TM Ch07 Managing Risk
Chapter 7
Managing risk
Chapter Outline
1. Risk Management Process
2. Step 1: Risk Identification
3. Step 2: Risk Assessment
A. Scenario Analysis
B. Probability Analysis
4. Step 3: Risk Response Development
A. Mitigating Risk
B. Avoiding Risk
C. Transferring Risk
D. Sharing Risk
E. Retaining Risk
5. Contingency Planning
A. Technical Risks
B. Schedule Risks
C. Cost Risks
D. Funding Risks
6. Contingency Funding and Time Buffers
A. Budget Reserves
B. Management Reserves
C. Time Buffers
7. Step 4: Risk Response Control
8. Change Control Management
9. Summary
10. Key Terms
11. Review Questions
12. Exercises
13. Case: Alaska Fly-Fishing Expedition
14. Case: Silver Fiddle Construction
15. Case: Peak LAN Project
16. Case: XSU Spring Concert
17. Appendix 7.1: PERT and PERT simulation
A. PERT—Program Evaluation Review Technique
B. A Hypothetical Example Using the PERT Technique
18. Appendix Case: International Capital, Inc.—Part A
Chapter Objectives
To describe the risk management process
To identify different kinds of risks
To illustrate approaches for risk identification, analysis, and assessment
To suggest approaches for responding to project risks
To propose the use of contingency reserves to cover risk events
To recognize the need for a change control process/system for any size project.
Review Questions
1. Project risks can/cannot be eliminated if the project is carefully planned. Explain.
Project risks cannot be eliminated. It is impossible to be aware of all things that might happen when a project is being implemented. Undesirable events identified before the project begins can be transferred, retained/reduced, or shared. Contingency plans with trigger points and responsibility should be established before the project begins.
2. The chances of risk events occurring and their respective costs increasing change over the project life cycle. What is the significance of this phenomenon to a project manager?
The chances of risk events and
Managing risk
Chapter Outline
1. Risk Management Process
2. Step 1: Risk Identification
3. Step 2: Risk Assessment
A. Scenario Analysis
B. Probability Analysis
4. Step 3: Risk Response Development
A. Mitigating Risk
B. Avoiding Risk
C. Transferring Risk
D. Sharing Risk
E. Retaining Risk
5. Contingency Planning
A. Technical Risks
B. Schedule Risks
C. Cost Risks
D. Funding Risks
6. Contingency Funding and Time Buffers
A. Budget Reserves
B. Management Reserves
C. Time Buffers
7. Step 4: Risk Response Control
8. Change Control Management
9. Summary
10. Key Terms
11. Review Questions
12. Exercises
13. Case: Alaska Fly-Fishing Expedition
14. Case: Silver Fiddle Construction
15. Case: Peak LAN Project
16. Case: XSU Spring Concert
17. Appendix 7.1: PERT and PERT simulation
A. PERT—Program Evaluation Review Technique
B. A Hypothetical Example Using the PERT Technique
18. Appendix Case: International Capital, Inc.—Part A
Chapter Objectives
To describe the risk management process
To identify different kinds of risks
To illustrate approaches for risk identification, analysis, and assessment
To suggest approaches for responding to project risks
To propose the use of contingency reserves to cover risk events
To recognize the need for a change control process/system for any size project.
Review Questions
1. Project risks can/cannot be eliminated if the project is carefully planned. Explain.
Project risks cannot be eliminated. It is impossible to be aware of all things that might happen when a project is being implemented. Undesirable events identified before the project begins can be transferred, retained/reduced, or shared. Contingency plans with trigger points and responsibility should be established before the project begins.
2. The chances of risk events occurring and their respective costs increasing change over the project life cycle. What is the significance of this phenomenon to a project manager?
The chances of risk events and