1. What is an influence diagram? How is it used to identify and analyze risk sources and to assign priorities to those sources?
2. List and review the principles of risk management.
3. How does risk planning serve to increase risk-taking behavior?
4. Where would criteria such as minimax, maximin, and minimax regret be used during the project life cycle to manage project risk?
Answers
Answer:
1)An Influence Diagram is a compact, graphical way to look at the factors involved in making a decision. Influence diagrams show how the decisions, variables at work, and desired outcomes relate to one another, which is useful for making it easy to see the main factors involved and how each factor impacts the others.
2) RISK MANAGEMENT PRINCIPLES
Ensure risks are identified early. ...
Factor in organisational goals and objectives. ...
Manage risk within context. ...
Involve stakeholders. ...
Ensure responsibilities and roles are clear. ...
Create a cycle of risk review. ...
Strive for continuous improvement.
3) Risk-taking behaviors occur because we make a decision to engage in the behavior (Furby & Beyth-Marom, 1992; Reyna & Farley, 2006). Emotions, impulsivity, a failure to plan ahead—these and other reasons—can lead to greater involvement in risk-taking behaviors.
4) The maximin criterion is as easy to do as the maximax. Except instead of taking the largest number under each action, you take the smallest payoff under each action (smallest number in each column). You then take the best (largest of these).By Robert J. Graham. The mini-max regret criterion in managerial economics bases business decisions on the maximum regret associated with each action. Regret measures the difference between each action's payoff for a given state of nature and the best possible payoff for that state of nature.
Explanation:
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