Risk Analysis

Correct Answer: Progressive elaboration of risks through iterative risk reviews

In a rolling wave planning environment, the most appropriate risk analysis practice is progressive elaboration of risks through iterative risk reviews. This approach perfectly aligns with the dynamic nature of rolling wave planning because: - It allows for continuous discovery and assessment of risks as more project details emerge - It matches the iterative nature of rolling wave planning - It enables the team to adapt and refine their risk assessment as new information becomes available The other options are less suitable because: - Continuous monitoring with extensive documentation from previous iterations can be too bureaucratic and may not adapt quickly enough to new situations - Using predetermined thresholds and static matrices is too rigid for a dynamic environment where new risks emerge regularly - Monthly assessments with fixed criteria are too structured and infrequent for a rolling wave approach, which requires more frequent and flexible risk evaluation

Correct Answer: Delphi Method with structured risk rating criteria

The Delphi Method with structured risk rating criteria is the most appropriate technique for standardizing risk scores in this scenario for several reasons: Key benefits of Delphi Method: - Eliminates individual bias through anonymous feedback - Uses structured criteria to ensure consistent evaluation - Achieves consensus through iterative rounds - Prevents dominant personalities from influencing others - Creates a standardized framework for assessment Why other options are less suitable: Weighted average based on experience can introduce more bias and may not reflect true risk levels, as years of experience doesn't always correlate with better risk assessment. Monte Carlo simulation is useful for quantitative analysis of known variables but isn't designed to resolve differences in subjective risk assessments. A risk score normalization matrix with peer review could lead to groupthink and may be influenced by stronger personalities in direct discussions.

Correct Answer: Monte Carlo simulation

Monte Carlo simulation is the most effective method for assessing correlation between multiple simultaneous risks because: 1. It can handle multiple variables and their interactions simultaneously 2. It runs thousands of scenarios considering different risk combinations 3. It provides statistical distributions of possible outcomes 4. It accounts for complex relationships and dependencies between risks 5. It gives quantitative results that can be used for decision-making Why other options are less effective: Probability impact matrices, while useful for individual risks, become complex and potentially inaccurate when dealing with multiple correlated risks. Decision tree analysis is better suited for sequential decisions rather than simultaneous risks, and becomes unwieldy with multiple correlated risks. Bayesian network analysis, while powerful for conditional probabilities, is more complex to implement and may be less intuitive for project stakeholders to understand compared to Monte Carlo simulation.