Risk Response: Cost Optimization Solution
Question
Shawn is the project manager of the HWT project.
In this project Shawn's team reports that they have found a way to complete the project work cheaply than what was originally estimated earlier.
The project team presents a new software that will help to automate the project work.
While the software and the associated training costs $25,000 it will save the project nearly $65,000 in total costs.
Shawn agrees to the software and changes the project management plan accordingly.
What type of risk response had been used by him?
Answers
Explanations
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A. B. C. D.C.
A risk event is being exploited so as to identify the opportunities for positive impacts.
Exploit response is one of the strategies to negate risks or threats that appear in a project.
This strategy may be selected for risks with positive impacts where the organization wishes to ensure that the opportunity is realized.
Exploiting a risk event provides opportunities for positive impact on a project.
Assigning more talented resources to the project to reduce the time to completion is an example of exploit response.
Incorrect Answers: A: To avoid a risk means to evade it altogether, eliminate the cause of the risk event, or change the project plan to protect the project objectives from the risk event.
B: Accepting is a risk response that is appropriate for positive or negative risk events.
It does not pursue the risk, but documents the event and allows the risk to happen.
Often acceptance is used for low probability and low impact risk events.
D: Enhancing is a positive risk response that aims to increase the probability and/or impact of the risk event.
The type of risk response used by Shawn in this scenario is "Exploiting."
Exploiting is a risk response strategy where the project team takes advantage of the opportunities that arise during the project to maximize the benefits. In this scenario, the project team discovered an opportunity to reduce costs and increase efficiency by implementing new software. By exploiting this opportunity, Shawn and the project team can reduce costs and complete the project work more efficiently.
On the other hand, Avoiding is a risk response strategy where the project team takes steps to eliminate the risk altogether. For example, if the risk is related to the use of a particular technology, the project team may choose to avoid using that technology altogether.
Accepting is a risk response strategy where the project team acknowledges the risk but takes no action to address it. This strategy may be appropriate if the risk is low or if the cost of addressing the risk is too high.
Enhancing is a risk response strategy where the project team takes steps to increase the probability and/or impact of the positive risks. This strategy may be appropriate if the potential benefits of the risk are high and the cost of addressing the risk is low.
In summary, Shawn and the project team in this scenario used the Exploiting risk response strategy to take advantage of the opportunity to reduce costs and increase efficiency by implementing new software.
