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Risk management

Posted: Tue Oct 06, 2015 8:29 pm
by ujjal_show
While planning for a critical project delivery, you want to give yourself a few extra hours from budgeted time for a construction and testing phase to account for problems with unavailability of team resources for any reasons or delays in delivery. This scenario can be BEST described as ___

Padding
Risk acceptance
Reserve time or contingency
Mitigation

Re: Risk management

Posted: Wed Oct 07, 2015 2:01 pm
by coolpmp69
My Answer -Reserve time or contingency

Re: Risk management

Posted: Wed Oct 07, 2015 7:52 pm
by ujjal_show
And why its not Risk acceptance (active) ?

Re: Risk management

Posted: Wed Oct 07, 2015 8:47 pm
by vivek3377
As per PMBOK -
Risk Acceptance is a risk response strategy whereby project team decides to acknowledge the risk and not take any action unless the risk occurs.
It also mentions that The most common active risk acceptance strategy is contingency reserves. So just keep some time, cost or resources buffer to cover for the known risk with unknown response.
If you have 'Contingency Reserves' as option specifically mentioned, then go with that option, rather than a generic 'Risk Acceptance' option.
But I have my doubts about this. How can one estimate the reserves required, if they don't know what has to be done if the risk arises? I mean, how would one estimate that buffer is sufficient to handle the risk contingency or not? Or is it just a certain percentage of time, cost and effort kept aside, and decide on what to do with them when the risk rises? Of course, there will certainly be some ground rules about what percentage can be kept as buffer, but still.... :?

Re: Risk management

Posted: Wed Oct 07, 2015 9:37 pm
by ujjal_show
Yes, you are correct. contingency is more specific.

And risk acceptance /contingency does not mean we didn't done any homework, remember plan risk response done after analysed, prioritized and simulation process. where how much time or cost is require is already been identified in analyzing (Probability-Impact) the risk.

also note acceptance strategy is applied for non critical/ low impact risk, so that is also another way of saying "It already analysed and cost / time impact calculated.

the same logic applied to passive acceptance also.

Re: Risk management

Posted: Thu Oct 08, 2015 3:13 am
by vivek3377
Good point. And low risks are generally added to the watch list, without active risk response planning - apart from contingency planning.
So we mutually enhance our knowledge on this topic by sharing the thoughts on this forum! Really a good avenue to collaborate!
Thanks iZenBridge!