Risk response question clarification

Discussion in 'PMP' started by Surbhi Bhandari, Aug 6, 2019.

  1. Surbhi Bhandari

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    Hi Tim,

    Please help explain for the below question why option A is the correct answer? The question clearly states that the team cannot find an efficient way to insure and also there is no suitable company to outsource the work which possibly means we have already identified ways to transfer the risk with no success? In such case do we not accept the risk?

    Simulation Test Paper 06 - PMP_2018 - Question 179

    While identifying risks in your project, your team cannot find an efficient way to reduce the impact and probability or to insure against one of the risks. The relevant work is integral to the project; thus, you cannot simply remove the work package. There is no suitable company to outsource the work to either. What is the best course of action in this situation?

    SELECT THE CORRECT ANSWER

    a) Identify ways to transfer the risk
    b) Accept the risk and have contingency reserves
    c) Identify ways to avoid the risk
    d) Keep looking for ways to mitigate the probability and impact of the risk
    Correct Option:A (EXPLANATION - Transferring risk may increase costs but will assist in moving the risk from the primary to another group or entity, lowering the overall risk exposure.)
     
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  2. tim jerome

    tim jerome Well-Known Member
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    This is problem 179 in practice exam 6.
    Options
    -------
    A) Transfer
    B) Accept (do nothing)
    C) Avoid (change the plan)
    D) Mitigate (minimize %, impact, both)

    No way to mitigate (D eliminated)
    No way to transfer (A eliminated... or is it?)
    No way to avoid (C eliminated)
    No way to outsource(A eliminated - again)

    B is effectively, "do nothing - with a fallback plan." This seems reasonable.

    Let's see what the PMBOK says - (starts p. 442)

    'Avoid' strategies are good when you have high-priority threats with a high probability of occurrence and a high negative impact. This *removes* the threat.

    'Transfer' strategies shift ownership. If A were only referenced as insurance, I'd select it, since Transfer is much more; however, Outsourcing also demonstrates Transference.

    'Mitigate' minimizes, but does not remove all the threat.

    I see myself seeing the logic of B - "do nothing with a contingency (backup) plan." I could also see a question author writing 'best course of action', which often represents the best possible option. It may not be practical (with the details laid out as they are), but it is indeed the best.

    What do the rest of you think?
     
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  3. Surbhi Bhandari

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    Thank you Tim.

    My understanding is the same and thus I choose option B, however it showed as an incorrect answer suggesting option A as the correct one.

    Someone from the practice exam setting team may need to check and make correction as necessary?
     
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  4. tim jerome

    tim jerome Well-Known Member
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    We are constantly reviewing material; this is one that is tricky - for the wrong reasons. Yes - this is a question to be raised.
     
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  5. _49203

    _49203 Active Member

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  6. Surbhi Bhandari

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    How do I raise it with the learning/support team Tim?
     
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  7. _49203

    _49203 Active Member

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    Just to be clear - B is the correct answer?

    That is what I would select.......
     
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  8. Surbhi Bhandari

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    Yes option B seems to be the correct answer.
     
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  9. _49203

    _49203 Active Member

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    Thank you, Surbhi
     
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