Study Cards - Chapter 11 (more studying needed)

Question 1

Key to understanding risk management

Answer 1

• for the most part it is done poorly on most projects

- it is usually done very poorly on technology projects

Question 2

Risk

Answer 2

• impacts every area of the project management lifecycle and the nine key knowledge areas

Question 3

Risk management includes these processes…

Answer 3

• planning risk management
• identifying risks
• performing qualitative analysis
• performing quantitative analysis
• planning responses
• monitoring and controlling risk

Question 4

Risk is…

Answer 4

• always in the future
• involves uncertainty
• known or unknown
• negative or positive
• considered from the moment the project is conceived
• tolerated differently by different organizations (low/high tolerance)

Question 5

Cost of risk

Answer 5

• like quality, there is a cost to managing risk

- failure to address risk can be much more costly

Question 6

RBS

Answer 6

• Risk breakdown structure

- groups risks by basic themes

Question 7

Risk categories

Answer 7

• can number into the hundreds

- are grouped into five key categories on a software project (Tom DeMarco)

Question 8

Five key risk categories of software projects

Answer 8

• Scope creep
• Inherent schedule flaws
• Employee turnover
• Specification breakdown
• Poor productivity

-Tom DeMarco

Question 9

Identifying risks

Answer 9

• iterative process

- new risks may become apparent as the project evolves

Question 10

Brainstorming

Answer 10

• Focus on quantity
• Withhold criticism
• Welcome unusual ideas
• Combine and improve ideas
• Alex Osborn

Question 11

Delphi Technique

Answer 11

• forecasting method that relies on a panel of independent experts
• participants maintain anonymity
• RAND corporation

Question 12

Root cause analysis

Answer 12

• performed after an event has occured to identify ‘triggers’ which can be used to forecast
• Safety-based RCA (accident)
• Production-based RCA (quality control)
• Process-based RCA (business processes)
• Failure-based RCA (failure analysis)
• Systems-based RCA (amalgamation)

Question 13

RCA techniques

Answer 13

• Kepner-Tregoe
• FMEA
• Pareto Analysis
• Bayesian inference (conditional probability)
• Ishikawa diagram

Question 14

SWOT analysis

Answer 14

• Setup as a grid
• Organizational analysis of Strengths, Weaknesses, Opportunities, Threats
• Albert Humphrey (stanford research)

Question 15

Risk register

Answer 15

• key planning tool for the project

- includes attributes for risks including probability and impact in dolars

Question 16

Risk becomes an issue

Answer 16

• when it has a probability percentage of 70% or greater

Question 17

Qualitative risk analysis

Answer 17

• Only output is to update the risk register

Question 18

Qualitative risk assessment matrix

Answer 18

• offers a summary level of the potential impact of the risk

Question 19

Risk register updates

Answer 19

• Ranking and prioritization of project risks
• Grouping risks by categories
• Risk requiring near-term response
• Risks requiring additional analysis and response
• Low priority risks to monitor
• Look for trends in results

Question 20

Risk register updates are outputs from

Answer 20

• Perform qualitative risk analysis
• Perform quantitative risk analysis
• Plan risk responses
• Monitor & control risks

Question 21

Quantitative risk analysis

Answer 21

• numerical quantification of the effects of identified risks on the project
• involves sophisticated mathematical modeling

Question 22

FMEA

Answer 22

• Failure Modes Effects Analysis
• Severity, Probability, Detectability
• useful for manufactured product or where risk may be undetectable

Question 23

Severity

Answer 23

• Numberic scale for FMEA measure
• No effect (1)
• High hazard (10)

Question 24

Probability

Answer 24

• Numberic scale for FMEA measure
• less than .0007% (1)
• 20% or greater (10)

Question 25

Detectability

Answer 25

- Numberic scale for FMEA measure - highly detectable (1) - completely undetectable (10)

Question 26

RPN

Answer 26

- Risk Priority Number - scale of 1-1000 - Multiply the three FMEA measures (Severity, Probability, Detectability)

Question 27

EMV

Answer 27

- Expecte monetary value | - Multiply the probability of an event by it's impact

Question 28

Monte Carlo Analysis

Answer 28

- mathematical modeling technique - can use PERT or Triangular Distribution - can use hundreds or thousands of data points

Question 29

Decision Tree Analysis

Answer 29

- Form of EMV used for more complex decision making - Decision branches illuminate possible paths forward - Uncertainty branches illuminate the probability of success

Question 30

Risk strategies - negative risks

Answer 30

- Avoid (eliminate) - Transfer (shift) - Mitigate (reduce) - Accept

Question 31

Risk strategies - positive risks

Answer 31

- Exploit (ensure) - Share (transfer) - Enhance (increase probability) - Accept

Question 32

Contingency plans

Answer 32

- developed for a specific risk | - generally developed when you have accepted a risk

Question 33

Residual risk

Answer 33

- risks that remain after a risk response strategy was implemented

Question 34

Secondary risk

Answer 34

- risk that results from implementing a risk response strategy

Question 35

Contingency reserves

Answer 35

- handle the known unknowns | - part of the cost baseline and project budget

Question 36

Management reserves

Answer 36

- handle the unknown unknowns | - part of the project budget

Question 37

Qualitative risk analysis

Answer 37

- risk ranking - group risks by category - risks needing special attention - risks needing near term responses - watchlists of low priority risks - Trends in qualitative risk analysis

Question 38

Quantitative risk analysis

Answer 38

- Probabilistic analysis of project - Probability of meeting cost/time objectives - Prioritized list of quantified risks - Trends in quantitative risk analysis results

Question 39

Monitor and control risks

Answer 39

- performing risk assessments of the project on a regular basis

Question 40

Risk audits

Answer 40

- carried out throughout the project life | - typically conducted by people outside of your immediate organization

Question 41

Risk reviews

Answer 41

- Periodic and scheduled | - Should occur to determine if risk ratings have changed

Question 42

Variance and Trend

Answer 42

- compares planned results to actual results

Question 43

Technical Performance Measurement

Answer 43

- compares technical accomplishments

Question 44

Reserve Analysis

Answer 44

- compares the amount of contingency reserves remaining to the amount of risk remaining - apply only to the specific risks on the project for which they were set aside

Question 45

Workarounds

Answer 45

- employed when no contingency exists | - generally executed on the fly