Ch. 11: Managing Project Risk Flashcards Preview

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Flashcards in Ch. 11: Managing Project Risk Deck (44):
1

A risk response appropriate for both positive and negative risks, but often used for smaller risks within a project.

Acceptance

2

A risk response to avoid the risk; sometimes called a workaround.

Avoidance

3

The most common approach to risk identification; usually completed as a project team with subject matter experts to identify the risks within the project.

Brainstorming

4

These risks may have negative or positive outcomes. Examples include using a less experienced worker to complete a task, allowing phases or activities to overlap, or foregoing the expense of formal training for on-the-job
education.

Business risks

5

A ranking approach to identify the probability and impact on a numerical value, from .01 (very low) to 1.0
(certain).

Cardinal scales

6

A quick and cost-effective risk identification approach.

Checklists

7

The consideration of the risk ranking scores that takes into account any bias, the accuracy of the data submitted, and the reliability of the nature submitted.

Data precision

8

A method to determine which of two or more decisions is the best one. The model examines the cost and benefits of each decision's outcome and weighs the probability of success for each of the decisions.

Decision tree

9

An anonymous method of querying experts about foreseeable risks within a project, phase, or
component of a project. The results of the survey are analyzed by a third party, organized, and then circulated to the experts. There can be several rounds of anonymous discussion with the Delphi Technique, without fear of backlash or offending other participants in the process. The goal is to gain consensus on project risks within the project.

Delphi Technique

10

A risk response that attempts to enhance the conditions to ensure that a positive risk event will likely happen.

Enhancing

11

The monetary value of a risk exposure based on the risk's probability and impact in the risk matrix. This approach is typically used in quantitative risk analysis, as it quantifies the risk exposure.

Expected monetary value (EMV)

12

A risk response that takes advantage of the positive risks within a project.

Exploit

13

These risks are outside of the project, but directly affect it—for example, legal issues, labor issues, a shift in project priorities, or weather. "Force majeure" risks call for disaster recovery rather than project management. These are risks caused by earthquakes, tornados, floods, civil unrest, and other disasters.

External risks

14

System or process flow charts show the relationship between components and how the overall process works. These are useful for identifying risks between system components.

Flow charts

15

An influence diagram charts out a decision problem. It identifies all of the elements, variables,
decisions, and objectives and also how each factor may influence another.

Influence diagrams

16

These cause-and-effect diagrams are also called fishbone diagrams and are used to find the root
cause of factors that are causing risks within the project.

Ishikawa diagrams

17

Low-priority risks are identified and assigned to a watch-list for periodic monitoring.

Low-priority risk watchlist

18

A risk response effort to reduce the probability and/or impact of an identified risk in the project.

Mitigation

19

A simulation technique that got its name from the casinos of Monte Carlo, Monaco. The simulation is completed using a computer software program that can simulate a project, using values for all possible
variables, to predict the most likely model.

Monte Carlo technique

20

A ranking approach that identifies and ranks the risks from very high to very unlikely or to some other ordinary value.

Ordinal scales

21

The performing organization can contribute to the project's risks through unreasonable cost, time,
and scope expectations; poor project prioritization; inadequate funding or the disruption of funding; and competition with other projects for internal resources.

Organizational risks

22

A matrix that ranks the probability of a risk event occurring and its impact on the project if
the event does happen; used in qualitative and quantitative risk analyses.

Probability and impact matrix

23

These risks deal with faults in the management of the project: the unsuccessful allocation of
time, resources, and scheduling; unacceptable work results; and poor project management.

Project management risks

24

These risks have only a negative outcome. Examples include loss of life or limb, fire, theft, natural disasters, and the like.

Pure risks

25

This approach "qualifies" the risks that have been identified in the project. Specifically,
qualitative risk analysis examines and prioritizes risks based on their probability of occurring and their impact on the project
should they occur.

Qualitative risk analysis

26

This approach attempts to numerically assess the probability and impact of the identified risks.
It also creates an overall risk score for the project. This method is more in-depth than qualitative risk analysis and relies on several different tools to accomplish its goal.

Quantitative risk analysis

27

An ordinal scale that uses red, amber, and green to capture the probability, impact, and risk score. The first letter of red, amber, and green equate to "RAG" in the system.

RAG rating

28

These are risks that are expected to remain after a risk response.

Residual risks

29

A project risk is an uncertain event or condition that can have a positive or negative impact on the project.

Risk

30

The systematic process of combing through the project, the project plan, the work breakdown
structure, and all supporting documentation to identify as many risks that may affect the project as possible.

Risk identification

31

A project management subsidiary plan that defines how risks will be identified, analyzed, responded to, and monitored within the project. The plan also defines the iterative risk management process that the project is expected to adhere to.

Risk management plan

32

The agreed-upon approach to the management of the project risk processes.

Risk management planning

33

The individuals or entities that are responsible for monitoring and responding to an identified risk within the project.

Risk owners

34

The risk register is a project plan component that contains all of the information related to the risk
management activities. It's updated as risk management activities are conducted to reflect the status, progress, and nature of the project risks.

Risk register

35

An audit to test the validity of the established risk responses.

Risk response audit

36

The level of ownership an individual or entity has over a project risk.

Risk responsibilities

37

The calculated score based on each risk's probability and impact. The approach can be used in both qualitative and quantitative risk matrixes.

Risk score

38

Root cause identification aims to find out why a risk event may be occurring, the causal factors
for the risk events, and then, eventually, how the events can be mitigated or eliminated.

Root cause identification

39

New risks that are created as a result of a risk response.

Secondary risks

40

A quantitative risk analysis tool that examines each risk to determine which one has the largest
impact on the project's success.

Sensitivity analysis

41

A risk response that shares the advantages of a positive risk within a project.

Sharing

42

SWOT analysis is the process of examining the project from the perspective of each characteristic:
strengths, weaknesses, opportunities, and threats.

SWOT analysis

43

Technical risks are associated with new, unproven, or complex technologies being used on the project. Changes to the technology during the project implementation can also be a risk. Quality risks
are the levels set for expectations of impractical quality and performance.

Technical, quality, or performance risks

44

A risk response that transfers the ownership of the risk to another party. Insurance, licensed contractors, or other project teams are good examples of transference. A fee and contractual relationships are typically involved with the
transference of a risk.

Transference