Contingency Planning

Correct Answer: 1:3 - Each risk should have primary, secondary, and fallback strategies

The optimal ratio of 1:3 for identified risks to contingency strategies is considered best practice in risk management because: A comprehensive contingency plan requires multiple layers of response strategies: - Primary strategy as the main response - Secondary strategy if the primary proves ineffective - Fallback strategy as final safety net This three-tiered approach ensures: 1. Maximum coverage for each risk 2. Flexibility in response 3. Depth of planning 4. Better preparation for various scenarios The other ratios are inadequate because: A 1:2 ratio provides insufficient backup options for complex risks A 1:4 ratio creates unnecessary complexity and may lead to analysis paralysis A 1:1 ratio is too simplistic and leaves organizations vulnerable if the single strategy fails

Correct Answer: Regular testing and validation of each backup strategy through scheduled simulations

Regular testing and validation through scheduled simulations is the most strategic approach because: 1. It provides proactive verification of backup plan effectiveness 2. Allows for identification of potential issues before actual emergencies 3. Enables teams to practice and refine their response procedures 4. Provides measurable data on system recovery capabilities 5. Helps maintain readiness and validates assumptions The other options are less effective because: Historical analysis is reactive and may not reflect current system configurations or threats. Calculating success percentages only provides statistics but doesn't guarantee future performance or identify improvement areas. Measuring time differences focuses too narrowly on speed rather than comprehensive effectiveness and doesn't account for varying scenario complexities.

Correct Answer: The level of authority needed for each response tier

In developing a contingency plan's escalation matrix for complex risks, the level of authority needed for each response tier is the primary consideration because: 1. It establishes clear decision-making hierarchies 2. It ensures appropriate authority levels can respond to risks efficiently 3. It prevents decision paralysis during crisis situations 4. It matches risk severity with corresponding authority levels Why other options are not optimal: Documenting all potential scenarios, while important, is secondary to establishing clear authority levels, as not all scenarios can be predicted. Budget allocation is a constraint to consider but not the primary factor in establishing an escalation matrix. Detailed communication channels are important but serve as a supporting element to the authority structure rather than being the primary consideration.