Risk Assessment
The process of analyzing identified risks to estimate their likelihood and potential impact.
Key Points
- Performed after risk identification to analyze probability and impact.
- Includes qualitative methods (scoring, ranking) and quantitative methods (numerical analysis, simulations).
- Results guide prioritization, response planning, and contingency reserves.
- Uses inputs like risk statements and historical data; outputs include risk ratings and updates to the risk register.
Example
After listing risks on a software project, the team estimates the chance and impact of a critical vendor delay (40% probability, high schedule impact). They rank it as a top risk and plan mitigation steps such as securing a backup supplier.
PMP Example Question
After identifying risks, a project manager leads a session to estimate each risk's probability and potential effect to prioritize the list. What process is being performed?
- Risk identification
- Risk assessment
- Risk response planning
- Risk audit
Correct Answer: B — evaluating and estimating identified risks
Explanation: Risk assessment analyzes known risks to estimate probability and impact for prioritization. Identification creates the list, response planning selects actions, and audits review effectiveness.
