Risk Response Planning

Correct Answer: Mitigation

The correct answer is 'Mitigation'. Mitigating a risk involves taking steps to reduce the impact or likelihood of the risk. In this case, building an ejection system is a way to lessen the impact of the potential risk (rocket failure due to an engine issue). Acceptance implies that no action is taken to reduce the risk. Instead, the team is ready to accept the consequences if the risk occurs. This is clearly not the case in this scenario. Avoidance indicates a complete modification of the plan to entirely avoid the risk, which also doesn't apply to this example since the original plan (launching a rocket) is still proceeding. Transfer means passing the risk to a third party, often through insurance or outsourcing, which is also not applicable in this case.

Correct Answer: Mitigate

In the given scenario, the correct risk response is 'Mitigate'. This means that you are proactively taking steps to reduce the likelihood or impact of the risk. By hiring a compliance consultant that specializes in the recent regulation changes, you're decreasing the probability of not meeting the new requirements, which is indeed a risk mitigation strategy. The other options, 'Accept', 'Avoid', and 'Transfer', are incorrect in this context. 'Accept' means that you acknowledge the risk but decide not to do anything about it, which clearly doesn't apply here. 'Avoid' means you change your plans to bypass the risk altogether, which isn't applicable as you're still pursuing the project. 'Transfer' means that you offload the risk to a third party, typically through insurance or outsourcing, which isn't what is happening when you hire a consultant to help navigate regulations.

Correct Answer: Accept

In the scenario described in the question, the team has decided to proceed with the original project plan despite the identified risks of potential delays and higher costs due to complexity and strict regulations. They have also decided to closely monitor the project. This is known as 'Accept' strategy in risk management. This term is used when the project team decides to acknowledge the risk and prepare a contingency plan. The 'Accept' strategy is often chosen when the risks are inherent to the project or when the cost of other strategies outweighs the benefits. The teams do not attempt to reduce, share or eliminate the risk, instead, they continue with the project as planned while trying to minimize the impact or likelihood of the risk. The other options offered: 'Mitigate', 'Transfer' and 'Avoid' are all different risk management strategies. 'Mitigate' would mean actions are taken to reduce the impact of the risk, 'Transfer' would involve passing the risk to a third party and 'Avoid' would mean changing the project plan to circumvent the risk- none of these strategies are chosen in the given scenario as they have decided to proceed with the original plan instead of trying to lessen or eliminate the risk through these strategies.