Contingency Planning and Reserves

Correct Answer: Apply contingency based on the critical path risk exposure

When allocating Schedule Contingency in projects with parallel activities, basing it on critical path risk exposure is most effective for several reasons: 1. The critical path determines the overall project duration 2. Risk exposure on the critical path has the highest potential impact on project completion 3. This approach focuses resources where they matter most 4. It allows for risk-based decision making Other approaches are less effective because: Adding equal buffers to all paths wastes resources on less critical activities and may not provide adequate protection where needed most. Distributing contingency based solely on activity duration fails to consider risk levels and complexity. Basing contingency on the number of activities does not account for complexity, duration, or risk levels of individual activities.

Correct Answer: Evenly across all critical path activities based on duration

When all critical path activities have equal risk exposure, the most appropriate way to distribute schedule contingency is evenly across all critical path activities based on their duration. This approach is logical and fair because: 1. Equal risk exposure means each activity has the same probability and impact of risk 2. Duration-based distribution ensures time buffers are proportional to activity length 3. This method maintains the project's critical path integrity The other options are less suitable because: Distributing based on cost and resources doesn't align with schedule risk management principles when risk exposure is equal. Using complexity levels as a distribution factor contradicts the premise that all activities have equal risk exposure. Stakeholder preferences and historical metrics should not override the mathematical reality of equal risk exposure across activities.

Correct Answer: Analyze risk event impacts and adjust contingency based on remaining risk exposure

The best approach to reassessing Schedule Contingency when unexpected risk events materialize is to analyze risk event impacts and adjust contingency based on remaining risk exposure. This is the most appropriate response because: - It follows proper risk management principles by evaluating actual impacts - It considers the current project situation - It allows for dynamic adjustment based on real data - It maintains focus on remaining risks that could still impact the project The other options are incorrect because: Maintaining original contingency allocation is rigid and fails to adapt to actual project conditions and emerging risks. Redistributing contingency equally among all activities is not risk-based and fails to account for varying risk levels in different activities. Applying contingency to each risk event as it occurs is reactive rather than proactive, and does not properly manage remaining risk exposure.