Risk Analysis Flashcards

A Control Account Manager identifies a supplier delay that could impact a critical milestone. What is the FIRST action the CAM should take?

Answer: Document the risk in the project risk register and assess its probability and impact

Risks must first be documented and assessed before any response or funding action is taken.

In quantitative risk analysis, which technique uses repeated random sampling to model the range of possible cost or schedule outcomes?

Answer: Monte Carlo simulation

Monte Carlo simulation runs thousands of random iterations to produce a probability distribution of outcomes.

Which reserve is controlled at the program level, outside the Performance Measurement Baseline, and used for realized risks within the contract scope?

Answer: Management reserve

Management reserve sits outside the PMB and is released by the program manager for in-scope realized risks.

A risk has a 40% probability of occurring and would cost $200,000 if it occurs. What is its expected monetary value (EMV)?

Answer: $80,000

EMV is probability times impact: 0.40 x $200,000 = $80,000.

A CAM decides to subcontract a high-risk fabrication task to a vendor with proven expertise, shifting the consequence to the vendor. Which risk response strategy is this?

Answer: Transfer

Shifting risk ownership and consequence to a third party, such as through subcontracting or insurance, is risk transfer.

During which recurring EVMS activity is a CAM MOST likely to identify new risks based on cost and schedule variance trends?

Answer: Monthly control account variance analysis

Monthly variance analysis of CV and SV trends is a primary ongoing source of emerging risk identification.

What does a risk's 'trigger' or 'warning indicator' represent?

Answer: An early sign that the risk event is about to occur or has occurred

A trigger is an observable early-warning condition signaling that the risk is materializing.