Which of the following tools would you use to choose the appropriate risk response?

You are the project manager of a project in Bluewell Inc. You and your project team have identified several project risks, completed risk analysis, and are planning to apply most appropriate risk responses.

Which of the following tools would you use to choose the appropriate risk response?
A . Project network diagrams
B . Cause-and-effect analysis
C . Decision tree analysis
D . Delphi Technique

View Answer

Answer: C

Explanation:

Decision tree analysis is a risk analysis tool that can help the project manager in determining the best risk response. The tool can be used to measure probability, impact, and risk exposure and how the selected risk response can affect the probability and/or impact of the selected risk event. It helps to form a balanced image of the risks and opportunities connected with each possible course of action. This makes them mostly useful for choosing between different strategies, projects, or investment opportunities particularly when the resources are limited. A decision tree is a decision support tool that uses a tree-like graph or model of decisions and their possible consequences, including chance event outcomes, resource costs, and utility.

Incorrect Answers:

A: Project network diagrams help the project manager and stakeholders visualize the flow of the project work, but they are not used as a part of risk response planning.

B: Cause-and-effect analysis is used for exposing risk factors and not an effective one in risk response planning.

This analysis involves the use of predictive or diagnostic analytical tool for exploring the root causes or factors that contribute to positive or negative effects or outcomes.

D: Delphi technique is used for risk analysis, i.e., for identifying the most probable risks. Delphi is a group of experts who used to rate independently the business risk of an organization. Each expert analyzes the risk independently and then prioritizes the risk, and the result is combined into a consensus.