Negative Risks (Threats)

Correct Answer: Develop a contingency plan that outlines the steps to be taken if the risk occurs, and allocate resources to implement the plan

The most appropriate response strategy for a negative risk with a low probability of occurrence but severe impact is to develop a contingency plan. This plan should outline the steps to be taken if the risk materializes and allocate resources to implement the plan. Accepting the risk and taking no proactive measures is not the best approach, as the severe impact could significantly affect project objectives if the risk occurs. Transferring the risk to a third party may not be feasible or cost-effective, especially if the probability of occurrence is low. Mitigating the risk by reducing its probability of occurrence may not be the most effective strategy, as the focus should be on managing the potential severe impact rather than the low probability.

Correct Answer: Develop a contingency plan to secure additional labor resources from alternative sources in the event of a shortage.

The most appropriate response strategy to address the risk of labor shortages is to develop a contingency plan to secure additional labor resources from alternative sources in the event of a shortage. This proactive approach allows the project manager to be prepared for the potential risk and have a plan in place to mitigate its impact on the project schedule. By identifying alternative labor sources in advance, the project can quickly adapt and minimize delays should the risk occur. Accepting the risk and continuing as planned is not advisable given the high probability of the risk occurring and its significant potential impact on the project schedule. Transferring the risk to the project sponsor is not an effective strategy, as it is the project manager's responsibility to manage risks and ensure the project's success. Offering higher wages and benefits to attract and retain skilled labor could be a viable mitigation strategy, but it may not be the most cost-effective solution and could set an unsustainable precedent for future projects.

Correct Answer: Negative risks

The correct answer is 'Negative risks'.

In project management, negative risks are uncertain events or conditions that, if they occur, can have a negative effect on one or more project objectives. These are potential problems or threats that could impact the project's success in terms of scope, schedule, cost, or quality.

Explanation of other options:

'Positive risks' are actually opportunities that could benefit the project if they occur. They are not associated with negative effects on project objectives.

'Opportunities' are potential positive events that could bring advantages to the project. They are the opposite of negative risks and are sought after in project management.

'Constraints' are limitations or restrictions placed on the project, such as budget, schedule, or resources. While they can affect project objectives, they are not uncertain events or conditions, but rather known factors that must be managed throughout the project lifecycle.