ARM 401 MAIN EXAMINATION SET 2026/2027
QUESTIONS AND SOLUTIONS RATED A+
✔✔Root Cause Analysis - ✔✔-a process that enables the risk management
professional to dig past the obvious causes of an accident to find other factors that
played a role
-harmful events are generally associated with one of three basic causes of loss:
physical, human, or organizational
✔✔Root Causes four basic characteristics - ✔✔1. a root cause is expressed as a
specific underlying cause, not a generalization; something specific
2. a root cause can be reasonably identified
3. a root cause must be expressed as something that can be modified; weather
conditions can't be root causes
4. a root cause is something that can be prevented through effective recommendations
✔✔Steps in root causes analysis process - ✔✔1. collect data
2. chart casual factors: provides the structure to organize and analyze the data gathered
during the investigation; helps identify gaps and deficiencies in knowledge as the
investigation progresses
3. identify the root cause: mapping or flowcharting can help determine the underlying
reasons for each casual factor identified in the previous step
4. determine and implement recommendations
-typically used after an event has occurred, but can be used before to predict
✔✔casual factors - ✔✔-the agents that directly result in one event causing another
-each casual factor is inserted into a root cause map to determine its root cause
-ex: brakes did not "catch", other car enter intersection, truck hit car
✔✔Failure mode and Effects Analysis (FMEA) - ✔✔-orgs use this to try to pinpoint and
thwart potential problems before they arise
-an analysis that reverses the direction of reasoning in fault tree analysis by starting with
causes and branching out to consequences
-org must first identify where the effect occurs in the system being analyzed so FMEA
identifies a system's indenture levels
-ex: concept, design, process, equipment
✔✔failure mode - ✔✔the manner in which a perceived or actual defect in an item,
process, or design occurs
✔✔effect analysis - ✔✔the study of a failure's consequences to determine a risk event's
root cause
✔✔indenture levels - ✔✔-an items relative complexity within an assembly, system, or
function
,-level 1 - system itself
-local effect: a failure mode that affects the level being analyzed produces this
-next-higher-level effect: a failure mode that affects the next-higher level produces this
-end effect: one that affects the highest indenture level produces this
✔✔Steps in the FMEA Process - ✔✔-generally used in the design stage to avoid future
failures and for process control
1. determine scope and objective
2. assemble team
3. define system components and their functions
4. for each component, identify potential causes and effects of failure
5. develop responses to prevent or mitigate failure
✔✔criticality analysis - ✔✔-can follow FMEA
-an analysis that identifies the critical components of a system and ranks the severity of
losing each component
-four categories of failure:
1. failure resulting in excessive unscheduled maintenance
2. failure resulting in delay or loss of operational availability
3. failure resulting in potential mission failure
4. failure resulting in potential loss of life
-categories can bee used either subjectively to establish priorities among hazards and
their controls or objectively to measure how a risk management profession can alter the
expected criticality of a system failure
-way to perform this is calculating a risk priority number for each identified failure
✔✔Risk Priority Number - ✔✔-the product of rankings for consequence, occurrence,
and detection used to identify critical failure modes when assessing risk within a design
or process
-consequence rankings (C): rate the severity of the effect of the failure
-occurrence rankings (O): rate the likelihood that the failure will occur
-detection rankings (D): rate the likelihood that the failure will not be detected before it
reaches the customer
-rankings are multiplied; failure with highest RPN is addressed first, although it may not
always be the most critical
-general rule: any RPN with a high C-value should be given top priority; any CxO combo
that results in a high number is given next priority
✔✔FMEA Advantages - ✔✔-widely applicable
-can reduce costly equipment modifications
-can improve the quality, reliability, and safety of a product or process and improve an
org's image and competitiveness
-emphasizes problem prevention by identifying problems early in the process and
eliminating potential failure modes
,✔✔FMEA Disadvantages - ✔✔-when used top-down, may only identify major failure
modes in a system
-can be difficult and tedious to analyze complex multilayered systems
-might be better used to complement another type of analysis
✔✔Fault Tree Analysis - ✔✔-an analysis that takes a particular system failure and
traces the events leading to the system failure backwards in time
-no known causes
-an examination of the conditions surrounding a risk event that moves from the general
circumstances of the event to more specific ones
-identifies possible ways to "break" the fault tree, or interrupt the sequence of events
that led to the system failure
-needs to be as complete and accurate as possible to encourage sound loss control
decisions
✔✔Fault Tree Analysis Steps - ✔✔-harmful event is placed at the top of the chart and
the events that are necessary to produce it appear as branches connected by and and
or gates
-"and": indicates that event A can occur only if all four events in the rectangles
connected by solid lines occur first
-"or": any one of the events leading to the gate is sufficient to cause that event
-to break a fault tree at an "or" gate, none of the events below the gate can be allowed
to occur
-you can add probabilities
-"and" probability: multiply all the probabilities in the and sequence
-"or" probability: p(H)+p(I) - p(H x I)
✔✔Fault Tree Analysis Assumptions - ✔✔-all components exist in only one of two
conditions - success or failure
-any system component's failure is independent of any other component's failure
-each failure has an unchanging probability of occurrence
✔✔Fault Tree Analysis Limitations - ✔✔-if a high degree of certainty doesn't exist
concerning the probabilities of the underlying or base events, the prob of the top event
may also be uncertain
-important pathways to the top event might not be explored if all casual events are not
included in the fault tree
-static so may need to be reconstructed if anything changes
-human error is difficult to represent in a fault tree
-domino effects are not easily included in a fault tree
✔✔5 Whys - ✔✔-drills down to the originating caused of a risk event by asking why an
accident occurred, why the circumstance occurred, and on and on
-then create a fishbone diagram to map it out
-used mainly for problem involving human factors
, ✔✔5 Whys Advantages - ✔✔-can determine the root cause of a problem
-when several root causes are found, it can determine the relationship among them
-usually doesn't require statistical analysis or data collection
✔✔5 Whys disadvantages - ✔✔-often stopped after the first determination rather than
ask additional questions to discover a problem's root cause
-tend to focus on only one answer to each question
-orgs sometimes don't help the investigator ask the right why questions
-an uninformed investigator can't ask the right questions
-different investigators will discover different causes for the same problem
✔✔Fishbone diagram - ✔✔-5 whys analysis is the most prevalent method for generating
the specific caused in a fishbone diagram
-causes are diagonal lines connected to a horizontal arrow that indicates the problem
being addressed
-most frequently depict industry-specific and process-specific causes
-ex: 6 Ms used for manufacturing
✔✔steps in fishbone diagram - ✔✔1. team agrees on problem statement
2. facilitator writes it on the far right hand side of diagram and draws arrow that points to
it
3. team brainstorms the major categories of causes of the problem
4. facilitator depicts the categories of causes as branches emanating from the main
arrow
5. team members brainstorm possible specific causes of the problem, using technique
such as 5 whys
6. facilitator writes each cause as a branch from the appropriate category
7. facilitator writes subcauses as branches from the causes
8. focus on areas of diagram with fewest ideas before moving to final step
9. once team determines root cause, remedies are developed and implemented to
prevent recurrence of the problem described in the original statement
✔✔probability analysis - ✔✔technique for forecasting events such as accidental and
business losses, on the assumption that they are governed by an unchanging
probability distribution
✔✔probability distribution - ✔✔-A presentation of probability estimates of a particular set
of circumstances and of the probability of each possible outcome
-properly constructed if outcomes are both mutually exclusive and collectively
exhausted (only one can occur at a time and at least one of them will occur)
-collectively exhausted: sum of outcomes probability is 1
-infinite number of outcomes (investment gains or losses): categories (bins) must be
designed so that all outcomes can be included
QUESTIONS AND SOLUTIONS RATED A+
✔✔Root Cause Analysis - ✔✔-a process that enables the risk management
professional to dig past the obvious causes of an accident to find other factors that
played a role
-harmful events are generally associated with one of three basic causes of loss:
physical, human, or organizational
✔✔Root Causes four basic characteristics - ✔✔1. a root cause is expressed as a
specific underlying cause, not a generalization; something specific
2. a root cause can be reasonably identified
3. a root cause must be expressed as something that can be modified; weather
conditions can't be root causes
4. a root cause is something that can be prevented through effective recommendations
✔✔Steps in root causes analysis process - ✔✔1. collect data
2. chart casual factors: provides the structure to organize and analyze the data gathered
during the investigation; helps identify gaps and deficiencies in knowledge as the
investigation progresses
3. identify the root cause: mapping or flowcharting can help determine the underlying
reasons for each casual factor identified in the previous step
4. determine and implement recommendations
-typically used after an event has occurred, but can be used before to predict
✔✔casual factors - ✔✔-the agents that directly result in one event causing another
-each casual factor is inserted into a root cause map to determine its root cause
-ex: brakes did not "catch", other car enter intersection, truck hit car
✔✔Failure mode and Effects Analysis (FMEA) - ✔✔-orgs use this to try to pinpoint and
thwart potential problems before they arise
-an analysis that reverses the direction of reasoning in fault tree analysis by starting with
causes and branching out to consequences
-org must first identify where the effect occurs in the system being analyzed so FMEA
identifies a system's indenture levels
-ex: concept, design, process, equipment
✔✔failure mode - ✔✔the manner in which a perceived or actual defect in an item,
process, or design occurs
✔✔effect analysis - ✔✔the study of a failure's consequences to determine a risk event's
root cause
✔✔indenture levels - ✔✔-an items relative complexity within an assembly, system, or
function
,-level 1 - system itself
-local effect: a failure mode that affects the level being analyzed produces this
-next-higher-level effect: a failure mode that affects the next-higher level produces this
-end effect: one that affects the highest indenture level produces this
✔✔Steps in the FMEA Process - ✔✔-generally used in the design stage to avoid future
failures and for process control
1. determine scope and objective
2. assemble team
3. define system components and their functions
4. for each component, identify potential causes and effects of failure
5. develop responses to prevent or mitigate failure
✔✔criticality analysis - ✔✔-can follow FMEA
-an analysis that identifies the critical components of a system and ranks the severity of
losing each component
-four categories of failure:
1. failure resulting in excessive unscheduled maintenance
2. failure resulting in delay or loss of operational availability
3. failure resulting in potential mission failure
4. failure resulting in potential loss of life
-categories can bee used either subjectively to establish priorities among hazards and
their controls or objectively to measure how a risk management profession can alter the
expected criticality of a system failure
-way to perform this is calculating a risk priority number for each identified failure
✔✔Risk Priority Number - ✔✔-the product of rankings for consequence, occurrence,
and detection used to identify critical failure modes when assessing risk within a design
or process
-consequence rankings (C): rate the severity of the effect of the failure
-occurrence rankings (O): rate the likelihood that the failure will occur
-detection rankings (D): rate the likelihood that the failure will not be detected before it
reaches the customer
-rankings are multiplied; failure with highest RPN is addressed first, although it may not
always be the most critical
-general rule: any RPN with a high C-value should be given top priority; any CxO combo
that results in a high number is given next priority
✔✔FMEA Advantages - ✔✔-widely applicable
-can reduce costly equipment modifications
-can improve the quality, reliability, and safety of a product or process and improve an
org's image and competitiveness
-emphasizes problem prevention by identifying problems early in the process and
eliminating potential failure modes
,✔✔FMEA Disadvantages - ✔✔-when used top-down, may only identify major failure
modes in a system
-can be difficult and tedious to analyze complex multilayered systems
-might be better used to complement another type of analysis
✔✔Fault Tree Analysis - ✔✔-an analysis that takes a particular system failure and
traces the events leading to the system failure backwards in time
-no known causes
-an examination of the conditions surrounding a risk event that moves from the general
circumstances of the event to more specific ones
-identifies possible ways to "break" the fault tree, or interrupt the sequence of events
that led to the system failure
-needs to be as complete and accurate as possible to encourage sound loss control
decisions
✔✔Fault Tree Analysis Steps - ✔✔-harmful event is placed at the top of the chart and
the events that are necessary to produce it appear as branches connected by and and
or gates
-"and": indicates that event A can occur only if all four events in the rectangles
connected by solid lines occur first
-"or": any one of the events leading to the gate is sufficient to cause that event
-to break a fault tree at an "or" gate, none of the events below the gate can be allowed
to occur
-you can add probabilities
-"and" probability: multiply all the probabilities in the and sequence
-"or" probability: p(H)+p(I) - p(H x I)
✔✔Fault Tree Analysis Assumptions - ✔✔-all components exist in only one of two
conditions - success or failure
-any system component's failure is independent of any other component's failure
-each failure has an unchanging probability of occurrence
✔✔Fault Tree Analysis Limitations - ✔✔-if a high degree of certainty doesn't exist
concerning the probabilities of the underlying or base events, the prob of the top event
may also be uncertain
-important pathways to the top event might not be explored if all casual events are not
included in the fault tree
-static so may need to be reconstructed if anything changes
-human error is difficult to represent in a fault tree
-domino effects are not easily included in a fault tree
✔✔5 Whys - ✔✔-drills down to the originating caused of a risk event by asking why an
accident occurred, why the circumstance occurred, and on and on
-then create a fishbone diagram to map it out
-used mainly for problem involving human factors
, ✔✔5 Whys Advantages - ✔✔-can determine the root cause of a problem
-when several root causes are found, it can determine the relationship among them
-usually doesn't require statistical analysis or data collection
✔✔5 Whys disadvantages - ✔✔-often stopped after the first determination rather than
ask additional questions to discover a problem's root cause
-tend to focus on only one answer to each question
-orgs sometimes don't help the investigator ask the right why questions
-an uninformed investigator can't ask the right questions
-different investigators will discover different causes for the same problem
✔✔Fishbone diagram - ✔✔-5 whys analysis is the most prevalent method for generating
the specific caused in a fishbone diagram
-causes are diagonal lines connected to a horizontal arrow that indicates the problem
being addressed
-most frequently depict industry-specific and process-specific causes
-ex: 6 Ms used for manufacturing
✔✔steps in fishbone diagram - ✔✔1. team agrees on problem statement
2. facilitator writes it on the far right hand side of diagram and draws arrow that points to
it
3. team brainstorms the major categories of causes of the problem
4. facilitator depicts the categories of causes as branches emanating from the main
arrow
5. team members brainstorm possible specific causes of the problem, using technique
such as 5 whys
6. facilitator writes each cause as a branch from the appropriate category
7. facilitator writes subcauses as branches from the causes
8. focus on areas of diagram with fewest ideas before moving to final step
9. once team determines root cause, remedies are developed and implemented to
prevent recurrence of the problem described in the original statement
✔✔probability analysis - ✔✔technique for forecasting events such as accidental and
business losses, on the assumption that they are governed by an unchanging
probability distribution
✔✔probability distribution - ✔✔-A presentation of probability estimates of a particular set
of circumstances and of the probability of each possible outcome
-properly constructed if outcomes are both mutually exclusive and collectively
exhausted (only one can occur at a time and at least one of them will occur)
-collectively exhausted: sum of outcomes probability is 1
-infinite number of outcomes (investment gains or losses): categories (bins) must be
designed so that all outcomes can be included
