Risk Breakdown Structure (RBS)

Correct Answer: Update the RBS by adding a new category for environmental risks and include the identified risk under that.

In project management, whenever a new risk is identified, it should be added to the Risk Breakdown Structure (RBS) regardless of whether the RBS was initially or post developed. Therefore, updating the RBS by adding a new category for environmental risks and including the identified risk under that - is the correct approach. The other approaches in the answers are incorrect - Ignoring the risk, including under non-related risks like technical risks or stopping the project completely are not considered good project management practice. Any risk identified must be addressed appropriately to ensure successful project completion.

Correct Answer: Each risk category contains 3-5 subcategories that align with project objectives

The optimal balance in a Risk Breakdown Structure (RBS) is achieved when each risk category contains 3-5 subcategories that align with project objectives. This is considered best practice because: - It provides sufficient detail to capture relevant risks while avoiding over-complexity - The range of 3-5 subcategories allows for clear categorization and manageability - Alignment with project objectives ensures practical relevance and usefulness The other options are incorrect because: Extensive subcategories across multiple domains can make the RBS overly complex and difficult to manage effectively. Equal distribution of risks at every level is impractical as different risk areas naturally have varying complexity levels and risk exposure. Arranging risks solely based on impact sequence does not consider the hierarchical nature and categorization purpose of an RBS, which should focus on logical grouping and organizational structure rather than sequential ordering.

Correct Answer: Risks should be placed at the lowest level where they can be effectively managed and monitored

In a Risk Breakdown Structure (RBS), risks should be placed at the lowest level where they can be effectively managed and monitored. This is the most practical and efficient approach because: 1. It ensures risks are managed at the most appropriate organizational level 2. It allows for effective delegation of risk management responsibilities 3. It maintains clear accountability and control 4. It enables efficient resource allocation for risk response The other options are incorrect because: Forcing all risks to the bottom level is impractical and may lead to unnecessary complexity and inefficient management. Distributing risks equally across levels artificially constrains the RBS structure and doesn't reflect the natural hierarchy of risks. Positioning risks based solely on impact level misunderstands the purpose of RBS, which should reflect where risks can be best managed rather than their severity.