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Risk Management

5 minutes 5 Questions

Risk Management is a systematic process of identifying, assessing, and responding to uncertainty and potential risks that can affect project objectives. The goal is not only to minimize potential negative effects but also to capitalize on opportunities. A project manager should integrate risk manag…

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PMP - Risk Management Example Questions

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Question 1

You are coordinating a project to develop a new piece of software. During a risk identification session, your team identifies that a new technology that is critical to the project development might not be delivered on schedule. What is your best course of action?

Correct Answer: Develop a contingency plan to switch to another technology or modify the project schedule to account for the delay.

The best course of action when a critical technology might not be delivered on schedule is to develop a contingency plan. A contingency plan allows for a proactive strategy to address potential risks. It could be switching to another technology or modifying the project schedule to account for the delay, thereby reducing the impact of the delay on project completion. The other options are not the best course of actions: Informing the client about a likely delay without doing anything at this stage would not be professional project management practice. Simply hoping that the technology would be delivered on time does not address the risk identified and cancelling the project because of a potentially delayed delivery is too drastic and should be considered only when all other options have been exhausted.

Question 2

Within ITIL 4, how can a company identify and evaluate the potential risks associated with implementing a new software application?

Correct Answer: Perform a risk assessment

A risk assessment is the process of identifying, evaluating, and prioritizing risks. The other options do not directly focus on evaluating potential risks.

Question 3

You're planning a new building project. During risk identification, you recognize the risk that an earthquake might occur. What is the best risk response strategy?

Correct Answer: Mitigation - Follow building codes for seismic design.

The best strategy in this case would be 'Mitigation - Follow building codes for seismic design.' This means taking ample measures to reduce the level of risk. Just merely accepting the risk (Acceptance - Assume the risk of damage from potential earthquakes) is not the key role of a project manager without implementing measures to reduce it. Avoidance - Do not construct the building is not the best approach, as it suggests not carrying out the project at all. Transference - Have another firm take the risk of damage suggests shifting the responsibility, which isn't the project manager's prerogative. They're supposed to manage the risk, not merely shift it to others. Therefore, mitigating the risk by following building codes for seismic design is the best strategy for risk management planning in this scenario.

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