Glossary - R

Random Error

Indefiniteness of result due to finite precision of experiment. Measure of fluctuation in result upon repeated experimentation. Source: A4

Rate of Consumption

Refer to Depreciation (economic). Source: A4

Real Rate

Price or cost series from which the effects of general inflation have been removed. Source: A4

Real Rate of Interest

The difference between the interest rate and the inflation rate. Source: A4

Real Rate of Return

Operating revenue less operating costs (including depreciation and excluding interest) divided by the written down current value of assets employed. Source: A4

Recoverable Amount

The net amount that is expected to be recovered through the cash inflows and outflows arising from an asset's continued use and subsequent disposal. Source: A4

Recurrent Costs

All those costs, including the cost of finance, incurred in holding, maintaining and operating an asset. Source: S2

Refurbish

Very similar to Rehabilitation. In general terms, "refurbish" refers to the "fit out" of a building, whereas "rehabilitation" refers to civil projects such as a section of road work. Source: G3

Register

Refer to: Asset Register, Contractor Register and Consultant Register.

Rehabilitation

Extensive work intended to bring an asset up to a new standard or to alter it for a new use. (Refurbishment or upgrading). Source: G3

Reliability

The probability that a system performs a specified function or mission under given conditions for a prescribed time. Source: A4

Reliability Centered Maintenance

From a maintenance planning perspective the following reliability characteristics are important

• mean life - the mean value of the length of the times to failure of all items in a population, under stated conditions
• mean time to failure (MTTF) - in a stated period in the life of a population of items, the ratio of the cumulative time to the total number of failures in the population during the period, under stated conditions
• mean time between failures (MTBF) - for a stated period in the life of an item, or a population of items, the mean value of the length of time between each item's consecutive failures, calculated as the ratio of the cumulative time to the total number of failures, under stated conditions
• mean time to first failure (MTTFF) - the mean value of the times to the first failures of items in a population of items. Source S2 : AS/NZS ISO 8402:1994.

Request for Proposal (RFP)

A document seeking information and opinions from prospective biders as to costs and methods of providing the service. It may be used to short list bids in a multi-stage biding process. Source: T3

Request for Bid

An invitation to submit bids addressing the full range of criteria and conditions listed in the bid document. Source: S3

Residual Life

The remaining effective or useful life of an asset. Source: D1

Residual Risk

The remaining level of risk after risk treatment measures have been taken. (AS/NZS 4360: 1999) Source: S2

Residual Value

The net amount expected to be recovered on disposal of a depreciable asset at the end of its useful life. Source: P1

Resources

The four fundamental input resources available to both the public and private sectors, to enable their outputs of services and/or goods achieve their desired outcomes. Source: A4

Resource Cost

The market price of services or goods minus any tax or including any subsidies. Source: A4

Restoration

Similar to "Rehabilitation", although the "as new" condition refers to as originally constructed some significant time in the past (as in a heritage asset). In general, every attempt is made to utilize the original materials within reasonable bounds. Source: A4

Retention Account

A project specific account established under a contract, in which an agreed percentage of the contract sum is retained by the principal as a limited security to ensure the satisfactory performance of the contractor in relation to obligations under the contract and the rectification of defective workmanship. At practical completion, part of the monies in the retention account may be released to the contractor, with the balance released at the end of the defect period or upon issue of final certificate. Source: P1

Retention Sum (Monies)

The sum of money specified in a retention clause of a contract, regularly deducted from the progress payments to the contractor and placed in a retention fund until an agreed percentage of the contract sum is reached. Source: T2

Risk (1)

The Australian and New Zealand Standard (AS/NZS 4360:1999 - Risk Management) defines risk as: "the chance of something happening that will have an impact on objectives." Source: S2

Risk (2)

The application of stochastic processes, such as Monte Carlo simulation, to the range of possible values of key factors in order to determine the resultant ranges of outcomes and their probability of occurrence, rather than a unique value. The purpose of risk analysis is to identify the causes, effects and magnitudes of risk and to provide a basis for risk assessment and treatment. Source: P1

Risk (3)

The potential for realization of unwanted, adverse consequences to human life, health, property, or the environment; estimation of risk is usually based on the expected value of the conditional probability of the event occurring times the consequence of the event given that it has occurred. Source: S2

Risk (4)

The possibility that an outcome is not achieved or is replaced by another outcome or an unforeseen event occurs. This includes both uncertainty due to future events and the consequences of limited knowledge, information or experience. The significance of risks is the impact they may have on the achievement of proposal objectives, delivery goals or management effectiveness. Source: D1

Risk Acceptance

An informed decision to accept the likelihood and the consequences of a particular risk. (See also Risk Appetite below) Refer: AS/NZS 4360:1999 Source: S2 Refer the Risk Manager.

Risk Analysis

The process of identifying risks, estimating their likelihood and evaluating potential consequences. Source: N1

A systematic use of available information to determine how often specified events may occur and the magnitude of their likely consequences. Refer: AS/NZS 4360:1999 Source: S2 Refer the Risk Manager.

A systematic use of available information to determine how often specified events may occur and their likely consequences. The purpose of risk analysis is to identify the causes, effects and magnitudes of risk and to provide a basis for risk assessment and mitigation. Source: A4 Refer the Risk Manager.

Risk Appetite

The assessed level of risk that is within a person's delegation, prior to the need to refer upwards on the organization's hierarchy for direction and/or acceptance. Source: S2 Refer the Risk Manager.

Risk Assessment

The process of establishing information regarding acceptable levels of a risk and/or levels of risk for an individual, group, society, or the environment. Refer the Risk Manager. Source: A4

Risk Avoidance

An informed decision not to become involved in a risk situation.

Risk Budget

Actual costs incurred (but rarely provided for) on the activities associated with the management of risk throughout the lifecycle of a project, or an entire program. Planners for projects should expect to spend 1-3% of their project budget on risk analysis and management up to the budget approval process. From procurement through to disposal, the procurement authority should expect to spend an additional 2-3% on ongoing risk analysis and mitigation. Source: A4

Risk Consequences

The impacts on desired outcomes from the risk event occurring. Source: A4 Refer the Risk Manager.

Risk Control

That part of risk management that involves the provision of policies, standards and procedures to eliminate, avoid or minimize adverse risk facing an enterprise. (AS/NZS 4360:1999 Source: S2). Refer the Risk Manager.

Risk Engineering

The application of engineering principles and methods to risk management. AS/NZS 4360:1999 Source: S2 Refer the Risk Manager.

Risk Estimation

The scientific determination of the characteristics of risks, usually in as quantitative a way as possible. These include the magnitude, spatial scale, duration and intensity of adverse consequences and their associated probabilities as well as a description of the cause and effect links. Refer the Risk Manager. Source: A4

Risk Evaluation

A component of risk assessment in which judgments are made about the significance and acceptability of risk. Refer the Risk Manager. Source: A4

Risk Exposure

The potential impact of economic, financial or social loss or gain, physical damage or injury or delay on the achievement of project objectives, delivery goals or management effectiveness. Source: N1

Risk Financing

The methods applied to fund risk treatment and the financial consequences of risk. AS/NZS 4360:1999 Source: S2 Refer the Risk Manager.

Risk Identification

Recognizing that a hazard exists and trying to define its characteristics. Often risks exist and are even measured for some time before their adverse consequences are recognized. In other cases, risk identification is a deliberate procedure to review, and it is hoped, anticipate possible hazards. In reality, it is the process of determining what can happen, why and how. Refer the Risk Manager. Source: A4

Risk Level

The level of risk calculated as a function of likelihood and consequence. Source: S2

Risk Management

A systematic way of identifying and analyzing potential risks and devising and implementing mitigation responses appropriate to their expected impact. AS/NZS 4360:1999. Refer the Risk Manager. Source: S2

The systematic application of management policies, procedures and practices to the tasks of identifying, analyzing, assessing, treating and monitoring risk. Refer AS/NZS 4360:1999 - Source: S2

The culture, processes and structures that are directed towards the effective management of potential opportunities and adverse effects. Source: A4

A structured way of identifying potential risks, analyzing their consequences, and devising and implementing responses so as to ensure that proposal or project objectives are achieved. This includes management of ongoing risks associated with the ownership of assets Refer AS/NZS 4360:1999 - Source: D1

Risk Management Process

The systematic application of management policies, procedures and practices to the tasks of establishing the context, identifying, analyzing,evaluating, treating, monitoring and communicating risk.Refer AS/NZS 4360:1999 - Source: S2 .

A management technique used to identify and analyze potential risks and to implement appropriate responses. Refer AS/NZS 4360:1999 - Source: D1

Risk Mitigation

A recognition of the basic fact that in general it is neither financially feasible, nor often humanly possible to eliminate all risks associated with a project or program. The concept of "mitigation" accepts those risks it concedes lie within the organization's "risk appetite" framework - those identified risks where controls are already in place to monitor and manage them. The concept further develops detailed risk management strategies and/or plans to manage those risks beyond the parameters of its "risk appetite", and by so doing, brings these risks within its risk awareness context and control parameters. Refer the Risk Manager. Source: A4

Risk Priority Number

In the FMECA process, the Risk Priority Number is a mathematical product of the numerical severity, occurrence, and detection ratings.

RPN = (S) X (O) X (D).

This number is used to place priority on items than require additional quality planning. Source: A4

Risk Reduction

A selective application of management policies, procedures and practices to the tasks of identifying, analyzing, assessing, treating and mitigating risk. Refer: AS/NZS 4360:1999 - Source: D1

Risk Retention

Intentionally or unintentionally retaining the responsibility for loss, or financial burden of loss within the organization. Refer: AS/NZS 4360:1999 - Source: S2

Risk Sharing

The apportionment between a contractor and a principal of the costs of delay or other costs arising from causes beyond the control of either party, such as price rises or uninsurable risk. Source: G1

Risk Transfer

Shifting the responsibility or burden for loss to another party through legislation, contract, insurance or other means. Risk transfer can also refer to the shifting of a physical risk or part thereof elsewhere. Refer AS/NZS 4360:1999 - Source: D1

Risk Treatment

Selection and implementation of appropriate options for dealing with risk. Refer AS/NZS 4360:1999

Routine Maintenance

Day-to-day operational activities to keep the plant operating (e.g. replacement of light bulbs, cleaning of drains, repairing leaks, etc.) and that form part of the annual operating budget. Includes preventive maintenance. Source: G3

Run to Failure

A maintenance strategy that intentionally allows an asset to operate until failure before corrective intervention based on a determination that the cost to maintain exceeds the consequence costs of failure to the organization.