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A Guide to Project Management

Of each project element affects the objective being

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Unformatted text preview: sequences after it has occurred. Mitigation costs should be appropriate, given the likely probability of the risk and its consequences. 142 NAVIGATION LINKS ACROYMNS LIST ACRONYMS LIST ACROYMNS LIST A Guide to the Project Management Body of Knowledge (PMBOK Guide) 2000 Edition 2000 Project Management Institute, Four Campus Boulevard, Newtown Square, PA 19073-3299 USA Frequency Chapter 11--Project Risk Management Risk mitigation may take the form of implementing a new course of action that will reduce the problem--e.g., adopting less complex processes, conducting more seismic or engineering tests, or choosing a more stable seller. It may involve changing conditions so that the probability of the risk occurring is reduced--e.g., adding resources or time to the schedule. It may require prototype development to reduce the risk of scaling up from a bench-scale model. Where it is not possible to reduce probability, a mitigation response might address the risk impact by targeting linkages that determine the severity. For example, designing redundancy into a subsystem may reduce the impact that results from a failure of the original component. .4 Acceptance. This technique indicates that the project team has decided not to change the project plan to deal with a risk or is unable to identify any other suitable response strategy. Active acceptance may include developing a contingency plan to execute, should a risk occur. Passive acceptance requires no action, leaving the project team to deal with the risks as they occur. A contingency plan is applied to identified risks that arise during the project. Developing a contingency plan in advance can greatly reduce the cost of an action should the risk occur. Risk triggers, such as missing intermediate milestones, should be defined and tracked. A fallback plan is developed if the risk has a high impact, or if the selected strategy may not be fully effective. This might include allocation of a contingency amount, development of alternative options, or changing project scope. The most usual risk acceptance response is to establish a contingency allowance, or reserve, including amounts of time, money, or resources to account for known risks. The allowance should be determined by the impacts, computed at an acceptable level of risk exposure, for the risks that have been accepted. A Guide to the A Guide to the Project Project Management Management Body of Body of KnowledgeE L KnowledgeE PL 11.5.3 Outputs from Risk Response Planning .1 Risk response plan. The risk response plan (sometimes called the risk register) should be written to the level of detail at which the actions will be taken. It should include some or all of the following: Identified risks, their descriptions, the area(s) of the project (e.g., WBS element) affected, their causes, and how they may affect project objectives. Risk owners and assigned responsibilities. Results from the qualitative and quantitative risk analysis processes. Agreed responses in...
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