1. What are three ways that research can be conducted for risk-related issues, and for each way, briefly describe how it may be done.
Qualitative analysis may be useful as an initial screening to identify if further analyse of risk is required, when the analysis is appropriate for decisions, when numerical data or resources are inadequate.
Semi-quantitative analysis sets values to the risks in order to produce a more expanded ranking scale than that which is usually achievable from qualitative analyse. These values are not the predicted realistic figures calculated in quantitative analysis. It is important that the limitations of this form are recognised and is combined with a formula or explanation.
Quantitative analyse of risks uses numerical values ( as opposed to words)to analyse both the consequence and likelihood of risk. The quality of this analysis is dependent on the data from witch it was initially sourced. The outcomes may be expressed in terms of monetary , technical, or human impact.
2. Fishbone, checklists and brainstorming are both tools that can be used in risk management. Describe each of these and when they would best be used.
Fishbone diagram: Also called a cause and effect diagram. Is a visualization tool for categorizing the potential causes of a problem in order to identify the root causes. It’s ideal to used it when there are many possibilities causing a problem to accur.
Checklists: This risk checklist serves as a thinking tool or discussion prompt to ensure the team has looked at the project and its environment from all angles when they sign off on the risk list. Thorough consideration can help you avoid getting blindsided by foreseeable risks like staffing changes at a critical vendor or shifting regulatory requirements. It’s ideal when we try to identify the risks within a specific context,it is important to interrogate the components as much as possible.
Brainstorming: Is a popular tool that helps generate creative solutions to a problem. Ideal to been used when a solution to a problem cannot be logically deduced ,or the information about the problem is confused.
3. What are the five stages of risk likelihood? Briefly describe each one
Rare: May occur only in exceptional circumstances. Example: death of an employee at work.
Unlikely: Event is unlikely to occur but is possible. Example: employee crashing a company car.
Possible: Event could occur .Example: rain on the day an outdoor event.
Likely: Event likely to occur once or more during the life of the project. Example: first aid injuries.
Frequent: event will occur many times during the life of the project. Example: busy street.
4. List and give an example description for each of the five levels of consequence for risk.
Catastrophic risk: At an individual level, a car accident can be a catastrophe. If you’re a publicly traded company and your stock drops 30 percent in a week, that can be catastrophic. A government that just suffered large economic losses or a high number of fatalities from a disaster, well, that is clearly a catastrophe, too.Multiple injuries.
Major risk: Single stakeholder (breach of licenses,legislation,regulation or mandated standards). Net revenue loss or asset damage (money). Damage reputation at national level.
Minor risk: Breach internal procedures or guidelines.Dammage ($).Adverse news in local media.Penalty on the environment damages.
5. What needs should be considered when treating risk. List and describe three treatments that could be considered.
Avoid the risk: decide not to proceed with the activity likely to generate the risk, where practical. Alternatively, we have to think of another way to reach the same outcome.
Transfer the risk: Be able to shift some responsibility or risk to another party through insurance, outsourcing, joint ventures...