Identifying the Best Description for a Risk Event with Potential Project Cost Savings

D.

This risk event has the potential to save money on project costs, so it is an opportunity, and the appropriate strategy to use in this case is the exploit strategy.

The exploit response is one of the strategies to negate risks or threats 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, C: Mitigation and avoidance risk response is used in case of negative risk events, and not in positive risk events.

Here in this scenario, as it is stated that the event could save $100,000, hence it is a positive risk event.

Therefore should not be mitigated or avoided.

B: To accept risk means that no action is taken relative to a particular risk; loss is accepted if it occurs.

But as this risk event bring an opportunity, it should me exploited and not accepted.

The BEST statement that describes the risk event that could save $100,000 in project costs depends on the context of the project and the risk management strategy. However, we can analyze the given answer choices to determine the most appropriate statement.

A. This risk event should be mitigated to take advantage of the savings.

This statement suggests that the risk event should be reduced or eliminated to take advantage of the savings. Mitigation strategies could include implementing controls or contingency plans to reduce the likelihood or impact of the risk event. However, mitigating the risk event could also be costly and time-consuming, and it may not be necessary if the risk event has a low likelihood of occurring or a low impact on the project.

B. This is a risk event that should be accepted because the rewards outweigh the threat to the project.

This statement suggests that the risk event should be accepted because the potential savings outweigh the potential negative impact on the project. Acceptance strategies could include taking no action to address the risk event and relying on contingency reserves to cover any potential costs. However, accepting the risk event could also expose the project to significant financial or schedule risks if the risk event occurs.

C. This risk event should be avoided to take full advantage of the potential savings.

This statement suggests that the risk event should be avoided altogether to ensure that the project can fully realize the potential savings. Avoidance strategies could include changing the project plan or scope to eliminate the risk event or outsourcing the activity to a third-party to transfer the risk. However, avoidance strategies could also result in increased costs or delays if the risk event is a critical path activity.

D. This risk event is an opportunity to the project and should be exploited.

This statement suggests that the risk event is an opportunity to the project and should be actively pursued to realize the potential savings. Exploitation strategies could include taking proactive steps to increase the likelihood or impact of the risk event, such as speeding up the activity or allocating additional resources to it. However, exploitation strategies could also increase the likelihood of negative consequences if the risk event does occur.

In conclusion, the BEST statement that describes the risk event that could save $100,000 in project costs depends on the context of the project and the risk management strategy. However, option A, "This risk event should be mitigated to take advantage of the savings," is likely the most appropriate statement, as it balances the potential cost and time investment of mitigation against the potential benefits of the savings.