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What is Risk? Risk MGMT?
The possibility of loss or injury Project risks are uncertainties that can have negative or positive effects on meeting objectives Risk mgmt is a for of insurance. Considered an investment. TERM 2
What is Risk Management? How many runway
projects did NO risk mgmt at all?
DEFINITION 2 the art and science of identifying, assigning and responding to risk throughout the life of a project in order to best meet project objectives Over 55% TERM 3
Which knowledge are is the most neglected?
DEFINITION 3 risk management is the most neglected knowledge area TERM 4
What is Risk
Tolerance?
DEFINITION 4 the amount of utility (satisfaction) received from a potential payoff (stake) TERM 5
Define: 1) Risk Seeking Individual 2) Risk
Neutral Individual 3) Risk Averse Individual
DEFINITION 5 -1) higher tolerance for risk-2) indifferent to risk-3) low tolerance for risk
Certainty Equivalent
The certain amount accepted instead of the bet TERM 7
Risk Premium
DEFINITION 7 the difference of the certainty equivalent and the bet (expected value)RP= EV-CE TERM 8
1) Risk Mgmt Planning
DEFINITION 8 understand the organization's and the sponsor's approach to risk level of detail varies with needs of the project schedule or financial concerns TERM 9
What questions are addressed in risk mgmt
planning?
DEFINITION 9 5 W's who what when why how TERM 10
External Risk
DEFINITION 10 outside of the company's control will the users use the product? are there enough raw materials?
risk identification techniques ( 4)
brainstorming interviewing SWOT analysis risk breakdown structure TERM 17
What is a risk breakdown
structure?
DEFINITION 17 hierarchy of potential risk categories - similar to an org. chart but used to identify and categorize risks TERM 18
Risk Register
DEFINITION 18 tool for documenting potential risk events and related information contains results f various risk mgmt processes. often displayed in a table or spreadsheet TERM 19
Risk Events
DEFINITION 19 specific, uncertain events that may occur to the detriment or enhancement of the project TERM 20
Negative Risk Events
DEFINITION 20 performance failure of a product produced as part of a project delays increase in costs supply shortages strikes
Positive Risk Events
performance success of a product produced as part of a project completing work sooner reduced cost collaboration with supplier to produce better products good publicity from the project TERM 22
The root cause
DEFINITION 22 the real or underlying reason for a problem TERM 23
Triggers
DEFINITION 23 indicators or symptoms of actual risk events TERM 24
3) Qualitative Risk
Analysis
DEFINITION 24 assess the likelihood and impact of identified risks to determine their magnitude and priority TERM 25
Risk qualitative tools and techniques include:
DEFINITION 25 Probability/impact charts top 10 risk item tracking technique- tool for maintaining an awareness of risk throughout the life of a project expert judgement
Workarounds
unplanned responses to risk events that must be done when there are no contingency plans TERM 32
5) Risk Monitoring and Control
DEFINITION 32 main outputs are: requested changes recommend corrective and preventive actions updates to risk register, project plan TERM 33
Project Procurement Mgmt
DEFINITION 33 procurement means: acquiring goods and/or services from an outside source also known as: purchasing outsourcing TERM 34
Why outsource?
DEFINITION 34 reduce costs to allow client org to focus on core business provide flexibility access skills and technology increase/transfer accountability TERM 35
4 procurement processes
DEFINITION 35
- procurement planning- what and when to procure2) conduct procurements- bid solicitation and source selection3) control procurements- managing the relationship with the vendor4) close procurements- completion and settlement of the contract
Make or Buy Analysis
- procurement techniqueestimating the internal costs of providing a product or service, and comparing that estimate to the cost of outsourcing TERM 37
Buy or Lease Analysis
DEFINITION 37 determining whether a particular product or service should be purchased or leased TERM 38
Lease or buy problem
DEFINITION 38 Assume you can lease an item you need for a project for $150/day. to purchase the item the investment cost in $1000 and the daily cost would be another $50/day. how long will it take for the lease cost to eb the same as the purchase cost? (breakeven) if you need the item for 12 days, should you lease ir or purchase it? purchasre=lease 150d=1000 +50d TERM 39
Statement of Work
(SOW)
DEFINITION 39
- description of the work required for the procurementa good SOW gives bidders a better understanding of the buyers expectations TERM 40
Request for Proposal
(RFP)
DEFINITION 40 document used to solicit proposals from perspective suppliers proposal is a document in which sellers describe what they will do to meet the requirements of a buyer
