Risk Probability and Impact Assessment

Correct Answer: Expert judgment combined with structured interviewing techniques

Expert judgment combined with structured interviewing techniques is the most reliable approach when dealing with limited historical data because: 1. It leverages the knowledge and experience of subject matter experts who have dealt with similar situations 2. Structured interviewing techniques ensure consistent and methodical data collection 3. It allows for qualitative insights that may not be captured in limited numerical data 4. The approach can incorporate multiple expert perspectives to reduce individual bias Why other approaches are less effective: - Statistical analysis across organizations requires extensive historical data, which is stated as limited in this scenario - Random sampling and Monte Carlo simulations need significant data points to generate meaningful results - Weighted averages from previous patterns also require substantial historical data to be reliable In situations with limited historical data, relying on expert judgment through structured methods provides the most practical and reliable way to assess risk probabilities.

Correct Answer: Bow-tie analysis to map interconnected risk chains

Bow-tie analysis is the most appropriate technique for qualifying indirect risks with cascading effects because: 1. It specifically focuses on visualizing and analyzing interconnected risk chains and their relationships 2. It maps both causes and consequences in a clear visual format 3. It helps identify how one risk can trigger multiple secondary risks 4. It enables teams to see prevention and mitigation controls across the risk chain Why other options are less suitable: Monte Carlo simulation is better for quantitative analysis of known risks and their probabilistic outcomes, not for qualifying indirect risk relationships. Decision tree analysis focuses on sequential decision points and their outcomes, but doesn't effectively capture multiple interconnected risk relationships simultaneously. Root cause analysis with expert judgment is more focused on finding the origin of specific problems rather than mapping complex risk interconnections and their cascading effects.

Correct Answer: By calibrating the impact scales based on stakeholder thresholds and preferences

Calibrating impact scales based on stakeholder thresholds and preferences is the most effective approach for Risk Probability and Impact Assessment because: 1. It acknowledges that different stakeholders have varying tolerance levels for different types of risks 2. It allows for customization of risk assessment to match specific project and organizational contexts 3. It enables more accurate and relevant risk evaluation aligned with stakeholder expectations The other options are incorrect because: Using standardized industry risk matrices regardless of stakeholder input fails to consider unique organizational contexts and specific stakeholder requirements. Implementing a fixed numerical scoring system based on historical data does not account for current stakeholder perspectives and changing risk tolerance levels. Calculating average risk tolerance creates an artificial middle ground that may not truly represent any stakeholder's actual risk tolerance, potentially leading to poor risk management decisions.