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Project Risk Management (Benefits (Anticipate / Avoid Problems, Prevent…
Project Risk Management
Benefits
Anticipate / Avoid Problems
Prevent surprises
Improve ability to negotiate
Meet customer commitments
Reduce schedule slips
Reduce costs overruns
Types of Risks
Positive
ak.a opportunities
good things happening
goal: to maximize
Negative
understanding potential problems
insurance / investments
goal: to minimize
Risk Utility
a.k.a risk tolerance
amount of satisfaction / pleasure received from a potential payoff
risk seeker have higher tolerance
Risk neutral approach: balance risk and payoff