Your project has several risks that may cause serious financial impact should they happen.
You have studied the risk events and made some potential risk responses for the risk events but management wants you to do more.
They'd like for you to create some type of a chart that identified the risk probability and impact with a financial amount for each risk event.
What is the likely outcome of creating this type of chart.
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A. B. C. D.D.
The likely outcome of creating a chart that identifies the risk probability and impact with a financial amount for each risk event is quantitative analysis (option B).
Quantitative analysis is a risk assessment process that involves the use of numerical or statistical methods to analyze risk events, determine the probability and impact of each risk, and calculate the potential financial loss associated with each risk. This analysis helps in making informed decisions about the management of the identified risks.
The chart that is requested by the management will provide a clear and concise representation of the identified risks, their likelihood of occurrence, their potential impact on the project, and the financial impact of each risk. This chart will help the management team to prioritize their risk response efforts and allocate appropriate resources for managing the risks.
Based on the results of the quantitative analysis, the project team can then develop a risk response plan (option A) that outlines specific actions to mitigate, avoid, transfer or accept the identified risks. The risk response plan will also include a contingency reserve (option D) which is a budgetary amount set aside to cover unexpected expenses that may arise due to the occurrence of a risk event.
Therefore, the likely outcome of creating a chart that identifies the risk probability and impact with a financial amount for each risk event is to provide the information required for a quantitative analysis, which in turn will inform the development of a risk response plan and the establishment of a contingency reserve.