Risk Analysis & Value Engineering Flashcards

A P80 confidence level on a cost estimate means:

Answer: There is an 80% probability the actual cost will not exceed this value

P80 (the 80th percentile) means 80% of simulated outcomes fall at or below that cost, leaving a 20% chance of exceeding it.

Which risk identification technique uses anonymous rounds of expert questioning to reach group consensus on risk likelihood?

Answer: Delphi technique

The Delphi technique iteratively collects and refines expert opinions anonymously to reduce bias and reach convergence.

In value engineering, the function 'support weight' for a structural beam is written in what format?

Answer: Verb + noun (active verb + measurable noun)

VE function descriptions always use an active verb combined with a measurable noun to define what the item does.

What is the primary purpose of a pre-mortem analysis in project risk management?

Answer: Proactively identify reasons why the project might fail before it starts

A pre-mortem imagines the project has already failed and works backward to identify potential causes, surfacing risks early.

Which quantitative risk analysis output helps identify the percentage of total risk attributed to each individual risk source?

Answer: Risk contribution analysis

Risk contribution analysis decomposes total project risk variance to show each risk's proportional contribution to overall uncertainty.

A value engineering change proposal (VECP) submitted by a contractor typically results in:

Answer: Shared cost savings between the contractor and owner

VECPs in government contracting typically split net savings between the contractor and the government as an incentive for innovation.

In risk-adjusted cost estimating, the expected cost including contingency is best expressed as:

Answer: Base estimate + EMV of all identified risks

Adding the sum of expected monetary values (probability × impact) for each identified risk to the base estimate yields a risk-adjusted cost.