Bill is the project manager of the JKH Project.
He and the project team have identified a risk event in the project with a high probability of occurrence and the risk event has a high cost impact on the project.
Bill discusses the risk event with Virginia, the primary project customer, and she decides that the requirements surrounding the risk event should be removed from the project.
The removal of the requirements does affect the project scope, but it can release the project from the high risk exposure.
What risk response has been enacted in this project?
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A. B. C. D.C.
The risk response that has been enacted in this project is "Avoidance".
Risk avoidance is a risk response strategy that involves eliminating the risk or removing the cause of the risk event. In this case, the project team has identified a risk event with a high probability of occurrence and high cost impact on the project. The risk event has been discussed with the project customer, Virginia, who has decided to remove the requirements surrounding the risk event from the project. By doing so, the project scope has been affected, but the project has been released from the high risk exposure.
In other words, the project team has decided to avoid the risk by eliminating the requirement that was causing the risk event. This strategy is appropriate when the risk event has a high probability of occurrence and a high cost impact on the project, and when the cost of the risk response is less than the potential loss.
The other risk response strategies are:
Acceptance: This strategy involves accepting the risk event and not taking any action to prevent it from occurring. This strategy is appropriate when the cost of the risk response is greater than the potential loss.
Mitigation: This strategy involves reducing the probability or impact of the risk event. This strategy is appropriate when the risk event has a moderate probability of occurrence and a moderate cost impact on the project.
Transference: This strategy involves transferring the risk to a third party, such as an insurance company. This strategy is appropriate when the cost of the risk response is less than the potential loss, and when the third party can effectively manage the risk event.