CM 4221 CONSTRUCTION RISK STUDY GUIDE
Risk - Answer -- potential uncertain event that, if it occurs,
results in a positive or negative outcome that is
different from what is planned
-
a measure of probability and magnitude of
achieving or not achieving a defined project goal
Threat - Answer -negative risk effect
opportunity - Answer -positive risk effect
Risk analysis - Answer -Predicting the effects of risky events
on an outcome of interest
Decision analysis - Answer -Deciding upon a course of action
in the face of risk
Uncertainty - Answer --the set of all potential outcomes, both favorable and
unfavorable, within each known risk
- frequency and severity of the occurance and the outcomes that can occur within a
range
Expected Value - Answer -Probability of event times the Impact
of the event
Severity - Answer -what Impact (or outcome) is referred to as
Unit Risk - Answer -probabilities cannot be defined but we know
the frequency (e.g., injuries, defects)
Project risk management - Answer --actively managing risks on your project
- lead by PM
-very proactive task
-continuous
Project team's job in Project risk management - Answer -to proactively prevent
problems rather
than reactively dealing with problems
Risks are best assumed by - Answer -party with the greatest
ability to control the risk
Tools for managing risks - Answer -- Risk management
, - Insurance
- Bonding
- Transfer (contract)
- Safety program/culture
-Quality management
- Contingency
Risk management is not: - Answer --Completing a list
-Running a "Monte Carlo simulation"
- Ponderous and expensive
-Only appropriate to large projects
- A process that drives a project to "bankruptcy"
Formal/structured risk management helps to - Answer --Better understand possible
project outcomes
- Control project outcomes
Risk Management Process - Answer -Step 1: Risk Identification
Step 2: Risk Assessment
Step 3: Risk Response Development
Step 4: Risk Response Control
Risk Identification - Answer -Identify, categorize, and document all risks (and
opportunities) that could affect project
Risk Register - Answer --comprehensive and non‐
overlapping list of risks
-All identified risks are to be entered into the project
risk register
Risk Issues Described in Risk Identification - Answer --Nature of the issue/event
- Possible causes and thus likelihood
- Possible impacts
- Any relationships with other issues
Business Risk - Answer -Chance for profit or loss
Insurable (Pure) Risk - Answer -Chance for loss only (e.g., fire, theft, personal injury)
Internal Risk - Answer -Risk that may affect the project and is in control of the project
manager
External Risk - Answer -Risk that may affect the project but is outside the control of the
project
manager
Risk - Answer -- potential uncertain event that, if it occurs,
results in a positive or negative outcome that is
different from what is planned
-
a measure of probability and magnitude of
achieving or not achieving a defined project goal
Threat - Answer -negative risk effect
opportunity - Answer -positive risk effect
Risk analysis - Answer -Predicting the effects of risky events
on an outcome of interest
Decision analysis - Answer -Deciding upon a course of action
in the face of risk
Uncertainty - Answer --the set of all potential outcomes, both favorable and
unfavorable, within each known risk
- frequency and severity of the occurance and the outcomes that can occur within a
range
Expected Value - Answer -Probability of event times the Impact
of the event
Severity - Answer -what Impact (or outcome) is referred to as
Unit Risk - Answer -probabilities cannot be defined but we know
the frequency (e.g., injuries, defects)
Project risk management - Answer --actively managing risks on your project
- lead by PM
-very proactive task
-continuous
Project team's job in Project risk management - Answer -to proactively prevent
problems rather
than reactively dealing with problems
Risks are best assumed by - Answer -party with the greatest
ability to control the risk
Tools for managing risks - Answer -- Risk management
, - Insurance
- Bonding
- Transfer (contract)
- Safety program/culture
-Quality management
- Contingency
Risk management is not: - Answer --Completing a list
-Running a "Monte Carlo simulation"
- Ponderous and expensive
-Only appropriate to large projects
- A process that drives a project to "bankruptcy"
Formal/structured risk management helps to - Answer --Better understand possible
project outcomes
- Control project outcomes
Risk Management Process - Answer -Step 1: Risk Identification
Step 2: Risk Assessment
Step 3: Risk Response Development
Step 4: Risk Response Control
Risk Identification - Answer -Identify, categorize, and document all risks (and
opportunities) that could affect project
Risk Register - Answer --comprehensive and non‐
overlapping list of risks
-All identified risks are to be entered into the project
risk register
Risk Issues Described in Risk Identification - Answer --Nature of the issue/event
- Possible causes and thus likelihood
- Possible impacts
- Any relationships with other issues
Business Risk - Answer -Chance for profit or loss
Insurable (Pure) Risk - Answer -Chance for loss only (e.g., fire, theft, personal injury)
Internal Risk - Answer -Risk that may affect the project and is in control of the project
manager
External Risk - Answer -Risk that may affect the project but is outside the control of the
project
manager
