PMI Risk Management Professional (PMI-RMP) Study Flashcard

Contingency Planning involves preparing predefined actions and procedures to be followed if identified risks materialize. It ensures that the organization is ready to respond effectively and minimize disruptions.

The Delphi Technique is a structured method for obtaining expert opinions through multiple rounds of questioning. It is used in risk identification to gather insights and reach consensus on potential risks from a panel of experts.

Impact Assessment evaluates the potential effects of a risk event on project objectives. It is crucial for understanding the significance of risks and prioritizing them based on their potential impact.

Risk Appetite is the level of risk an organization is willing to accept in pursuit of its objectives. It reflects the organization’s tolerance for risk and its overall approach to risk-taking.

Risk Exposure is the potential impact of a risk event on project objectives, quantified by multiplying the risk’s probability by its potential impact. It provides a measure of the total risk facing the project.

Risk Identification is the process of determining what risks may affect a project and documenting their characteristics. Techniques include brainstorming sessions and expert interviews.

Risk Management Information System (RMIS) is a software tool used to collect, analyze, and manage risk-related data. Its purpose is to facilitate risk tracking, reporting, and decision-making by providing centralized risk information.

Risk Reporting involves documenting and communicating information about risks and their status to stakeholders. Its purpose is to ensure transparency and keep stakeholders informed about risk management activities and outcomes.

A Risk Response Strategy is a plan of action developed to address identified risks. Common types include risk avoidance, risk mitigation, risk transfer, and risk acceptance.

Risk Aggregation involves combining individual risks to assess their cumulative impact on project objectives. It helps in understanding the overall risk exposure and prioritizing risk response efforts effectively.

Risk Avoidance is a risk response strategy where changes are made to the project plan to eliminate the risk or its impact. For example, changing project scope to avoid a high-risk technology can be considered risk avoidance.

Scenario Planning is a technique for developing and analyzing different possible future scenarios to understand their impact on project objectives. It helps in preparing for various potential outcomes and planning appropriate responses.

Key Risk Indicators (KRIs) are metrics used to signal potential risk events or changes in risk levels. They help in early detection of risks and provide insights into the effectiveness of risk management efforts.

Risk Communication involves sharing information about risks, risk management processes, and risk status with stakeholders. It ensures that all parties are aware of risks and can contribute to effective risk management.

Risk Management Processes involve a series of steps including risk identification, risk assessment, risk response planning, and risk monitoring and control. They ensure systematic and structured management of risks throughout the project lifecycle.

Residual Risk is the remaining risk after implementing risk response strategies and controls. It represents the risk that persists despite the efforts to mitigate or manage it.

Decision Tree Analysis is a graphical representation of decisions and their possible consequences, including risks. It helps in evaluating the potential outcomes of different decision paths and selecting the best course of action.

Monte Carlo Simulation is a technique that uses random sampling and statistical modeling to estimate the probability of different outcomes. It helps in assessing the impact of risk on project objectives and supports decision-making with probabilistic data.

Contingency Reserves are funds or resources set aside to address unforeseen risks or uncertainties. They provide a buffer to handle unexpected events and ensure that the project can continue smoothly despite potential issues.

A Risk Probability and Impact Matrix is a tool used to assess the likelihood of risks occurring and their potential impact on project objectives. It helps prioritize risks based on their severity and probability, aiding in effective risk response planning.

A Risk Register is a comprehensive document that lists all identified risks, their characteristics, and associated information. It plays a critical role in tracking risks, managing responses, and communicating risk status to stakeholders.

Sensitivity Analysis assesses how variations in input variables impact the outcome of a project. It helps in understanding the relationship between variables and identifying which factors contribute most to risk.

Risk Tolerance is the amount of risk an organization is willing to bear, whereas Risk Threshold is the specific point at which risk becomes unacceptable. Risk Threshold is used to trigger risk response actions.

Qualitative Risk Analysis is the process of assessing the impact and likelihood of identified risks using subjective measures. It involves prioritizing risks based on their severity and probability without extensive numerical analysis.

Risk Acceptance is a strategy where an organization decides to accept the risk without taking additional actions. It implies that the risk is deemed acceptable based on its impact and likelihood, and no further mitigation measures are planned.

Risk Impact refers to the potential effect of a risk event on project objectives. It is assessed by evaluating the severity of the risk’s consequences and its influence on project performance, budget, schedule, or scope.

A Risk Management Strategy is a plan that outlines how an organization will manage risks. It includes risk identification, assessment, response planning, and monitoring approaches tailored to achieve the organization’s objectives.

Risk Register Updates involve revising the Risk Register to reflect new risks, changes in risk status, or modifications to risk response plans. They are important for maintaining accurate risk information and ensuring effective risk management.

A Risk Trigger is an event or condition that indicates the occurrence or potential occurrence of a risk. It acts as a warning sign that a risk is becoming more likely or imminent.

A Risk Management Plan typically includes the risk management strategy, risk identification processes, risk assessment procedures, risk response strategies, risk monitoring and control processes, and roles and responsibilities.

Risk Monitoring and Control involves tracking identified risks, reassessing their status, and implementing risk response strategies. It ensures that risks are managed proactively and that any changes in risk conditions are addressed.

Earned Value Management (EVM) is a project management technique for measuring project performance. It is relevant to risk management as it helps in identifying variances from the plan, which can indicate potential risks.

Expert Judgment involves using the knowledge and experience of experts to assess and manage risks. It is applied in risk identification, analysis, and response planning to leverage specialized insights and recommendations.

Failure Mode and Effects Analysis (FMEA) is a systematic approach for identifying potential failure modes, their causes, and effects. It helps in assessing risks and prioritizing actions to prevent or mitigate failures.

Fuzzy Logic is a method of reasoning that deals with approximate values rather than fixed and precise ones. It is used in risk management to handle uncertainty and imprecision in risk assessments and decision-making.

Historical Data Analysis involves reviewing past data and experiences to identify patterns and trends. It is important in risk management for forecasting potential risks and planning responses based on historical insights.

Impact Probability Matrix is a tool that evaluates risks based on their likelihood of occurrence and potential impact. It helps in prioritizing risks by providing a visual representation of their severity and probability.

A Probability-Impact Matrix is a tool used to evaluate and prioritize risks based on their probability of occurrence and potential impact on project objectives. It helps in determining which risks require immediate attention and response.

Quantitative Risk Analysis uses numerical methods and statistical techniques to estimate the probability and impact of risks, while Qualitative Risk Analysis uses subjective measures and descriptive methods. Quantitative analysis provides more precise risk estimates.

Risk Assessment is the process of evaluating the likelihood and impact of identified risks. It involves analyzing risks to determine their significance and prioritize them for appropriate response planning.

Risk Mitigation involves taking actions to reduce the likelihood or impact of a risk, whereas Risk Avoidance seeks to eliminate the risk altogether. Mitigation aims to manage risks within acceptable limits, while avoidance removes the risk by altering the project plan.

Risk Optimization involves balancing risk and reward to achieve the best possible outcome. It contributes to project success by ensuring that risk responses are effective and resources are used efficiently to address risks.

Risk Performance Measurement involves evaluating the effectiveness of risk management strategies and processes. It is important for assessing how well risks are managed, identifying areas for improvement, and ensuring that risk management objectives are achieved.

Risk Response Planning is the process of developing strategies and actions to address identified risks. It involves deciding on the appropriate response to mitigate, transfer, avoid, or accept risks.

Risk Tolerance Threshold is a predefined level of risk at which an organization decides that the risk is unacceptable and requires action. It is used to guide decision-making and trigger risk response actions when the threshold is exceeded.

Risk Tolerance is the degree of risk an organization is willing to accept in pursuit of its objectives. It influences risk management decisions by guiding the acceptable level of risk, determining risk thresholds, and shaping risk response strategies.

Risk Tolerance is the degree of risk an organization is willing to accept. It is used to determine the acceptable level of risk in decision-making and helps in setting risk thresholds and deciding on risk responses.

Risk Transfer involves shifting the responsibility for managing a risk to a third party. This is typically achieved through mechanisms such as insurance, outsourcing, or contractual agreements.

Scenario Analysis involves evaluating different possible future scenarios to understand their impact on project objectives. It helps in planning for various potential outcomes and developing appropriate risk response strategies.

SWOT Analysis is a technique used to identify strengths, weaknesses, opportunities, and threats related to a project or organization. It helps in understanding internal and external factors that could influence risk.

Monte Carlo Simulation is a quantitative risk analysis technique that uses random sampling and statistical modeling to estimate the probability of different outcomes in a project. It helps in assessing the impact of risk on project objectives.

Risk Control measures are actions taken to reduce or eliminate risks. For example, implementing a new quality control process to reduce the likelihood of defects in a manufacturing project.

A Risk Management Framework provides a structured approach to managing risks. It includes policies, procedures, tools, and techniques for risk identification, assessment, response, and monitoring.

A Risk Owner is an individual assigned responsibility for managing a specific risk. Responsibilities include monitoring the risk, implementing response strategies, and reporting on the risk status.

A Risk Register is a document that records all identified risks, their characteristics, and the details of the risk analysis, including risk responses, risk owners, and status updates. It is essential for tracking and managing risks throughout the project lifecycle.

Inherent Risk is the level of risk present before any risk response strategies are applied. Residual Risk is the level of risk that remains after implementing risk responses and controls.

Risk Audits are conducted to evaluate the effectiveness of the risk management processes and strategies. They assess whether risk responses are properly implemented and identify areas for improvement.

Risk Workshops are collaborative sessions where team members and stakeholders identify and analyze risks. They facilitate information sharing, brainstorming, and consensus-building regarding risk management.

The Risk Breakdown Structure (RBS) is a hierarchical framework that categorizes and organizes potential risks by their source or type. It helps in systematically identifying and analyzing risks, improving the management and response planning.

Risk Responses are strategies developed to address identified risks. They involve actions to mitigate, transfer, accept, or avoid risks to minimize their impact on project objectives.