New Topics in PMI-RMP Exam

Risk Management - New Topics 2016

The below new topics are widely used and mentioned in PMI-RMP Exam, and in order to pass the exam you have to know them well.

1. Neuro Linguistic Programming

 Neuro-linguistic programming (NLP) is an approach to communication, personal development, and psychotherapy created by Richard Bandler and John Grinder in California, United States in the 1970s.

2. Latin Hepercube Sampling LHS

(LHS) is a statistical method for generating a sample of plausible collections of parameter values from a multidimensional distribution.

3. Correlation coefficient

A correlation coefficient is a coefficient that illustrates a quantitative measure of some type of correlation and dependence, meaning statistical relationships between two or more random variables or observed data values.

4. Agile Project Management

Agile project management is an iterative approach to planning and guiding project processes. 

Just as in agile software development, an agile project is completed in small sections called iterations. Each iteration is reviewed and critiqued by the project team, which may include representatives of the client business as well as employees. Insights gained from the critique of an iteration are used to determine what the next step should be in the project. Each project iteration is typically scheduled to be completed within two weeks.

5. Utility Function

the utility function measures welfare or satisfaction of a consumer as a function of consumption of real goods, such as food, clothing and composite goods rather than nominal goods measured in nominal terms. Utility function is widely used in the rational choice theory to analyze human behavior.

6. Pre-Mortem Analysis

also known as a premortem — is a managerial strategy in which a manager imagines that a project or organization has failed, and then works backward to determine what potentially could lead to the failure of the project or organization.

7.Crystal Ball Simulation

Crystal Ball is the easiest way to perform fast risk analysis and optimization in your own spreadsheets. With one integrated tool-set, you can use your own historical data to build accurate models, automate "what if" analysis to understand the effect of underlying uncertainty and search for the best solution or project mix.

Oracle Crystal Ball is the leading spreadsheet-based application for predictive modeling, forecasting, simulation, and optimization. It gives you unparalleled insight into the critical factors affecting risk. With Crystal Ball, you can make the right tactical decisions to reach your objectives and gain a competitive edge under even the most uncertain market conditions.

Monte Carlo Simulation

Monte Carol simulation is a practical tool used in determining contingency and can facilitate more effective management of cost estimate uncertainties. Given the right Monte Carlo simulation tools and skills, any size project can take advantage of the advancements of information availability and technology to yield powerful results.

  Monte Carlo sampling refers to the traditional technique for using random or pseudo-random numbers to sample from a probability distribution. The term Monte Carlo was introduced during World

War II as a code name for simulation of problems associated with development of the atomic bomb. Today, Monte Carlo techniques are applied to a wide variety of complex problems involving random

behavior. A wide variety of algorithms are available for generating random samples from different types of probability distributions.

Monte Carlo sampling techniques are entirely random — that is, any given sample may fall anywhere within the range of the input distribution. Samples, of course, are more likely to be drawn in areas

of the distribution which have higher probabilities of occurrence. In the cumulative distribution shown earlier, each Monte Carlo sample uses a new random number between 0 and 1. With enough iterations,

Monte Carlo sampling "recreates" the input distributions through sampling. A problem of clustering, however, arises when a small number of iterations are performed

In PMI-RMP Exam Expect to See between 4-7 questions that ask you to interpret the Monte Carlo simulation diagram, see the below example;

As you see, the diagram above shows histogram and a cumulative distribution, in Exam, Expect that you will be asked for example to find P-45 or P50, it is simply means probability of 50% for achieving a specific cost, which as illustrated from  the cumulative distribution above equal to 74,753,000$

Also expect to find questions such as, if the owner has a budget of the project equal to 60,000 $ and he wants to have a confidence level of 50%, what is the contingency reserve that the project manager needs to allocate to achieve this confidence level? the answer is the difference between 60,000 and 74,753,00 $

the characteristics of Monte-Carlo simulation is also a big topic in the exam and you have to understand them well 

Note that the above diagram was for a cumulative distribution given, you have to distinguish with the same histogram but with a Normal distribution given as the below diagram

Here the summation of the vertical bars starting from the left side will give the cumulative distribution as shown on the table at the right side

PMI-RMP Exam Tips

PMI-RMP Exam is considered as one of the most important

exams related to Risk Management Field around the world, the exam is designed and prepared bu Project Management Institute PMI and is conducted in accredited online training centers in most countries in the world.

The Exam is testing your knowledge, experience and your skills in applying and conducting Risk   Management in your Organization/Company and how much you can apply the Risk Management Methodology in your organization.   

The Exam contains 170 Multiple choice Questions, 20 Questions will be anonymously chosen and their results will not be counted in the last score, you have to get 76 % right answers to pass the exam as per most of training centers and those who got the exams, knowing that PMI did not declare the amount of questions that you have to answer them correctly to pass the exam.

Preparing for PMI-RMP Exam will not be easy, it will take a time to guarentee that you will pass the exam, the most useful references will be discussed and the topics will be clearly illutrated in our  Blogger, just follow us and passing the exam will just be a manner of time

The main reference for preparation for the PMI-RMP exam still the last issued book from PMI for the risk which is complying with PMBOK revision 4, knowing that PMI issued PMBOK after that but for the risk it is still the old reference, it is expected that project management institute PMI will issue a new revision of risk standards book within 2017 which will contain new aspects in risks and a new methodologies and field in risk management .

Risk Management by Rita Mulcahy is also a main useful resource to prepare for the exam, however it does not contain many tools and aspects in PMI Risk management standard book such as Monte-carlo simulation.