MGMT 364: CH 7 Review Questions
Project risks can/cannot be eliminated if the project is carefully planned. Explain. -
answer- Project risks cannot be eliminated. It is impossible to be aware of all things that
might happen when a project is being implemented. Undesirable events identified
before the project begins can be transferred, retained/reduced, or shared. Contingency
plans with trigger points and responsibility should be established before the project
begins.
The chances of risk events occurring and their respective costs increasing change over
the project life cycle. What is the significance of this phenomenon to a project manager?
-answer- The chances of risk events and estimated costs changing over the project life
cycle are high. These events will impact project change control mechanisms. Moreover,
such changes could be significant enough to require changes in scope. The project
manager must ensure that these changes are recorded and kept updated. Otherwise,
the integrity of the project control system will quickly deteriorate and become useless as
a management tool.
What is the difference between avoiding a risk and accepting a risk? -answer- Avoiding
a risk is changing the project plan in advance so as to eliminate specific risks from
occurring while accepting a risk means no preventive action is taken; contingency plans
may be used if the risk materializes.
What is the difference between mitigating a risk and contingency planning? -answer-
Mitigating a risk refers to taking action to either reduce the likelihood that a risk will
happen and/or reduce the impact the risk has on the project. Contingency planning is
developing a response if the risk occurs. Mitigating is preventive while contingency is
reactive.
Explain the difference between budget reserves and management reserves. -answer-
Budget reserves are established to cover identified risks that occur while implementing
a project work package or activity. If the risk does not materialize, the funds are
removed from the budget reserve. The management reserve covers unforeseen risks
and applies to the total project. The reserves are usually controlled by top management,
the owner, and/or the project manager. Budget and management reserves are
independent of each other.
How are the work breakdown structure and change control connected? -answer- The
WBS and change control are directly linked. Any change from the baseline developed
from the WBS needs to be recorded. The link allows management to trace changes and
problems directly to deliverables and the organization unit responsible.
What are the likely outcomes if a change control process is not used? Why? -answer- If
a change control process is not used, budgets and plans will self-destruct quickly.
Project risks can/cannot be eliminated if the project is carefully planned. Explain. -
answer- Project risks cannot be eliminated. It is impossible to be aware of all things that
might happen when a project is being implemented. Undesirable events identified
before the project begins can be transferred, retained/reduced, or shared. Contingency
plans with trigger points and responsibility should be established before the project
begins.
The chances of risk events occurring and their respective costs increasing change over
the project life cycle. What is the significance of this phenomenon to a project manager?
-answer- The chances of risk events and estimated costs changing over the project life
cycle are high. These events will impact project change control mechanisms. Moreover,
such changes could be significant enough to require changes in scope. The project
manager must ensure that these changes are recorded and kept updated. Otherwise,
the integrity of the project control system will quickly deteriorate and become useless as
a management tool.
What is the difference between avoiding a risk and accepting a risk? -answer- Avoiding
a risk is changing the project plan in advance so as to eliminate specific risks from
occurring while accepting a risk means no preventive action is taken; contingency plans
may be used if the risk materializes.
What is the difference between mitigating a risk and contingency planning? -answer-
Mitigating a risk refers to taking action to either reduce the likelihood that a risk will
happen and/or reduce the impact the risk has on the project. Contingency planning is
developing a response if the risk occurs. Mitigating is preventive while contingency is
reactive.
Explain the difference between budget reserves and management reserves. -answer-
Budget reserves are established to cover identified risks that occur while implementing
a project work package or activity. If the risk does not materialize, the funds are
removed from the budget reserve. The management reserve covers unforeseen risks
and applies to the total project. The reserves are usually controlled by top management,
the owner, and/or the project manager. Budget and management reserves are
independent of each other.
How are the work breakdown structure and change control connected? -answer- The
WBS and change control are directly linked. Any change from the baseline developed
from the WBS needs to be recorded. The link allows management to trace changes and
problems directly to deliverables and the organization unit responsible.
What are the likely outcomes if a change control process is not used? Why? -answer- If
a change control process is not used, budgets and plans will self-destruct quickly.
