ITPEC IP October 2023 Question 52
The response measure for risks in a project can be classified as avoidance, mitigation, acceptance, and transfer. In a system development project, the design and development process is to be subcontracted to Company A. In a previous system development, Company A suffered a delay for delivery, so it is also possible that a delay will occur in this project. Which of the following is a response measure that corresponds to mitigation of the risk of a delay?
Explanation
Analysing the cause of Company A's previous delay and building preventive measures into the plan — mitigation lowers the likelihood or impact of a risk while still taking it.
The design and development stay with Company A, so the risk is kept, but finding out why the last delivery slipped and planning countermeasures (closer progress checks, earlier milestones, extra review) makes a delay less likely. That is risk mitigation.
Answer (a)
Why not others:
- •(b) — cancelling the subcontract removes the source of the risk altogether: avoidance
- •(c) — a compensation clause shifts the financial consequences of a delay to Company A: transfer
- •(d) — budgeting the cost of dealing with a delay prepares for it without reducing it: acceptance (a contingency reserve)
Key rule: Avoidance removes the cause, mitigation reduces probability or impact, transfer moves the consequences to another party, acceptance takes the risk and prepares a reserve.
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