Chapter 7 Class Activity

MGMT2102 Project Management

 Chapter 7 Class Activity

Risk Management Process

1) Identify Steps in Risk Management Process (p.210)

Answer:

In risk management process, the first step is to identify the risk, analyze the risk which might be

happen in the project. The next step is to assess the risk, what will be the risk impact the project,

what will be likely to be happened, and if the risk can be controlled. After assessed the risk,

should define if there is any solution to reduce the risk happen, and if it does happen, any plans

to resolve the risk. The last step is to implement the risk strategy, monitor and adjust the

contingency plan if need, and apply change management if needed.

Risk Breakdown Structure

1) Describe Risk Breakdown Structure (refer to Figure 7.3 in p.211)

Answer:

Risk breakdown structure is a hierarchical representation of risks, starting from higher levels and

going down to finer level risks, similar to work breakdown structure, as so it could easily identify

any risks will be there in the project.

Risk Profile

1) Describe Risk Profile example in textbook (refer to Figure 7.4 in p.212)

Answer:
A risk profile is a list of questions that address traditional areas of uncertainty on a project. Those

questions can come up from previous experience or project and to list out the problem what need

to be solved.

Risk Assessment

1) Identify at least 3 risk events for a project of your choice and assess the significance of

each risk event in terms of probability of the event and impact of the event (p.212 & 213)

Answer:

The 3 risks might happen for my project would be the set up for the new warehouse, the

transferring cargoes from old warehouse to new warehouse, and the on-time information update

to customers for the new warehouse address and contact. The new warehouse set up would be in

low status of it, as normally this is not a very big issue for doing this set up with professional

team. This is also less important due to the set up can be postponed in case there is anything

happen in between. The cargoes transferring is very high status due to all cargoes are very

important, and if there is any missing cargoes, company need to bear the liabilities. The last one

is to inform customer timely to make sure all customers know the new warehouse and make sure

cargo will deliver to new warehouse. This is moderate status and somehow important as the old

warehouse will be closed done with 1 month after the new warehouse implement.

2) Describe Impact Scales of a risk on a major project (refer to Figure 7.5, p.214)

Answer:
The impact of risk events on different project objectives can be defined in both a qualitative and

quantitative manner. These project objectives are cost, schedule, quality, scope, health, safety,

etc. The Impact scale can vary, but the most common scale is the five-point scale.

3) Describe risk assessment form (refer to Figure 7.6, p.214)

Answer:

The risk assessment form to identify potential risk related to the use of a specific substance and

to list existing control measures to help lower the related risks.

4) Describe Risk Severity Matrix (refer to Figure 7.7, p.215)

Answer:

The risk severity matrix is a chart that plots the severity of an event occurring on one axis, and

the probability of it occurring on the other.

Risk Response Development

Response to risk can be classified as mitigating, avoiding, transferring, and retaining.

1) What are the two strategies for mitigating risk? P.216

Answer:

The two strategies for mitigating risk to reduce the likelihood event would be happened and

reduce the impact to the project.

2) Provide an example for mitigating a risk in the context of a project (p.216)

Answer:
Project delay is always happened in any project, therefore to mitigate the risk, apply trackers to

follow and monitoring the tasks to be completed on time and if anything delay or error, can make

action immediately.

3) What does avoiding a risk mean? Provide an example of risk avoidance risk response in

the context of a project (p.217)

Answer:

Avoiding a risk mean to eliminate the risk by changing the project plan. For example, an investor

found the investment is not profitable or difficult to be success from the financial report of the

investment, then investor decides not to invest it.

4) What does risk transfer mean? Provide an example of risk transfer in the context of a

project (p.217)

Answer:

Risk transfer is a risk management and control strategy that involves the contractual shifting of a

pure risk from one party to another. For example, the purchase of an insurance policy, by which

a specified risk of loss is passed from the policyholder to the insurer.

5) What does risk acceptance (retaining the risk) mean? Provide an example of risk

acceptance in the context of a project (p.218)

Answer:

Risk acceptance allows to accept such known risks and help reflect an accurate security posture

for the stakeholders to make more informed decisions. For example, a manufacturer depends on

a single supplier, however the supplier has shortage of inventory that make the manufacturer
might stop the production and negative impact to the revenue. The manufacturer still accept this

risk due they have long term relationship with the supplier.

Contingency Planning

1) Describe Contingency Plan (p.219)

Answer:

Contingency plan is a plan for the possible foreseen risk which might come true and what to do

once the risk comes. It will reduce or minimize the impact of the risk. Also once the risk come,

the contingency can provide the immediately action to the risk.

2) What's the difference between the risk response plan and the contingency plan?

Answer:

Risk response refers to taking action to either reduce the likelihood that a risk will happen or

reduce the impact the risk has on the project. Contingency planning is developing response if the

risk occurs.