PMP Exam Quiz 04

Risk diagramming techniques may include:
• Cause and effect diagrams
• System or process flow charts
• Influence diagrams

Risk diagramming techniques may include:
• Cause and effect diagrams. These are also known as Ishikawa or fishbone diagrams and are useful for identifying causes of risks.
• System or process flow charts. These show how various elements of a system interrelate and the mechanism of causation.
• Influence diagrams. These are graphical representations of situations showing causal influences, time ordering of events, and other relationships among variables and outcomes.

SWOT Analysis
This technique examines the project from each of the strengths, weaknesses, opportunities, and threats (SWOT) perspectives to increase the breadth of identified risks by including internally generated risks. The technique starts with identification of strengths and weaknesses of the organization, focusing on either the project, organization, or the business area in general.

SWOT Analysis
This technique examines the project from each of the strengths, weaknesses, opportunities, and threats (SWOT) perspectives to increase the breadth of identified risks by including internally generated risks. The technique starts with identification of strengths and weaknesses of the organization, focusing on either the project, organization, or the business area in general. SWOT analysis then identifies any opportunities for the project that arise from organizational strengths, and any threats arising from organizational weaknesses. The analysis also examines the degree to which organizational strengths offset threats, as well as identifying opportunities that may serve to overcome weaknesses.

Risk Register
The primary output from Identify Risks is the initial entry into the risk register. The risk register is a document in which the results of risk analysis and risk response planning are recorded. It contains the outcomes of the other risk management processes as they are conducted, resulting in an increase in the level and type of information contained in the risk register over time.

The risk register is a document in which the results of risk analysis and risk response planning are recorded. It contains the outcomes of the other risk management processes as they are conducted, resulting in an increase in the level and type of information contained in the risk register over time. The preparation of the risk register begins in the Identify Risks process and then becomes available to other project management and risk management processes.

Perform Qualitative Risk Analysis is the process of prioritizing risks for further analysis or action by assessing and combining their probability of occurrence and impact. The key benefit of this process is that it enables project managers to reduce the level of uncertainty and to focus on high-priority risks.

Perform Qualitative Risk Analysis is the process of prioritizing risks for further analysis or action by assessing and combining their probability of occurrence and impact. The key benefit of this process is that it enables project managers to reduce the level of uncertainty and to focus on high-priority risks. Perform Qualitative Risk Analysis is usually a rapid and cost-effective means of establishing priorities for Plan Risk Responses and lays the foundation for Perform Quantitative Risk Analysis, if required. The Perform Qualitative Risk Analysis process is performed regularly throughout the project life cycle, as defined in the project’s risk management plan. This process can lead into Perform Quantitative Risk Analysis or directly into Plan Risk Responses.

Perform Qualitative Risk Analysis: Inputs
1. Risk Management Plan
2. Scope Baseline
3. Risk Register
4. Enterprise Environmental Factors
5. Organizational Process Assets

Perform Qualitative Risk Analysis: Tools and Techniques
1. Risk Probability and Impact Assessment
2. Probability and Impact Matrix
3. Risk Data Quality Assessment
4. Risk Categorization
5. Risk Urgency Assessment
6. Expert Judgment

Risk probability assessment investigates the likelihood that each specific risk will occur. Risk impact assessment investigates the potential effect on project objective such as schedule, cost, quality, or performance, including both negative effects for threats and positive effects for opportunities.

Risk probability assessment investigates the likelihood that each specific risk will occur. Risk impact assessment investigates the potential effect on project objective such as schedule, cost, quality, or performance, including both negative effects for threats and positive effects for opportunities.

Risk probability assessment investigates the likelihood that each specific risk will occur. Risk impact assessment investigates the potential effect on a project objective such as schedule, cost, quality, or performance, including both negative effects for threats and positive effects for opportunities. The level of probability for each risk and its impact on each objective is evaluated during the interview or meeting. Explanatory detail, including assumptions justifying the levels assigned, are also recorded. Risk probabilities and impacts are rated according to the definitions given in the risk management plan. Risks with low ratings of probability and impact will be included within the risk register as part of the watch list for future monitoring.

Probability and Impact Matrix
Evaluation of each risk’s importance and priority for attention is typically conducted using a look-up table or a probability and impact matrix. Such a matrix specifies combinations of probability and impact that lead to rating the risks as low, moderate, or high priority. Descriptive terms or numeric values can be used depending on organizational preference.

Probability and Impact Matrix
Evaluation of each risk’s importance and priority for attention is typically conducted using a look-up table or a probability and impact matrix. Such a matrix specifies combinations of probability and impact that lead to rating the risks as low, moderate, or high priority. The risk score helps guide risk responses. Threats found in the low-risk (medium gray) zone may not require proactive management action beyond being placed in the risk register as part of the watch list or adding a contingency reserve. Similarly for opportunities, those in the high-risk (dark gray) zone, which may be obtained most easily and offer the greatest benefit, should be targeted first.

Risk data quality assessment is a technique to evaluate the degree to which the data about risks is useful for risk management. It involves examining the degree to which the risk is understood and the accuracy, quality, reliability, and integrity of the data about the risk

Risk data quality assessment is a technique to evaluate the degree to which the data about risks is useful for risk management. It involves examining the degree to which the risk is understood and the accuracy, quality, reliability, and integrity of the data about the risk. The use of low-quality risk data may lead to a qualitative risk analysis of little use to the project. Often, the collection of information about risks is difficult, and consumes more time and resources than originally planned.

Risks to the project can be categorized by sources of risk (e.g., using the RBS), the area of the project affected (e.g., using the WBS), or other useful categories (e.g., project phase) to determine the areas of the project most exposed to the effects of uncertainty. Risks can also be categorized by common root causes. This technique helps determine work packages, activities, project phases or even roles in the project, which can lead to the development of effective risk responses.

Perform Quantitative Risk Analysis is the process of numerically analyzing the effect of identified risks on overall project objectives. The key benefit of this process is that it produces quantitative risk information to support decision making in order to reduce project uncertainty.

Perform Quantitative Risk Analysis is the process of numerically analyzing the effect of identified risks on overall project objectives. The key benefit of this process is that it produces quantitative risk information to support decision making in order to reduce project uncertainty. It is used mostly to evaluate the aggregate effect of all risks affecting the project. In some cases, it may not be possible to execute the Perform Quantitative Risk Analysis process due to lack of sufficient data to develop appropriate models. The project manager should exercise expert judgment to determine the need for and the viability of quantitative risk analysis.

Perform Quantitative Risk Analysis: Inputs
1. Risk Management Plan
2. Cost Management Plan
3. Schedule Management Plan
4. Risk Register
5. Enterprise Environmental Factors
6. Organizational Process Assets

Perform Quantitative Risk Analysis: Tools and Techniques
1. Data Gathering and Representation Techniques
2. Quantitative Risk Analysis and Modeling Techniques
3. Expert Judgment

Sensitivity analysis helps to determine which risks have the most potential impact on the project. It helps to understand how the variations in project’s objectives correlate with variations in different uncertainties.

Sensitivity analysis helps to determine which risks have the most potential impact on the project. It helps to understand how the variations in project’s objectives correlate with variations in different uncertainties. Conversely, it examines the extent to which the uncertainty of each project element affects the objective being studied when all other uncertain elements are held at their baseline values.

One typical display of sensitivity analysis is the tornado diagram, which is useful for comparing relative importance and impact of variables that have a high degree of uncertainty to those that are more stable. The Tornado diagram is also helpful in analyzing risk-taking scenarios enabled on specific risks whose quantitative analysis highlights possible benefits greater than corresponding identified negative impacts.

One typical display of sensitivity analysis is the tornado diagram, which is useful for comparing relative importance and impact of variables that have a high degree of uncertainty to those that are more stable. The Tornado diagram is also helpful in analyzing risk-taking scenarios enabled on specific risks whose quantitative analysis highlights possible benefits greater than corresponding identified negative impacts. A tornado diagram is a special type of bar chart used in sensitivity analysis for comparing the relative importance of the variables. In a tornado diagram, the Y-axis contains each type of uncertainty at base values, and the X-axis contains the spread or correlation of the uncertainty to the studied output.

Expected monetary value (EMV) analysis is a statistical concept that calculates the average outcome when the future includes scenarios that may or may not happen (i.e., analysis under uncertainty). The EMV of opportunities are generally expressed as positive values, while those of threats are expressed as negative values.

Expected monetary value (EMV) analysis is a statistical concept that calculates the average outcome when the future includes scenarios that may or may not happen (i.e., analysis under uncertainty). The EMV of opportunities are generally expressed as positive values, while those of threats are expressed as negative values. EMV requires a risk-neutral assumption— neither risk averse nor risk seeking. EMV for a project is calculated by multiplying the value of each possible outcome by its probability of occurrence and adding the products together.

Modeling and simulation.
A project simulation uses a model that translates the specified detailed uncertainties of the project into their potential impact on project objectives. In a simulation, the project model is computed many times (iterated), with the input values (e.g., cost estimates or activity durations) chosen at random for each iteration from the probability distributions of these variables.

Modeling and simulation.
A project simulation uses a model that translates the specified detailed uncertainties of the project into their potential impact on project objectives. In a simulation, the project model is computed many times (iterated), with the input values (e.g., cost estimates or activity durations) chosen at random for each iteration from the probability distributions of these variables.