Risk Management Flashcards
What is Risk management
Risk management is a process for identifying and responding to risks associated with the delivery of an objective such as a construction project.
What is a risk event
An event that can be predicted to at least some degree, generally based on historical data experiance
What is an uncertain or unforeseen event
A random event that cannot be predicted
why is Risk Management needed in Construction
- Projects are typically complex, all have time and cost quality targets which must be met
- Risk are present in all projects and surveyors are routinely involved in making decisions which have major impact on risk.
- Risk management cannot eliminate risk, but techniques can be used to reduce the impact of events that may cause failure to reach the desired targets.
It allows for appropriate cost provisions and allowances to be made to best accommodate in the event took place.
What are the stages of Risk management
- Identification
- Analysis
- Response
- Monitor and Control
Can you give some examples of risk in a construction project
External Risks for example include economic uncertainty, legislation changes and government policy.
Site risks such as restricted access, planning difficulties and environmental issues can also be considered as further examples
Construction and delivery risks may include ground conditions, H&S and available recourse
What are the benefits of Risk Management
- Allows you to prepare in the event the risk takes place
- Reduced likelihood of cost and time overruns
- increased confidence in achieving project goals
- The team understands and recognises the use and build up of contingencies
Describe the format of the risk register
- Description of the risk
- (RAG) Score rating on probability of occurrence
- Cost impact of its occurrence
- mitigation techniques/ actions required
- assignment to a party
- Review date
What role does the QS play in Risk Management
The QS can apply monetary value to the risk in the event the risk takes place.
- Contingency funds - assist in setting and managing appropriately
- Risk Analysis - Undertake Risk Analysis to ensure accuracy of funds available
- Estimates - Assist in the decision making process providing estimate with a degree of certainty.
Can Risk be calculated
Risk can be calculated to an extent with suitable provision being made for the risk. However it cannot be calculated exactly otherwise it would not be classified as a risk.
EMV = Expected monetary value
What is Monte Carlo Analysis
It is a computerised analysis which calculates the probability of a risk occurring. It is based on quantitative analysis of risks
it provides you with a range of possible outcomes and probabilities to allow you to consider the likelihood of different scenarios
What is Central limit theorem
for a sufficiently large sample size, the distribution of the sample means will approximate a normal distribution, regardless of the original population’s distribution
What is Risk
Risk is the probability of an outcome having a negative effect on people, systems or assists
What is a hazard
A hazard is something that can cause you harm
What is a conflict of interest
When an individuals personal judgment is compromised leading to not being able to make informed decisions or act impartial.
What different type of conflicts of interest are there
Own conflict
party conflict
confidential information conflict
What types of risk response are there
STARR
- Sharing
- Transfer
- Avoidance
- Reduction
- Reduction
- Retention
What is risk reduction
Where a level of risk is unacceptable and measures need to be taken to reduce it
- redesign and improved VE
- More detailed design or further site investigation
- different materials or engineering services
- Different methods of construction
- Changing project execution plan
- Changing Contract Strategy
What types of risk should be accounted for in a cost plan
Design development risk
Construction Risk
Employer change risk
Employer other risk
What are some examples of employer other risk
- Funding risk
- Employer terminating/postponing the project (Interest)
-Acceleration
What is EMV
Expected Monetary Value: Statistical technique in risk management is used to quantify the risks
How did you manage risk on a project
- Ensure the risk register is prepared as early as possible, informed by all members of the design team
- Each risk has a likelihood and impact and impact score related from 1-5, which helps to calculate the risk score.
- Potential costs are apportioned to each risk
- Risk register is a live document so regularly updated when new information occurs or once a survey has been carried out
