

what are the reserves needed to cover major unforeseen risks and, hence, are applied to the total project

management reserves

an event that can have a positive impact on project objectives

opportunity

when does the PM initiate the risk management process

planning phase

when the project owner assumes the risk because the chance of such an event occurring is slim refers to which risk response category

retaining risk

An uncertain event or condition that, if it occurs, has a positive or negative effect on a project objectives is termed.

risk

what is a hierarchial depiction of the identifed project risks arranged by risk category and subcategory that identifies the various areas and causes of potential risks

risk breakdown structure (RBS)

what is the list of questions that address traditional areas of uncertainty of a project

risk profile

what details all identified risks, including descriptions, category, and the probability of occurring, impact, responses, contingency plans, owners, and current status

risk register

this provides a basis for prioritizing which risks to address based on their position in the grid

risk severity matrix

what is the easiest and most commonly used technique for analyzing risks

scenario analysis

this response tactic to an opportunity involves allocating some or all of the ownership of an opportunity to another party who is best able to capture said opportunity for the benefit of the project

share

how do PM's crash or reduce the project duration

shortening ore or more activities on the critical path

The cost impact of a risk event occurring as a project proceeds through its life cycle tends to

slowly rise

what types of risks does the risk profile address

technical and managerial

what kind of risks often cause the project to be shut down

technical risks

sources external to the organization are considered

threats

what do managers use to cushion agains potential delays in the project

time buffers

what is one common mistake made early in the risk identification process

to focus on objectives and not on the events that could produce consequences

when is the cost impact the greatest on a project

towards the end

passing risk to another party is classified as which risk response category

transferring risk