Deck 11: Project Risk Management

Question 1

Which of the following is the first step in managing risks (circle one):

A) Include in the budget funds to cover the risks.
B) Identify ways to reduce the risks.
C) Identify the risks.
D) Prepare a contingency plan for every project activity.

Answer 1

Identify the risks.

Question 2

If the risk likelihood is 0.4, the risk impact is 6.0, the risk consequence is (circle one):

A) 6.6
B) 4
C) 2.4
D) None of these

Answer 2

2.4

Question 3

Suppose task B follows task A. The likelihood that a problem will occur with task A is 0.5, and the time to correct the problem would be 2 months. The likelihood that a problem will occur with task B is 0.2, and the time to correct the problem would be 3 months. The risk consequence of both activities combined is (circle one):

A) 3.5 months
B) 5.7 months
C) 1.6 months
D) cannot be determined

Answer 3

1.6 months

Question 4

The concept of project risk is a joint function of (circle all that apply):

A) The longest sequence of activities in the project network.
B) The likelihood that a problematical event will occur.
C) The time a contractor is allowed to respond to the RFP.
D) The impact of the problematical event, if it does occur.

Question 5

Which of the following are sources of internal risks in projects (circle all that apply):

A) The uniqueness of the project.
B) The experience of the project team.
C) Poorly defined customer needs.
D) The level of control exerted by customers and subcontractors over project work
E) The complexity of the end item.

Question 6

Which of the following are common techniques for pinpointing risks in projects (circle all that apply):

A) SOW.
B) Work breakdown structure.
C) Responsibility matrix.
D) Process flowcharts.
E) Documents from prior projects.

Question 7

Risk checklists (circle all that apply):

A) List the factors identified as risks based on experience and common sense.
B) Can be purchased from textbook publishers.
C) Are updated as experience grows.
D) Incorporate the judgement of experienced team members.

Question 8

A cause and effect diagram is ordinarily used to identify (circle all that apply):

A) Potential sources (hazards) for a given risk.
B) A potential risk that might result from a number of hazards.
C) The probability that a risk will occur.

Question 9

Risk likelihood is (circle all that apply):

A) The probability that a risk will occur.
B) Expressed numerically between 0 and 1.0.
C) Of all possible consequences, the percentage that are undesirable.
D) Most often based upon opinions and past experience.

Question 10

When applying a design margin, the target value (circle all that apply):

A) equals the requirement value +/- a safety or buffer amount.
B) is stiffer than the requirement value.
C) is set such that it will be much easier to achieve the requirement value.
D) can be "relaxed" by some amount, and still enable the requirement value to be met.
E) is the same as the requirement value.

Question 11

A system prototype is (circle all that apply):

A) A complete working system that has all of the functional capabilities of the project end-item system.
B) A special font used in project documents.
C) Used for testing and verifying the design of the end-item system.
D) A software package for project planning and budgeting.
E) The final, completed version of the end-item system.

Question 12

Risk management includes (circle all that apply):

A) Setting procedures for accurate, complete project documentation.
B) Establishing good communication so the project manager is kept informed of emerging problems.
C) Establishing reward systems so workers are well paid and motivated.
D) Establishing procedures to continuously monitor risks and updating the risk plan.
E) Setting penalties to ensure that things don't go wrong.

Question 13

Circle all that are true:

A) the MAXIMAX decision criterion leads to selecting the strategy that would maximize the outcome, assuming the best conditions will prevail.
B) the MAXIMIN decision criterion leads to selecting the strategy that would maximize the outcome, assuming the worst conditions prevail.
C) the MINIMAX decision criterion leads to selecting the strategy that would minimize the regret of not having selected the best strategy.
D) the MAXIMUM EXPECTED PAYOFF decision criterion leads to selecting the strategy that would maximize the outcome, assuming all conditions have equal likelihood.

Question 14

Suppose the impact of a risk is judged to be serious, but the likelihood of it happening is judged to be very small; (circle all that apply):

A) If the computed expected value consequence is small, the risk can be ignored.
B) The risk should be taken seriously.
C) If the computed expected value consequence is lower than others in the project, it should be addressed only if time and funds allow.
D) A different opinion should be sought that would yield a reduced or not severe impact.

Question 15

Statement: A project is considered risky only if the likelihood of a very serious event occurring is high.

Question 16

Statement: An "acceptable level of risk" in a project is a matter of judgement.

Question 17

Statement: The analogy technique for identifying risks works best when there is a documented history of previous, similar projects to review.

Question 18

Statement: A risk symptom is a visible, physical sign that a risk is starting to materialize.

Question 19

Statement: A risk in which the expected value consequence is small should be ignored.

Question 20

Statement: The principle of risk transfer uses contractual incentives or penalties to shift the risk from one party to another.

Question 21

Statement: In virtually all projects, both the contractor and the customer are exposed to some form or level of risk, regardless of planning or contractual agreements.

Question 22

Statement: In development projects, attempts to avoid risk will tend to increase the opportunities and payoff.

Question 23

Statement: Projects in which activities are intricately interconnected are inherently less risky than projects wherein activities are independent.

Question 24

Statement: To develop a contingency plan, it is best to wait until a problem develops, then create the plan that best addresses it.

Question 25

Statement: Not every project requires a comprehensive risk analysis and risk management plan.

Question 26

Statement: In general, a larger variance in the estimated duration time or cost for an activity represents greater risk for that activity.

Question 27

Transferring of risk is one of five ways to deal with risk in projects. List THREE others:

Question 28

Match each of the following definition with the correct terms:

-____ A buffer resource for dealing with a risk if it occurs.

A) risk profile
B) risk officer
C) risk reserve
D) risk management plan

Question 29

Match each of the following definition with the correct terms:

-____ Specifies ways to identify and deal with project risks.

A) risk profile
B) risk officer
C) risk reserve
D) risk management plan

Question 30

Match each of the following definition with the correct terms:

-____ Specifies the likelihood, impact, and consequence of each risk.

A) risk profile
B) risk officer
C) risk reserve
D) risk management plan

Question 31

Match each of the following definition with the correct terms:

-____ Oversees identification, assessment, and tracking of all reasons why something might go wrong.

A) risk profile
B) risk officer
C) risk reserve
D) risk management plan