Risk Flashcards
(26 cards)
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What is the RICS definition of risk?
An uncertain event or circumstance that, if it occurs, will affect the outcome of a project or programme.
What is an issue, in contrast to a risk?
An issue is an event that is happening now or is almost certain to occur and requires immediate action.
Name the five main response/mitigation strategies for risk.
Avoidance, Reduction, Transfer, Sharing, Retention.
What is risk avoidance?
Eliminating risks with serious consequences by changing the project scope or cancelling the project.
What is risk reduction?
Taking actions to reduce either the likelihood or impact of a risk.
What is risk transfer?
Passing the risk to another party, usually involving a premium.
What is risk sharing?
Splitting a risk between the client and another party.
What is risk retention?
Retaining a risk with an allowance managed by the employer.
What are the five general categories of risk?
Political/business, Benefit, Consequential, Project, Programme.
What are the five NRM1 risk categories?
Design development, Construction, Employer change, Employer other, Residual.
What is a Risk Breakdown Structure (RBS)?
A tool to help identify risk generators in different environments: natural, economic, government, societal, client, construction, project.
List four common risk identification techniques.
Brainstorming, SWOT analysis, Checklists, Root-cause analysis.
What is qualitative risk analysis?
Prioritising risks based on likelihood and impact without quantifying cost.
What scale is often used for likelihood and impact?
Very low, Low, Medium, High, Very high.
What is proximity in risk analysis?
The point in the future when a risk is likely to occur.
What is the Monte Carlo simulation?
A computer-generated model used to simulate risk outcomes.
What is the simple method of risk quantification?
Multiply cost of risk by its probability to get an expected value.
What is the probabilistic method or 3-point estimating?
Applies best, likely, and worst-case scenarios with weighted probabilities.
In traditional procurement, who owns most project risks?
The client/employer.
In design and build, who owns the design and construction risk?
The contractor.
In management contracting, who owns the programme and cost certainty risks?
The client/employer.
What are key outputs of the risk management process?
Risk register, Risk-management plan, Risk-response plan, Risk analysis reports.
