Chapter 10

Question 1

Framework for risk management- how are risks identified?

Answer 1

They are identified form a wide range of sources, In-house brainstorming and consultation activities, and systematic peer review ( system provided by WBS and looking at time, cost and quality plans)

pp. 245-246

The first element of the framework is risk identification, the process of predicting the key risk outcomes – indicators that something is going wrong in a project. For example, if an interim report is not received from part of the project team, the likelihood is that there are problems with that part of the project. These are identified from a wide range of sources. In addition to in-house brainstorming and consultation activities, it is possible to seek wider opinions from the stakeholder community and other parties with experience of the product or process.

Peer- review may be used but it is messy. To add structure: reference to the WBS provides some further system, and then looking to the time, cost and quality plans for further issues at a detailed level.

Question 2

How are risks quantified?

Answer 2

Estimate likelihood, effects and hideability

“Typically, this will assess the likelihood or probability of that risk occurring, and´its impact or severity.”

pp. 248-249

Question 3

How are risks managed (response control)?

Answer 3

Corrective action (prevention)
Contingencies and reserves (have backup)
Outsourcing risk

pp. 247

Question 4

How is FMEA used?

Answer 4

Estimate severity, hideability and likelihood from a scale 1-10. These are multiplied to give RPN

pp 249

Question 5

What are the main three areas in risk management?

Answer 5

Identification
Quantification
Resonse control

Question 6

What are the nature of risks (types of)?

Answer 6

‘Known knowns’
‘Known unknowns’
‘Unknown unknowns’

Question 7

What are the three Qualitative approaches to risk?

Answer 7

Faliure model effect analysis (FMEA)
Monte Carlo simulation
PERT (Programme Evaluation and Review Technique)

Question 8

What is PERT?

Answer 8

Programme Evaluation and Review Technique. Estimate an optimistic time, most probable time and a pessimistic time. Thereafter distributed to minimize risk.

Question 9

What is the definition of risk?

Answer 9

The possibility of suffering harm or loss

Question 10

What is the Monte Carlo simulation?

Answer 10

Computational algorithms that rely on repeated random sampling to obtain numerical results. Distribution of cost at each activity