Project Management Chapter 11
risk acceptance
Accepting the consequences if a risk occurs
risk sharing
Allocating ownership of a risk to another party risk tolerance
Delphi technique
An approach used to derive a consensus among a panel of experts to make predictions about future developments
risk
An uncertainty that can have a negative or positive effect on meeting project objectives
risk enhancement
Changing the size of an opportunity by identifying and maximizing key drivers of the positive risk
flowcharts
Diagrams that show how various elements of a system relate to each other
risk exploitation
Doing whatever you can to make sure a positive risk happens
risk avoidance
Eliminating a specific threat or risk, usually by eliminating its causes
management reserves
Funds held for unknown risks
risk-seeking
Having a high tolerance for risk
risk-averse
Having a low tolerance for risk
triggers
Indications for actual risk events
risk factors
Numbers that represent the overall risk of specific events, given their probability of occurring and the consequence to the project if they do occur
fallback plans
Plans developed for risks that have a high impact on meeting project objectives, and implemented if attempts to reduce the risk are not effective
contingency plans
Predefined actions that the project team will take if an identified risk event occurs
runaway projects
Projects that have significant cost or schedule overruns
contingency allowances
Provisions held by the project sponsor or organization to reduce the risk of cost or schedule overruns to an acceptable level; also called contingency reserves
contingency reserves
Provisions held by the project sponsor or organization to reduce the risk of cost or schedule overruns to an acceptable level; also called contingency allowances
risk mitigation
Reducing the impact of a risk event by reducing the probability of its occurrence
a
Risk utility rises at a decreasing rate for a _____ person. a. risk-averse b. risk-neutral c. risk-indifferent d. risk-seeking
secondary risks
Risks that are a direct result of implementing a risk response
unknown risks
Risks that cannot be managed proactively because they have not been identified and analyzed
residual risks
Risks that remain after all of the response strategies have been implemented
known risks
Risks that the project team has identified and analyzed and that can be managed proactively
risk transference
Shifting the consequence of a risk and responsibility for its management to a third party
risk events
Specific uncertain events that may occur to the detriment or enhancement of the project
risk utility
The amount of satisfaction or pleasure received from a potential payoff
risk appetite
The degree of uncertainty an entity is willing to take on in anticipation of a reward
risk tolerance
The maximum acceptable deviation an entity is willing to accept on a project or business objectives as the potential impact
risk owner
The person who will take responsibility for a risk and its associated response strategies and tasks
expected monetary value (EMV)
The product of a risk event probability and the risk event's monetary value
c
Unenforceable conditions or contract clauses and adversarial relations are risk conditions associated with the project _____ management knowledge area. a. human resources b. quality c. procurement d. integration
workarounds
Unplanned responses to risk events when no contingency plans are in place
a
____ applies to positive risks when the project team cannot or chooses not to take any actions toward a risk. a. Risk acceptance b. Risk enhancement c. Risk exploitation d. Risk sharing
d
____ involves prioritizing risks based on their probability and impact of occurrence. a. Identifying risks b. Planning risk responses c. Performing quantitative risk analysis d. Performing qualitative risk analysis
b
____ involves reducing the impact of a risk event by reducing the probability of its occurrence. a. Risk avoidance b. Risk mitigation c. Risk transference d. Risk acceptance
b
____ involves taking steps to enhance opportunities and reduce threats to meeting project objectives. a. Performing qualitative risk analysis b. Planning risk responses c. Performing quantitative risk analysis d. Controlling risk
b
_____ analysis simulates a model's outcome many times to provide a statistical distribution of the calculated results. a. Sensitivity b. Monte Carlo c. Systems d. NPV
a
_____ are unplanned responses to risk events used when project teams do not have contingency plans in place. a. Workarounds b. Triggers c. Contingency plans d. Fallback plans
d
_____ involves changing the size of the opportunity by identifying and maximizing key drivers of the positive risk. a. Risk sharing b. Risk exploitation c. Risk acceptance d. Risk enhancement
b
_____ involves deciding how to approach and plan the risk management activities for the project. a. Performing qualitative risk analysis b. Planning risk management c. Identifying risks d. Performing quantitative risk analysis
d
_____ involves doing whatever you can to make sure the positive risk happens. a. Risk enhancement b. Risk sharing c. Risk acceptance d. Risk exploitation
b
_____ involves numerically estimating the effects of risks on project objectives. a. Performing qualitative risk analysis b. Performing quantitative risk analysis c. Identifying risks d. Planning risk responses
a
_____ is a fact-finding technique that can be used for collecting information in face-to-face, phone, e-mail, or instant-messaging discussions. a. Interviewing b. Monte Carlo analysis c. The Delphi technique d. Brainstorming
c
A _____ is a technique used to show the effects of changing one or more variables on an outcome. a. decision tree b. Monte Carlo analysis c. sensitivity analysis d. systems analysis
risk-neutral
A balance between risk and payoff
influence diagram
A diagram that represents decision problems by displaying essential elements, including decisions, uncertainties, and objectives, and how they influence each other
decision tree
A diagramming analysis technique used to help select the best course of action when future outcomes are uncertain
risk register
A document that contains results of various risk management processes, often displayed in a table or spreadsheet format
interviewing
A fact-finding technique that is normally done face to face, but can also occur through phone calls, e-mail, or instant messaging
risk breakdown structure
A hierarchy of potential risk categories for a project
watch list
A list of risks that have low priority but are still identified as potential risks
probability/impact matrix or chart
A matrix or chart that shows the relative probability of a risk occurring and the relative impact of the risk
risk management plan
A plan that documents the procedures for managing risk throughout a project
Top Ten Risk Item Tracking
A qualitative risk analysis tool for identifying risks and maintaining an awareness of risks throughout the life of a project
Monte Carlo analysis
A risk quantification technique that simulates a model's outcome many times to provide a statistical distribution of the calculated results
brainstorming
A technique by which a group attempts to generate ideas or find a solution for a specific problem by amassing ideas spontaneously and without judgment
sensitivity analysis
A technique used to show the effects of changing one or more variables on an outcome