Week 5 questions–Risk Management

What is Risk?
Risk is a measure of the potential inability to achieve overall program objectives within defined cost, schedule, and technical constraints.
What is Risk Management?
1. PMs perform some form of Risk Management every time a Program Decision is made
2. Dealing with “uncertainty”
– Known Unknowns
• Risk Management techniques are effective
• Planned for, monitored and actively countered
– Unknown Unknowns
• Program can only react
• Risk Management attempts to identify “unk – unks”, thereby effectively moving them to “known – unks”
• Residual “unk – unks” are Risk Management failures
What are the five major phases in the Risk Management process, and what are some activities in each phase? Which phase produces the Risk Management Plan?
What is a Risk Rating Matrix?
The risk matrix is a method used for classifying project risks based on the likelihood of the risk event occurring and the consequence of that risk event occurring. The analysis using the risk matrix results in the classification of the risk event as either low, medium, or high risk.
Name the four Risk Response options?
1. Risk assumption
2. Risk avoidance
3. Risk mitigation
4. Risk transfer
What is risk assumption?
Is the conscious decision of acceptance of the risk event without making any changes to project scope or cost, schedule and performance objectives.
What is risk avoidance?
Involves a change to the project scope – including changes to cost, schedule and performance objectives—as a method of eliminating the root cause or the consequence of the risk event.
What is risk mitigation?
Is a strategy that attempts to reduce the probability or likelihood of the risk event occurring, as well as the impact of that risk event. This risk-response strategy is not focused on eliminating the root cause or a consequence of the risk event, but merely on mitigating or reducing the level of the risk.
What is risk transfer?
Is the process of shifting the risk impact to another party. The purpose of the strategy is to reallocate the risk, along with the responsibility for managing that risk, to another party. Risk-transfer does not eliminate the risk, nor does it reduce the risk event’s likelihood or consequence. Risk transfer merely gives responsibility for managing that risk to another party.