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A project manager is concerned about potential delays due to frequent changes in client requirements. To address this, she decides to discuss and finalize the requirements in detail before starting the project. Which type of risk response strategy is she using?
A project manager is concerned about potential delays due to frequent changes in client requirements. To address this, she decides to discuss and finalize the requirements in detail before starting the project. Which type of risk response strategy is she using?
During a software development project, a team discovers that there is a high possibility of scope creep due to the client wanting additional features. The project manager chooses to accept that some features may not be completed by the deadline but continues to work on the essential parts. What risk response strategy is being demonstrated?
During a software development project, a team discovers that there is a high possibility of scope creep due to the client wanting additional features. The project manager chooses to accept that some features may not be completed by the deadline but continues to work on the essential parts. What risk response strategy is being demonstrated?
In a project aimed at launching a new mobile application, the team identifies that the app’s performance could be hindered by unexpected increases in user traffic. To counter this, they implement performance optimization techniques and conduct stress tests before launch. Which risk response strategy is this exemplifying?
In a project aimed at launching a new mobile application, the team identifies that the app’s performance could be hindered by unexpected increases in user traffic. To counter this, they implement performance optimization techniques and conduct stress tests before launch. Which risk response strategy is this exemplifying?
A company is developing a new software solution and is uncertain about meeting the required security standards. As a solution, they decide to hire a specialized security consulting firm to handle all aspects of security compliance. What type of risk response strategy is this?
A company is developing a new software solution and is uncertain about meeting the required security standards. As a solution, they decide to hire a specialized security consulting firm to handle all aspects of security compliance. What type of risk response strategy is this?
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Study Notes
Risk Response Strategies
- Contingency planning involves creating a backup plan for unexpected events, like a key developer leaving the project. This is known as mitigation. It reduces the negative impact by having a fall-back option.
Avoidance
- Scenario: A company is launching a new product line with a high risk of negative publicity if the marketing campaign isn't perfectly executed. They conduct a thorough market analysis pre-launch and revise their marketing strategy based on the findings to minimize potential damage associated with the launch failure.
Acceptance
- Scenario: A small startup company has a limited budget and faces a high risk associated with potential supply chain delays. They simply acknowledge this risk and accept potential delays if suppliers are unable to deliver on time.
Mitigation
- Scenario: A construction project is at risk of weather delays. The project manager develops a detailed schedule that includes contingency days for unforeseen delays. They establish an early warning system to monitor weather forecast and proactively communicate with contractors to adjust the project timeline if necessary.
Transference
- Scenario: A software development company is concerned about the risk of potential losses due to software defects discovered when the product goes live. They purchase insurance to cover potential compensation for customer lawsuits due to these errors.
Example Question 1 – Mitigation
- Scenario: A manufacturing plant faces a potential production disruption due to a predicted shortage of raw materials. The plant manager proactively negotiates long-term contracts with multiple suppliers to maintain a consistent supply and ensures alternate sources of raw materials are accessible.. Which risk response strategy is demonstrated?
Example Question 2 – Avoidance
- Scenario: A company anticipates a significant increase in energy prices and faces high risks associated with significant costs for the next fiscal year. Due to the uncertainty of the current energy market they decided to postpone the new manufacturing facility opening until energy costs are more predictable. Which risk response strategy are they using?
Example Question 3 – Acceptance
- Scenario: A small business owner recognizes the risk of theft from the warehouse is low. They have a limited budget for a comprehensive security system, so they simply accept this low risk, acknowledging the small potential cost of potential loss. Which risk response strategy are they utilizing?
Example Question 4 – Transference
- Scenario: A company is planning a large-scale public event, and there is a significant risk of damage to company property due to vandalism or accidents during the event. Which risk response strategy would be best suited to limit their financial liability for such incidents?
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Description
Test your knowledge on various risk response strategies including avoidance, acceptance, and mitigation. This quiz will evaluate your understanding of how to handle potential risks in project management effectively.
