CPM Risk Management & Contingency Planning Flashcards

A Monte Carlo simulation is used in project risk management primarily to:

Answer: Model the range of possible project outcomes based on risk inputs

Monte Carlo simulation runs thousands of iterations using probability distributions to generate a range of possible cost and schedule outcomes for the project.

Which document outlines how risk management activities will be structured and performed throughout the project?

Answer: Risk management plan

The risk management plan defines roles, processes, tools, and thresholds for conducting risk management activities on the project.

Risk appetite in project management refers to:

Answer: The degree of uncertainty an organization is willing to accept

Risk appetite is the degree of uncertainty an organization or stakeholder is willing to accept in pursuit of its objectives, influencing how aggressively risks are managed.

A project manager learns that a vendor is experiencing financial difficulties that could delay deliveries. The BEST immediate action is to:

Answer: Update the risk register and assess contingency options

Updating the risk register and evaluating contingency options ensures the threat is formally tracked and a response plan is ready if the risk materializes.

In risk management, a 'trigger' is best defined as:

Answer: A warning sign that a risk event is about to occur

A risk trigger is an early warning indicator or condition that signals a risk is imminent, prompting the project manager to activate contingency plans.

Which risk response strategy is appropriate for an opportunity (positive risk) when the project team wants to ensure the event definitely occurs?

Answer: Exploit

Exploiting a positive risk involves taking actions to ensure the opportunity is realized, such as assigning the best resources to guarantee it happens.