Risk-Cost Benefit Analysis

Correct Answer: Compare the cost of the tool with the potential impact and savings from the risk mitigation.

The best approach in this scenario, as a Scrum Master, is to 'Compare the cost of the tool with the potential impact and savings from the risk mitigation.' This approach aligns with the principles of Agile and Scrum, which advocate for iterative development and value-driven delivery. It also ensures a cost-effective use of resources while addressing business risks effectively. The other answers are not as effective: - 'Purchase the tool regardless of the cost.' lacks a strategic vision as it doesn't consider the return on investment (ROI). - 'Reject the idea as it's too expensive.' is also unsuitable, it dismisses a possible solution without analyzing its potential benefits. - 'Buy the tool and increase the budget to cover its cost.' is not always possible as the budget may not be flexible. Again, this doesn't consider the potential benefits of the tool versus its cost.

Correct Answer: Evaluate the potential risk reduction against the potential cost increase, seeking input from all team members.

The best approach as a Scrum Master would be to 'Evaluate the potential risk reduction against the potential cost increase, seeking input from all team members'. This takes into account both factors of risk and cost, and includes team members in the decision thereby adhering to Scrum principles of team collaboration. The other answers are wrong: 'Going with the most expensive option, assuming that it will minimize the most risks' might lead to unnecessary costs and does not consider a balanced approach. 'Ignoring the risks and focusing on minimizing the costs' is not practical as it overlooks potential risks that could disrupt the project. And finally, 'Choosing the option with the minimal risk without considering cost implications' could lead to an overly expensive option being chosen without regards to budget limitations.

Correct Answer: The risk should be monitored closely and contingency plans developed

In a risk-cost benefit analysis, risks with high impact but low probability should be monitored closely and contingency plans should be developed. Ignoring the risk entirely due to its low likelihood is not advisable, as the high impact could be devastating if it does occur. Immediately allocating resources to mitigate the risk regardless of costs is also not the best approach, as it may divert resources from other important tasks and the low probability of occurrence may not justify the expense. Giving the risk the highest priority for mitigation efforts, even at the expense of other tasks, is also not optimal. The best approach is to monitor the risk closely, have contingency plans in place, and be prepared to act if the probability of occurrence increases.