Which of the following parameters would affect the prioritization of the risk responses and development of the risk response plan? Each correct answer represents a complete solution.
Choose three.
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A. B. C. D.ACD.
The prioritization of the risk responses and development of the risk response plan is influenced by several parameters: -> Cost of the response to reduce risk within tolerance levels -> Importance of the risk -> Capability to implement the response -> Effectiveness of the response -> Efficiency of the response Incorrect Answers: B: Time required to mitigate risk does not influence the prioritization of the risk and development of the risk response plan.
It affects the scheduled time of the project.
The process of prioritizing risk responses and developing a risk response plan involves considering various factors to ensure that the organization's resources are allocated in the most effective manner possible. The following are the three parameters that affect the prioritization of risk responses and development of the risk response plan:
A. Importance of the risk: The importance of the risk refers to the potential impact on the organization if the risk were to materialize. The risk's importance is determined by considering the criticality of the assets or processes that are at risk, the likelihood of the risk occurring, and the potential impact on the organization's goals and objectives. The higher the importance of the risk, the more attention it should be given, and the greater the resources that should be allocated to mitigate it.
B. Time required to mitigate risk: The time required to mitigate the risk refers to the duration of time that will be required to implement the risk response and reduce the risk to an acceptable level. This parameter is critical to prioritize the order of the risk response plan. Risks that require a more extended time to mitigate should be given priority, as they may impact the organization's goals and objectives.
C. Effectiveness of the response: The effectiveness of the response refers to the ability of the risk response to reduce the risk to an acceptable level. The effectiveness of the response should be evaluated by considering its ability to address the root cause of the risk, the likelihood of the response being successful, and the cost of the response. An effective response that can reduce the risk to an acceptable level while being cost-effective should be given priority.
D. Cost of the response to reduce risk within tolerance levels: The cost of the response refers to the financial impact of the risk response plan. The cost should be evaluated by considering the budget allocated to risk management and the cost-effectiveness of the response. If the cost of the response is not within the budget allocated for risk management, then other risk responses that are more cost-effective should be prioritized.
In conclusion, the importance of the risk, the time required to mitigate the risk, and the effectiveness of the response are critical factors that should be considered when prioritizing risk responses and developing a risk response plan. These parameters should be evaluated against the organization's goals and objectives and budget allocated for risk management to ensure the effective allocation of resources.