Risk Flashcards
1
Q
Risk
A
quantifiable = insurable
2
Q
Uncertainty
A
unquantifiable = not insurable
3
Q
Risk=
A
probability of event x magnitude of loss/gain
4
Q
Risk theory
A
- theory of decision making under probabilistic uncertainty
5
Q
Contracts and Risk
A
Lump sum, Measure and Value, Cost reimbursement
6
Q
Lump sum
A
- work is fully defined and capable of quantification
- contractor can assess risk and provide lump sum in advance
- standard form of building contract is an example of lump sum contract
7
Q
Measure and Value
A
- work fully defined but not capable of quantification
- contractor can assess risk but not quote in advance as quantity may change
- contractor can provide a list of works to be defined, can be used to measure amd value the work when completed
8
Q
Cost Reimbursement
A
- work is incapable of definition or quantification in advance
- no contractor can assess the risk
- one solution to complete the work and pay for work on cost reimbursement
- some arrangements made to pay direct cost plus a fee
- cost plus may be fixed or it may be a % of cost
- eg. repair work that is particularlt innovative
