TIS2101IT PROJECT MANAGEMENT

Lecture Section: TC1V

Tutorial Section: TT1V
Group No: G

Name Student ID Hand Phone

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TUTORIAL-Topic-3:
1. Discuss in detail why risks can have both negative and positive effects on meeting
project objectives.

G11:
Risks can occur for better or for worse. Negative risks are all those possible events
that could harm an organization, where we seek to mitigate, prevent, or reduce the
extent of that harm.

Positive risks, in contrast, are all those events beyond the company’s control that
can help the company, and are generally exploited to reap the benefit to the project.

Beyond the added value of monitoring positive risks, both types of risks have
opposing risk management strategies that can be implemented in your risk
management plan. While a company avoids negative risks by delegating tasks or
rejecting certain agreements with third parties, it exploits positive risks by taking
actions to increase the chances of those uncertain events.

G6:
Risk is an unexpected situation that might or might not happen, it is uncertain
and not guaranteed. In project management, a risk might occur after some changes
or decision-making for the project. As the risk is not guaranteed, it could be negative
or positive.

If the changes bring a good effect and benefit to the project that means positive
risk.
On the other hand, the negative risk is the meaning as people usually first think of the
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word risk, it is the bad unexpectable situation that happened after the decision
making. The risk could happen in any aspect of the project, take profit of
investment as an example. If the profit is more than the investment, it means the
project is earning and is a positive risk. Else, if the profit is lower than the
investment cost, then the negative risk has happened and the project is losing
money.

G10:
Risk is an uncertainty that can have negative or positive effects on meeting the
objectives of the project. The uncertainties can be regarding the schedule, the
costs, or the quality of the end project.

In general, positive risk is something you should always be open to and even enhance
it since it has valuable consequences for your project.

Whereas negative risk is the opposite and the worst case scenario for such risk is the
lack of success in project delivery.

Positive Risks:
● Discuss in detail why risks can have both negative and positive effects on
meeting project objectives.
● You shouldn’t avoid it but enhance and get the most out of it
● Brings a positive outcome and results in project’s success
Negative Risks:
● A threat to the project
● Avoid it and eliminate
● Brings a negative outcome and may result in project’s failure.

2. How utility change for a risk-averse person? Explain in detail.

G9:
Utility rises but at a declining rate for a risk-averse person. When taking a risk,
there is a chance that you can be richer or you can ruin your savings.

A risk-averse person does not want to take that chance of a huge chunk of their
savings vanishing. They would rather have a slow but steady growth over time
and have that stability.

G8: A risk-averse person will experience rises at a decreasing rate for utility.

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A risk-averse person often choose preservation over potential, which explains why
the potential payoff is guaranteed to increase over time but in decreasing rate as it is
not taking any risk to see the potential of higher increase.

G6:

The risk-averse person is the individual that prefers low uncertainty and low risk, and
there is a concave utility function for them. The utility change for a risk-averse
person is when the wealth goes higher, the utility will also get higher. However,
when the wealth or return becomes higher it means that the amount is out of
expectation of a risk-averse person, it will become more uncertain. Therefore, the
utility rise of a risk-averse person will be decreasing and become slower when the
wealth is getting higher.

Can be improved:

Risk Tolerance…..

3. Is it True that one possible response to managing negative risk it to accept the
potential effects from the risk? Elaborate in detail.

G11.

True. Managing negative risks involves a number of possible actions that project
managers can take to avoid, lessen, change, or accept the potential effects of risks on
the projects. In short There are five basic strategies to deal with negative risks or
threats which are Escalate, Avoid, Transfer, Mitigate and Accept. Therefore,
accepting the potential effects from the risk is considered as one possible response
in managing negative risk.

G6:

True.

Accept is one of the response strategies to manage the negative risk. This strategy is
just simply accepting the risk passively and without making a response. On the
other hand, this strategy also could be accepted actively by preparing other
strategies as a backup plan. This strategy is mostly used when the risk is higher
than expected and is out of tolerance. This is because using other strategies to
manage the negative risk might not give much help and is a low effect to resolve the

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negative risk. It is just wasting resources or making worse effects and threats for
the future of the project. So when faced with this kind of situation, acceptance is the
most suitable strategy to manage the negative risk.

Can be improved:

Mohamad Zamfirdaus16:27

when the potential loss is lesser than the money to be spent for warrant the risk

4. Describe the behavior of a risk-seeking person.

G11 :
Risk-seeking describes a person who cannot get enough risk. He or she prefers an
investment with an uncertain outcome rather than one with the same expected
returns and certainty that they will be delivered. Risk-seeking traits are more
commonly found in people who have nothing to lose. Risk-seeking behavior tends
to rise in bull markets, when investors, encouraged by gains in the financial
markets, are coaxed into thinking that the good times will continue. There is always
a subset of risk seekers who orient their strategies around high-risk/high-return
investments.

G10
Those who are risk-seeking have a higher tolerance and preference for risk, and
their satisfaction increases when more payoff is at stake rather than expected
returns and certainty. Risk takers are people are willing to accept greater economic
uncertainty in exchange for the potential of higher returns by using the correct
strategies such as bull investment technique.

5. Can unknown risks be managed proactively? Explain in detail.

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G6:
No.

This is because the unknown risk is more threatening, can't be identified, and is
unexpected. So it is unable to manage proactively under the unknown situation
without any information and out of the planning. These unknown risks should be
managed through a workaround as a temporary fix, it is a response strategy for
unidentified risks and accepts the risk passively until the project team found out a
suitable way to solve the risks.

6. Elaborate in detail the first step in project risk management.

G5:
The first step in project risk management is planning risk management. Planning
risk management is the process of deciding how to approach and plan the risk
management activities for the project.

The main output of this process is a risk management plan which documents the
procedures for managing risk throughout the project. It summarizes how risk
management will be performed on a particular project. The project team should
review project documents as well as corporate risk management policies, risk
categories, lessons-learned reports from past projects, and templates for creating
a risk management plan. Besides, it is also important to review the risk tolerances
of various stakeholders.

In addition to a risk management plan, many projects also include contingency plans,
fallback plans, contingency reserves or allowances, and management reserves.

7. Define “Contingency plans”.

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G5:
Contingency plans are predefined actions that the project team will take if an
identified risk event occurs.

G11:
Contingency plans are predefined actions that the project team will take if an
identified risk event occurs.

Contingency plans can also be referred to as ‘Plan B’ because it can work as an

alternative action if things don’t go as planned. Without having a contingency
plan in place, you don’t have a risk management recovery plan, which reduces
the chances of project success, even if that project plan was made with planning
software.

8. Discuss “Brainstorming’ in detail.

G8:
Brainstorming is one of the technique for identifying risks.
It is done in a group to attempt to generate ideas/solution for specific problem
spontaneously. It can be done by non-expert but an experienced facilitator should
run the brainstorming session.

G12:
Brainstorming can be explained by collecting ideas spontaneously and without
judgment where a group attempts to produce ideas or find a solution for a specific
problem. The brainstorming session should be led by an experienced facilitator to
ensure that we don't overdo or misunderstand brainstorming. Individuals generate
more ideas when working alone than when brainstorming in small, face-to-face
groups.

9. Which technique is a systematic, interactive forecasting procedure based on

independent and anonymous input regarding future events.

G11:
Delphi Technique is a systematic, interactive forecasting procedure based on

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independent and anonymous input regarding future events. Delphi techniques provide
independent and anonymous input regarding future events and it is used to derive
a consensus among a panel of experts who make predictions about future
developments.

Delphi is based on the principle that forecasts (or decisions) from a structured
group of individuals are more accurate than those from unstructured groups.

G8:
The Delphi Technique is a systematic, interactive forecasting procedure based on
independent and anonymous input regarding future events. This is because Delphi
Technique is used to derive a consensus among a panel of experts who make
predictions about future developments. It also provides independent and
anonymous input regarding future events. Also, this technique uses repeated
rounds of questioning and written responses and avoids the biasing effects
possible in oral methods.

10. What is a “Risk event”?

G11:
A risk event is a specific event or happening that could negatively or positively
affect a project’s chance of meeting its intended goals. Individual moments or
sets of circumstances that have an impact on the project are referred to as risk
events. These are the risks you put on your risk register. Consider the potential of a
key supplier going out of business, supplies arriving late, or a key team member
becoming ill. Risk events are subject to risk management processes. The project
team can identify the known risks and then seek to mitigate or eliminate their
impact on the task.

G10: Risk events refer to specific, uncertain events that may occur to the detriment
or enhancement of the project.

11. How a project manager can use probability/impact matrix or chart lists?

G9:
A project manager can use probability/impact matrix or chart lists by:

1. Listing relative probability of a risk occurring on ones ide of the matrix or

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axis ona chart.

2. Listing the relative impact of the risk occurring on the other side.

3. Label each risk as high, medium, or low in terms of its probability of

occurrence and its impact.

4. Calculate the risk factors - the numbers that represent the overall risk of
specific events based on their probability of occuring and consequences to the
project.

12. Is Top Ten Risk Item Tracking a quantitative risk analysis tool?

G10:
No. Top Ten Risk Item Tracking is a qualitative risk analysis tool, and in addition
to identifying risks, it maintains an awareness of risks throughout the life of a project
by helping to monitor risks

13. What is the main output of qualitative risk analysis?

G10:
The main output of qualitative risk analysis is updating the risk register

14. How to carry out risk analysis for large, complex projects involving leading-edge
technologies?

G8:
Large, complex projects require extensive quantitative risk analysis, where both

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quantitative and qualitative risk analysis is needed and can be done together.
There are three main techniques of quantitative risk analysis, which are Decision tree
analysis, Simulation, and Sensitivity analysis.

15. Discuss in detail Expected Monetary Value (EMV).

G11.

Expected Monetary Value(EMV) is the product of a risk event probability and

the risk event’s monetary value as well as it is a statistical concept that calculates
the average outcome when the future includes scenarios that may or may not
happen. In short, for expected monetary value(EMV) calculation relies on measuring
the probability and impact of each risk. For instance, there is a 1/6 chance of
showing the number three on the dice.

In order to find the EMV, it can be mapped out by using a decision tree to represent
the different options and scenarios.

Can be improved:

Mohamad Zamfirdaus16:34

It helps to decide the expected money gain from making certain decisions based on
probability.

Mohamad Zamfirdaus16:36

higher

we choose higher EMV value for the project

16. Explain “Monte Carlo analysis” in detail.

G8:

It stimulates a model’s outcome many times to provide a statistical distribution of

the calculated results. It is going to predict the probability of finishing by a certain

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date or the probability that the cost will be equal to or less than a certain value.
It’s meant to be used to analyze the impact of risks on your project.

For example, if this risk occurs, how will it affect its schedule or the cost of the
project. It will give a range of possible outcomes and probabilities to allow you to
consider the likelihood of different scenarios.

17. Which risks may not materialize, or their probabilities of occurrence or loss may
diminish?

G7: Identified risks may not materialize, or their probabilities of occurrence or loss
may diminish. Unknown risks can be managed proactively. The last step in project
risk management is deciding how to address this knowledge area for a particular
project by performing risk management planning.

18. How to create the risk register?

G10: Risk registers can be created in a Microsoft Excel file or as part of a

sophisticated database. More sophisticated risk management systems, such as
Monte Carlo simulation tools, help develop models and use simulations to analyze
and respond to various risks

PRACTICAL:

● Refer to the document named as “Guide to Microsoft Project Professional 2016” in

MMLS. Please do the Revision and Practise from (Page 16 to Page 20).

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TOPIC-3 - (COMPLETE & COMPREHENSIVE)-MIND MAP

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