Probability and Impact Matrix

Correct Answer: Establish a contingency plan and alternative suppliers

The risk score is calculated as the product of the probability of occurrence and the impact rating, which is 0.7 multiplied by 5, yielding a risk score of 3.5. Given the relatively high risk score, taking proactive measures is important. The first answer, which involves establishing a contingency plan and alternative suppliers, is the most suitable course of action, as it minimizes the potential disruptions to the project if the original suppliers are unable to deliver on time. Paying extra for expedited delivery is not a reliable solution, as it doesn't guarantee the materials will arrive on time and might result in unnecessary cost escalation. Ignoring the risk and dealing with it when it occurs is a poor management approach that could lead to significant project delays or cost overruns. And finally, stockpiling all construction materials in advance can be difficult due to space constraints and could also result in inflated project costs without any assurance of preventing delays.

Correct Answer: Monitor the risk and develop a cross-skilling plan

The risk score can be calculated by multiplying the probability of the risk occurring by the impact it would have on the project. That is 0.3 (probability) times 6 (impact) which equals 1.8. In project management, risks with scores below 2 are considered 'tolerable', meaning the project team should monitor the risk but no immediate action is necessary. Hence, 'Monitor the risk and develop a cross-skilling plan' is the best answer. Here is why the other options are not the best: 'Ignore the risk and continue the project' is not a good strategy because it doesn't prepare the team for the possibility that the key team member may quit. 'Fire the team member before he can quit' is also not appropriate as it creates a negative work environment and may lead to other team members quitting. 'Hire a new team member immediately' could cause unnecessary costs if the key team member doesn't quit and it doesn't address the fact that the existing team members may need to develop new skills (cross-skilling).

Correct Answer: Research the certification process and prepare for it

The risk score can be calculated by multiplying the probability with the impact, which results in 0.4 * 3, coming up to a score of 1.2. In risk management, the higher the score, the higher the potential risk, needing more attention. A score of 1.2 isn’t negligible, so you should take some steps to mitigate the risk. The action of 'Research the certification process and prepare for it' is the most appropriate as it is about being proactive and managing the risk before it becomes an issue. 'Ignore the risk and launch the product', 'Postpone the product launch indefinitely', and 'Hire more staff to cover for this risk' are incorrect responses. Ignoring a calculable risk is bad practice in project management. Postponing the product launch indefinitely due to one risk isn't efficient - it's best to manage the risk instead. Hiring more staff doesn't actually address the identified risk which lies in the lack of a required certification, not the lack of manpower.