Passing the PMP Exam: How to Take It and Pass It: How to Take It and Pass It

Risk Management Planning is the process of developing an approach and executing risk management activities for a project.

The correct answer is C. Other risk management processes are driven by and dependent on the Risk Management Plan.

Inputs to Project Risk Management Planning

The inputs to Risk Management Planning include:

Environmental factors,

Organizational process assets,

Project Scope Statement, and

Project management plan, as described in earlier sections of this book.

Project Risk Management Planning Tools and Techniques

Meetings for planning and analysis are the primary tools for creating the Risk Management Plan, which is the output of this process. One of the ways that a project team can begin to define the types and sources of risk events is to create a Risk Breakdown Structure (RBS). An example of an RBS is shown in Table 15-1.

The Risk Breakdown Structure is one way to identify risks in a structured manner. It assists the team in conducting a systematic review of risks and development of responses to risks.

The best answer is C. An RBS is optional but may assist the team in identifying risks and opportunities by looking at the sources of risks or the areas where risks may occur.

The Risk Management Plan can include a Probability and/or Impact Matrix for organizing the information that will be used during the Risk Identification process to prioritize and quantify risks, and it may in some cases show opportunities for the project as well. Common information in the matrix includes numerical and/or descriptive definitions of impact, negative and positive, and the probability of occurrence. The combination of probability and impact determines whether a risk is rated high, moderate, or low. These descriptors are rank ordered in a relative scale. Numerical scales can also be used.

The correct answer is D. Relative scales of impact are rank ordered to differentiate risks that require special attention from lesser risks. Numerical scales such as 0.1, 0.5, and 0.9 can also be used to assign values to the impact of the risks.

Outputs of Risk Management Planning

In summary, the Risk Management Plan should describe the entire risk management process, including auditing of the process. It should also define the content and format of the Risk Register, reporting, and risk tracking.

• Methodology Describes how risk management will be done on the project

• Roles and responsibilities Defines the risk management team and their responsibilities for risk management activities

• Budgeting Assigns budget for risk management activities to be included into the project cost baseline (project budget)

• Timing Specifies when and how often the risk management activities appear in the project schedule

• Risk categories Defines types and sources of risks to guide the Risk Identification process

• Definitions Operational definitions for the project team to use to ensure consistency in the assessment of risks and opportunities

• Probability and Impact Matrix Specific combinations of impact and probability, which lead to risk ratings such as high, medium, or low

• Revised thresholds Revised or validated descriptions that trigger taking action; scope, quality, cost, and time thresholds may be different from each other

• Reporting formats How to communicate risk activities and their results

• Tracking How to document risk monitoring and management activities

Table 15-2 shows the operational definitions of Impact on Project Objectives. This creates alignment and improved communication by the team when identifying and analyzing risks.

The Risk Management Plan will be used throughout the life cycle of the project. As the team moves through the subsequent Risk Management Processes, the plan will be revised, updated, and improved.

The correct answer is A. If there is a delay of one week over a 20-week time period, that is the equivalent of a 5% increase. According to the matrix, that is a Low impact to the Time objective of the project.