Qualitative Risk Analysis

Correct Answer: Risk categorization

The best answer is 'Risk Categorization'. As a project manager, when confronted with a risk such as a team's limited knowledge about new technology involved in a project, you should perform a qualitative risk analysis. This may involve categorizing risks based on their potential impact, the likelihood of their occurrence, or other relevant factors. This can help to prioritize risks and determine an appropriate response strategy. The other options- 'Ignoring the team's lack of knowledge' is not a suitable strategy for risk management. It would likely lead to further issues down the line as the team might struggle to implement the new technology effectively 'Assuming the team will learn as they go' is a risky assumption which could slow progress and lead to costly mistakes 'Expecting the vendor to handle all of the tech details' places too much reliance on an external party and does not address the issue of the team's limited knowledge, which could impact their ability to manage the project and its associated risks effectively. It's important that the project team has a good understanding of the technology they're working with.

Correct Answer: Document the risk and develop a risk response strategy.

The best action for the project manager to take is to 'Document the risk and develop a risk response strategy.' By following this approach, the project manager is being proactive and prepared if the identified risk appears. This involves plotting a course of action or strategies to prevent the risk from derailing the project or to reduce its impact on the project. 'Ignoring the risk as it is outside the project team's control' is not the best course of action, it's always better to prepare for risk regardless of whether it's within or outside the team's control. 'Making a formal complaint to the city's officials' may not result in a prompt resolution and could create additional delays. Finally, 'Changing the project location to avoid dealing with the city's permit process' is not a sound course of action as it's likely to increase costs, require significant time, more permits and could create new risks.

Correct Answer: Perform a detailed qualitative analysis to understand the root causes and potential impacts of the risk.

The best course of action for managing a high-impact but low-probability risk is to perform a detailed qualitative analysis to understand the root causes and potential impacts of the risk. This allows the project team to gather more information about the risk, assess its triggers, and evaluate the consequences if it were to occur. By conducting a thorough analysis, the team can make an informed decision on how to handle the risk based on a deeper understanding of its characteristics. The other options are not ideal because they either suggest taking action without sufficient analysis (devising a mitigation plan without assessing triggers and consequences) or making judgments based on limited information (evaluating the risk based solely on historical data and assumptions, or prioritizing it based only on perceived impact while ignoring likelihood). A comprehensive qualitative risk analysis is crucial for low-probability, high-impact risks to ensure the project team has the necessary insights to develop an appropriate risk response strategy.