PMP Study - Part 21 - Risk Management Planning

What information is contained in the Project scope statement that is used in the Plan Risk Management process? (4 points)

1) A description of the project's deliverables and objectives 2) Contains clues about how much overall uncertainty the project team will encounter as the project is planned and executed 3) Helps give better understanding to the complexity of the project deliverables which in turn helps the team determine the complexity of the whole risk management effort 4) Lists and describes the specific project constraints and assumptions - these provide clues for potential risks

What key information is contained in the Risk Register? (3 points)

1) A list of all identified risks - as the project progresses, the list increases until it represents all the risks that the project is likely to encounter 2) The results of all the other risk management processes including a description of the risk, what could happen if the risk event occurs, what will cause the risk event and the impact the risk will have 3) Describes potential responses

What are the two measurements types used for rating risks? (2 points)

1) Cardinal Scale - Measures probability from 0.0 - very low - to 1.0 - very high 2) Ordinal scale - Ranges from low to medium to high

How do you reduce uncertainty related to risk events? (3 points)

1) Determine the probability of a risk 2) Identify the possible consequences and impact 3) Identify the potential causes

What is the best way to deal with risks that can't be avoided? (3 points)

1) Develop a response during planning 2) Implement response if the risk event occurs 3) Follow up by asking how effective the planned response was at controlling damage caused by the risk or if the risk posed an opportunity, if the response was effective at maximizing the benefits to the project

What are the key points to successfully managing risks? (3 points)

1) Identify as many risks as possible 2) Understand their likelihood, causes and impacts 3) Plan appropriate responses

What information is contained in the Communications Management Plan that is used in the Plan Risk Management process? (2 points)

1) In general defines the interactions that will occur on the project 2) Identifies who will be available to share information about risks and when

Outline the comparison of ordinal scaling to cardinal scaling for risk impact expressions

1) Low-low = 0.05 2) Low = 0.25 3) Medium = 0.5 4) High = 0.75 5) High-high = 1.0

What risk management processes are included in the Planning process group?

1) Plan Risk Management 2) Identify Risks 3) Perform Qualitative Risk Analysis 4) Perform Quantitative Risk Analysis 5) Plan Risk Responses

In what order do the risk processes happen?

1) Plan Risk Management 2) Identify Risks 3) Perform Qualitative Risk Analysis 4) Perform Quantitative Risk Analysis 5) Plan Risk Responses 6) Monitor & Control Risks - All process orders are flexible depending on project conditions - All process are iterative

What tools & techniques are used during the Plan Risk Management process?

1) Planning meetings & analysis

What are the Inputs to the Plan Risk Management process? (6 points)

1) Project scope statement 2) Cost management plan 3) Schedule management plan 4) Communications management plan 5) Enterprise environmental factors 6) Organisational process assets

Who should attend a risk planning meeting? (5 points)

1) Project team members 2) Stakeholders 3) Functional managers 4) Those who have involvement in the risk management process 5) Those who have useful information related to planning risk management activities

How can you increase the likelihood of a positive outcome for risk events? (3 points)

1) Reducing the probability of negative events and by limiting their impact if they do happen 2) Making a conscious decision to manage risks 3) Being committed to responding proactively to risks

What are the two central roles of risk management?

1) Reducing uncertainty about identified risks 2) Determining appropriate responses for possible risks that cant be avoided

In what way is the Cost Management Plan used in the Plan Risk Management process? (2 points)

1) Sets out the format and establishes the activities and criteria for planning, structuring and controlling the costs of a project 2) Defines how risk budgets, contingencies and management reserves will be reported and accessed

What key information is contained in the Risk Management Plan? (5 points)

1) The methodology, approaches, tools and data sources for risk management 2) The roles and responsibilities of the risk management team 3) The budgeting of resource and cost estimates for risk management, and the protocols for applying the contingency reserve 4) The timing and frequency of risk management activities, and the schedule for applying the contingency reserve 5) The risk categories of the structure that identifies risks to a consistent level of detail

What are the key characteristics of project risks? (5 points)

1) They're events that might happen 2) They have the potential to impact one or more of the project objectives 3) Risks always happen in the future 4) Risks can be both bad and good - risk can be an unexpected event that harms your project or it can be something that offers unexpected benefits 5) Risks can be found throughout the project life-cycle

What are the aims of the Plan Risk Management process? (3 points)

1) To increase the chances of success for the other five management processes 2) To ensure enough resources and time are set aside for risk management activities 3) Enables the project management and the stakeholders to establish an agreed-upon basis for evaluating project risk

Outline the comparison of ordinal scaling to cardinal scaling for risk probability expressions

1) Very unlikely = 0.0 2) Somewhat likely = 0.3 3) May happen = 0.5 4) Likely = 0.7 5) Very likely = 0.9 6) Certain to happen = 1.0

What is the advantage to finding the cause of a specific risk? (2 points)

1) Ways can be found to avoid or mitigate it 2) It's possible to explore why a risk is likely to be realized and why it will have the impact predicted

What are unknown unknowns?

Events that no one identified as risks before they happen often because there is no precedence set for the risk events having occurred in the past or due to a lack of knowledge regarding the activity affected by the risk event e.g. communication breakdowns, natural disasters, power failures

The Risk Register is an Output of what risk process?

Identify Risks

What information is contained in the Schedule Management Plan that is used in the Plan Risk Management process?

It contains directions for reporting and assessing activity duration contingencies

What risk process is not included in the Planning process group?

Monitor & Control Risks

The Risk Management Plan is an Output of what risk process?

Plan Risk Management

What should always be identified as risks?

Project assumptions

How is risk priority calculated in a Probability and Impact Matrix?

Risk Probability x Risk Impact = level of risk priority

What are the key enterprise environmental factors that act as Inputs to the Plan Risk Management process?

Risk attitudes and tolerances that demonstrate the degree of risk an organization is willing to endure

What are known unknowns?

Risks that can be predicted and therefore mitigated against and can often be identified early in the project based on events that have occurred in similar past projects or can be common sense predictions about what can go wrong e.g. client changes to the scope or budget overruns

What is the Output of the Plan Risk Management process and it's contents?

The Risk Management Plan which contains the following information - Risk methodologies - Roles & responsibilities - Budgeting - Timing - Reporting formats - Tracking - Risk categories

Define Risk Impact

The amount of danger or opportunity the risk event poses to the project - concerned with the effect the risk event will have on the project's objectives - e.g. meeting the budget, finishing on schedule, satisfying customer expectations

Define Risk Tolerance

The degree of risk that stakeholders are willing to endure before they say that the risk's impact is too severe to be beneficial to the project - if risk tolerance is high, it means that they are risk takers - risk tolerances can change during a project lifecycle

Define Probability as it relates to risk

The likelihood that an event will occur most often expressed as a percentage (%) but sometimes expressed as a number from zero to one

What is the relationship between stakeholder risk tolerance and risk impact thresholds?

The relationship between risk tolerance and definition thresholds is directly proportional - Low risk tolerance = low thresholds for defining risk impact - High risk tolerance = high thresholds for defining risk impact

When considering the impact of a risk you should look at what?

The severity of impact - often rated as low, medium or high based on the impact the risk has on the project's objectives

What is the aim of risk management?

To increase the likelihood of a positive outcome

What should the project team understand in order to effectively rate risk impact?

What constitutes a low, medium and high impact on each of the project's objectives - this is often contained in a table to define how impact should be assessed for each project objective

How does innovation affect risk?

With innovation comes an increase in risk as new things are being tried rather than following an old, well-established path