The Project Notebook

PMP Challenge Question – 8/15

For the current PMP® Challenge Question, click on to download a schedule network diagram, compute key values, and answer some questions. [Note: I’ve been having a problem with the hosting of files. Please email me if you cannot download the file. I’m looking for a new site to host them.]

And here’s the answer to the 8/1 Challenge Question: What are the four primary risk mitigation strategies? Under what circumstances you would use to choose one over the others?

The four primary risk mitigation strategies and their uses are:

Accept — If a risk is not very likely to occur and has a very low impact, you might choose to accept the risk without further planning or development of a mitigation strategy. An example might be the risk of rain halting a construction project in the desert during the summer. If the unforeseen hour of rain happens, you just continue to move on with the project.

Share or Transfer — A risk that has a low to medium likelihood and a moderate impact may be transferred or shared. Purchase of an insurance policy or performance bond is an example of transference. If something happens, the insurance company or bond issuer absorbs the financial impact. As an alternative, we may partner with others who will share the cost. For example, if two organizations team up to offer an event and there is a financial loss, both partners might absorb half the loss.

Avoid — Any risk that is both very likely to occur and has a very large financial impact needs to be avoided. Wouldn’t you avoid an unfair bet? You may also want to consider avoiding risks where these is insufficient data to analyze, the benefits are not identified, a strategic objective is not supported, or there are too many possible outcomes.

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