Risk Response Planning

Correct Answer: Expected Monetary Value (EMV)

Expected Monetary Value (EMV) is the most appropriate metric here because: 1. EMV combines both cost and probability (success rate) into a single evaluation metric 2. It allows for straightforward comparison between different options with varying costs and success rates 3. EMV helps quantify the value of each option considering both their investment and likelihood of success 4. It's a standard project management tool for comparing risk response options The other answers are less suitable because: Benefit-Cost Ratio with sequential implementation phases adds unnecessary complexity when the success rates and costs are already known. Risk-adjusted NPV with compounded probabilities would be overly complex for this scenario where we have simple, single-phase validation procedures. Weighted Average Success Rate only considers the probability aspect and leaves out the critical cost component, making it incomplete for this evaluation.

Correct Answer: Risk sharing strategy

The scenario describes a risk sharing strategy, where two companies enter into a partnership to share both the potential benefits and risks of the project. Key points that indicate risk sharing: 1. Formation of a partnership with another company 2. Sharing of both gains and setbacks 3. Collaboration to handle data privacy compliance Risk sharing is particularly appropriate when: - The risk is too large for one organization to handle alone - Both parties can benefit from the partnership - Expertise or resources can be combined effectively The other options are incorrect because: - Enhanced mitigation focuses on reducing negative impacts rather than sharing responsibility - Combined approach with monitoring describes a control strategy rather than a partnership arrangement - Risk acceptance would mean taking on the risk rather than sharing it with a partner This type of arrangement is common in complex technical projects where specialized expertise and shared responsibility can better manage significant risks.

Correct Answer: Create standardized templates with prioritized action steps and trigger points

The best approach for recording contingency plans in risk response planning documentation is to create standardized templates with prioritized action steps and trigger points. This is the most effective approach because: 1. Standardized templates ensure consistency in documentation 2. Prioritized action steps provide clear direction when risks occur 3. Trigger points help identify when to implement specific responses 4. This format is concise and actionable The other options are less effective because: - Detailed descriptions of every possible scenario would be overwhelming and impractical to maintain - Documenting all potential stakeholder reactions would be too time-consuming and speculative - Simply listing risk indicators chronologically doesn't provide clear response actions and may miss critical priority-based responses The key is to have a practical, actionable format that can be quickly referenced and implemented when needed.