1UNIT9:RiskManagement2Overview•Thirdofthemostdifficultknowledgeareas–Lackofexperience•Includes–Basicconceptsofprobability–ExpectedMonetaryValue–DecisionTreeAnalysis6RiskManagementRiskinvolves•OpportunityforGain•PotentialforLossExample:Lottery•Bet$1–Couldlosedollar–CouldwinMillions7UtilityTheoryAmeasureofaperson’swillingnesstotakeariskinlightofthelevelsofreward.8UtilityTheoryDonaldTrumpRewardRisk9UtilityTheoryRewardRisk10RiskManagementRiskfactors•Riskevent–MachineBreakdown•AmountatStake–Costtorepair($800)•RiskProbability–Howlikelyisittobreakdown(20%)11RiskManagementRisktypes•BusinessRisk–OpportunityforGain–PotentialforLoss•PureRisk(Insurablerisk)–PotentialforLossonlyPMI:ManageBusinessRiskanddeflectPureRisk223.QualitativeRiskAnalysisAssessingthelikelihoodandimpactofidentifiedrisksandprioritizingthemThisstepisaccomplishedusingsubjectivevaluesonascaleof0to1orvaluesofLow,MediumorHigh.233.QualitativeRiskAnalysisInput•RiskRegisterRiskListRiskARiskBRiskCRiskDRiskERiskFRiskGRiskH243.QualitativeRiskAnalysisTools•RiskProbabilityandImpactAssessment•ProbabilityandImpactMatrix253.QualitativeRiskAnalysisTools•RiskProbabilityandImpactAssessment1..5.00.51ProbabilityImpactRiskListRiskARiskBRiskCRiskDRiskERiskFRiskGRiskH263.QualitativeRiskAnalysisTools•RiskProbabilityandImpactAssessmentRiskListRiskARiskBRiskCRiskDRiskERiskFRiskGRiskH1..5.3.00.2.51AFEDCBHGProbabilityImpact273.QualitativeRiskAnalysisTools•RiskProbabilityandImpactAssessmentRiskListRiskARiskBRiskCRiskDRiskERiskFRiskGRiskH1..5.3.00.2.51AFEDCBHGLOWMEDIUMHIGHImpactProbability283.QualitativeRiskAnalysisTools•RiskProbabilityandImpactAssessmentRiskListRiskARiskBRiskCRiskDRiskERiskFRiskGRiskH1..5.3.00.2.51AFEDCBHGLOWMEDIUMMEDIUMHIGHProbabilityImpact293.QualitativeRiskAnalysisTools•RiskProbabilityandImpactAssessmentRiskListRiskARiskBRiskCRiskDRiskERiskFRiskGRiskH1..5.3.00.2.51AFEDCBHGLOWMEDIUMHIGHProbabilityImpact303.QualitativeRiskAnalysisTools•ProbabilityandImpactMatrixPMBOKpage252RiskListImpa...
