Identify the risks in the form of “cause-risk- effect,” as described below:
Foodbank project aims to improve the food status of those individuals in need of food relief; for those who have difficultly in accessing the food, it may be because of their financial status or their geographical location (Mulcahy, 2003) . The modes of operation of the foodbanks differ in the model which can be a warehouse model or the frontline model. There are many risks associated with food bank project which arises from acquiring, storage and distribution of food. As a result of poor building architecture, lack of emergency plan fire may pose a great risk. Since the food bank project will use the warehouse to handle all the food products, a fire outbreak may be an unforeseen risk which may cause damage of property or lives ( Hillson, 2016). . Also, injuries may occur from slips and tripping over resulting from spillages which are caused by poor housekeeping, poor lit areas.
Discuss and analyze the importance of each of the four types of risk identified in Figure 11-4 (technical, management, commercial, and external).
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Technical risk
This risk is associated with project complexity and the design of the project which affects the development of the project. This kind of risk is linked directly to the process which may involve loopholes and deficiencies in the project which impacts on cost as well as causes overruns (Mulcahy, 2003) . Technical risks in the Food bank project will involve the technological factor which causes the risk that is the risk in technology may be brought by the project website which may be tampered with, and culprits use this vulnerability to their advantage.
Commercial risks
A financial risk which the project has to incur for business sustenance, as a potential risk arises from trading or the market inform of credit which lacks collateral in the case of food bank project, it may incur non-commercial risks due to the nature of its operation (Mulcahy, 2003). The food bank project carries out an activity that does not require commerce as it is non-profit, so the risk involving commercial option is less likely to affect the project.
Management Risk
This type of risk involves finances, ethical regulation of the project which is otherwise related to inefficiency, destruction, and underperformance of the management (Mulcahy, 2003) . This risk may cause the investors to hold in the stock in the company. Also, management risk can be linked to the management of finances in the business which spells out the financial obligation of the business the entire project face risk as a result of the poor decision-making process which in turn affects the entire operation. As a food bank company, the business obligation is to the final consumer in line with the operation mandate. The business risks a lawsuit if it runs contrary to what it is mandated ( Project Management Institute, 2017) . For instance, making profits out of the volunteered and donated merchandises is a crime punishable by law. The fiduciary responsibilities assigned to the organization must be fulfilled. As in all the funds allocate to project must be used as stipulated contrary to that it will be viewed as fraud which will attract a lawsuit.
External risks
This type of risk in project management occurs from without the business structure. Most of the time this factor are uncontrollable as the project manager may fail to foresee just in time to contain it. Thus the aftermath effect of the associated risk is hard to reduce. There are three types of external risks factors which may include economic factors, which arises from the changing market conditions, for instance, sudden depression in the economy which causes revenue loses. Likewise, the natural risk factors make the business to operate abnormally that is natural calamity in this case prolonged drought or flooding which destroy food crops and lastly the political risk factors which involve changing political climate or stern government regulation that is related to financial matters ( Project Management Institute, 2017) . The increasing interest rates, changing laws concerning importation/exportation, tariffs, higher taxation, as well as other legislations that have a negative bearing on the business ( Hillson, 2016). Given that the risks from outside the business cannot be accurately foreseen, it will be extremely hard for the food bank project to reduce the occurrence of these three risk factors as not all types of the unforeseen risks can be insured fully to get ultimate relief.
Discuss the importance of creating an RBS.
Risk Breakdown structure RBS is a very important tool for the project manager used in the assessment and categorization of risks. It has a hierarchical structure that represents risks as per their classification of risks. Various levels facilitate the risk streamlining and identification of risks using a categorical process where it can be easy to make a trajectory mark according to risks category ( Hillson, 2016) . Management of risk is component of Project Management of the greater essence in general. By using the RBS, the Project Manager is set to make a risk diagnosis and be in a position to look proper solution right in time to remedy the situation, at this point the project is set to succeed. Also, RBS tool helps the Project Manager in the visualization as well as strategizing the suitable approach towards management of project risks ( Project Management Institute, 2017) . When there is no RBS in place, a simple list cannot be functional in this case as it lacks the hierarchical view and also it will be without the categorized approach whereby the by the scattered process will slow down the responses along with in due course affect the project the negatively.
References
Hillson, D. (2016). Enterprise risk management: Managing uncertainty and minimizing surprise. In Advising Upwards (pp. 75-104). Routledge.
Mulcahy, R. (2003). Risk management: Tricks of the trade for project managers: A course in a book . Minneapolis, MN: RMC Pub.
Project Management Institute. (2017). A guide to the project management body of knowledge: (PMBOK® Guide) (6th ed.). Newtown Square, PA, USA: Project Management Institute.
Appendix
FOOD BANK PROJECT
MANAGEMENT RISK
EXTERNAL RISK
COMMERCIAL RISK
TECHNICAL RISK
PROCESSES
OPERATIONS MANAGEMENT
RESOURCING
LEGISLATION
EXCHANGE RATES
ENVIRONMENTAL/WEATHER
REGULATORY
SUPPLIES AND VENDORS
PARTNERSHIPS & JOINT VENTURES
TECHNOLOGY
TECHNICAL INTERFACES
PERFORMANCE & RELIABILITY
ORGANIZATION
COMMUNICATION
CLIENT/CUSTOMER STABILITY
