An organization performs an annual strategies and initiatives workshop during which a strengths, weaknesses, opportunities, and threats (SWOT) analysis is being conducted. As part of this process the functional managers identify the opportunities and threats.
What should the risk manager do next?
A. Add only the threats to the risk register
B. Utilize different tools to identify the risks
C. Plan risk responses to the threats
D. Update the risk register with the identified risks
Correct Answer: D
Explanation: The risk manager should update the risk register with both the opportunities and threats identified during the SWOT analysis. This will help in tracking and managing all potential risks throughout the project lifecycle. Update the risk register with the identified risks Comprehensive and Detailed Explanation: According to the PMI Risk Management Professional (PMI-RMP) Examination Content Outline1, one of the tasks in the domain of Risk Identification is to update the risk register with identified risks, causes, categories, and potential responses1. A risk register is a document used to track and report on project risks and opportunities throughout the project's life cycle2. In this scenario, the risk manager should update the risk register with the identified risks, both opportunities and threats, that result from the SWOT analysis. The risk manager should also include the causes, categories, and potential responses for each risk, as well as other relevant information such as probability, impact, priority, owner, etc. The risk manager should not add only the threats to the risk register, because opportunities are also a type of risk that can have a positive effect on the project objectives and should be recorded and managed accordingly3. The risk manager should not utilize different tools to identify the risks, because the SWOT analysis is a valid and useful tool for risk identification and there is no indication that it was insufficient or inappropriate for the project context4. The risk manager should not plan risk responses to the threats, because that is a separate process that comes after risk identification and requires further analysis and evaluation of the risks5. References: 1: PMI Risk Management Professional (PMI-RMP) Examination Content Outline, page 82: Risk Register in Project Management - Project Management Academy63: A Guide to the Project Management Body of Knowledge (PMBOK Guide) Sixth Edition, page 3974: How to Perform a SWOT Analysis - Project Risk Coach25: A Guide to the Project Management Body of Knowledge (PMBOK Guide) Sixth Edition, page 440.
Question 512:
The project manager performed' a variance analysis on the project during the execution phase. The variances were shown as increasing
What does this result imply?
A. The uncertainty and risk are increasing.
B. The project schedule is lagging behind.
C. There is no potential for future deviation.
D. The project is over budget.
Correct Answer: A
Explanation: Increasing variances during the execution phase imply that the uncertainty and risk are increasing, as the project performance is deviating from the planned values.
According to the PMBOK Guide - Sixth Edition1, variance analysis is a technique used to compare the actual performance of the project against the planned or expected performance. It can be applied to various aspects of the project, such as scope, schedule, cost, quality, and risk. Variance analysis can help identify deviations from the baseline and determine the causes and impacts of those deviations. If the variances are shown as increasing, it means that the actual performance is deviating more and more from the planned performance, which implies that the uncertainty and risk are increasing. This could affect the project objectives and deliverables, and require corrective or preventive actions to bring the project back on track. The other options are not correct, as they are either too specific (B and D) or contradictory ?to the result of the variance analysis. References : PMBOK Guide ?Sixth Edition, pages 262-263.
Question 513:
The project manager is reviewing the lessons learned from a previous similar project. The previous project was delayed due to the delay in delivery of a gas turbine generator (GTG). Construction of the previous project had to be shut down unexpectedly to wait for the late delivery of the GTG.
What should the project manager do first?
A. Include the risk in the register and communicate with the stakeholders.
B. Communicate with the client to provide the previous shutdown plan.
C. Review and update the project schedule.
D. Interview the other project manager to learn more details.
Correct Answer: A
Explanation: The project manager should first gather more information about the previous project's issues by interviewing the other project manager. This will help in understanding the root causes of the delay and how to prevent similar issues in the current project before taking further action.
The project manager should first include the risk of delay in delivery of the GTG in the risk register and communicate with the stakeholders about the potential impact and response strategies. This is part of the risk identification process, which is the first step in risk management. The risk register is a document that records the identified risks, their causes, effects, probabilities, impacts, and response plans. The project manager should communicate with the stakeholders to ensure that they are aware of the risk and its implications, and to obtain their feedback and support. The project manager should also update the risk register as new information becomes available or as the risk status changes. The other options are not the first actions that the project manager should take. Communicating with the client to provide the previous shutdown plan is part of the risk response process, which comes after the risk identification and analysis processes. Reviewing and updating the project schedule is part of the schedule management process, which is not directly related to risk management. Interviewing the other project manager to learn more details is a technique that can be used to identify risks, but it is not the first action that the project manager should take. The project manager should first document the risk in the risk register and communicate with the stakeholders before seeking more information from other sources. References: 3, 4, 5
Question 514:
A project manager realizes the team undertaking the project work has fallen behind the planned schedule. The risk manager identifies a new risk resulting from this delay and will need to understand how this will affect the project deadline.
Which kind of numerical analysis should be performed to understand the worst-case scenarios?
A. Earned value analysis
B. Qualitative risk analysis
C. Sensitivity analysis
D. Root cause analysis
Correct Answer: C
Explanation: sensitivity analysis is a technique that helps to determine which risks have the most potential impact on the project. It examines the extent to which the uncertainty of each project element affects the objective being examined when all other uncertain elements are held at their baseline values. Sensitivity analysis is often used to assess the risk exposure of the project schedule and cost, and to identify the critical risks that need to be managed. In this case, the risk manager needs to understand how the new risk resulting from the delay will affect the project deadline, which is the objective being examined. By performing sensitivity analysis, the risk manager can compare the relative importance and interaction of the new risk with other existing risks, and determine the worst-case scenarios for the project completion date. Sensitivity analysis can also help to prioritize risks for response planning and to develop contingency reserves. This is part of the Perform Quantitative Risk Analysis process in the PMBOK Guide2. References: 1: PMI Risk Management Professional (PMI-RMP) Examination Content Outline 2: A Guide to the Project Management Body of Knowledge (PMBOK Guide) Sixth Edition
Question 515:
During a risk identification session, the risk manager notices that subject matter experts (SMEs) are reluctant to participate because some risks could expose the poor maturity of processes in other business units. Which risk analysis technique should the risk manager use?
A. Strengths, weakness, opportunities, and threats (SWOT) analysis
B. Delphi technique
C. Decision tree analysis
D. Probability impact matrix
Correct Answer: B
Explanation: According to the PMI-RMP ontent Outline1, one of the tools and techniques for risk identification is the Delphi technique. This is a method of obtaining expert opinions anonymously and iteratively until a consensus is reached. The Delphi technique can help overcome the problem of SMEs being reluctant to participate in risk identification because it allows them to express their views without fear of criticism or confrontation from other participants. The Delphi technique can also reduce the influence of dominant or biased individuals and encourage honest and independent feedback. Therefore, the best answer is B. References: 1: PMI-RMP ontent Outline, page 8.
Question 516:
A project manager has been assigned to a project that is just starting. The organization has a very low risk appetite towards this project due to constraints on budget and schedule. The project stakeholders are very engaged on the project and want to ensure that there is clear visibility on the project risks and progress.
How should the project manager handle stakeholder expectations?
A. Add buffers to the schedule to accommodate risk.
B. Ensure the risk register includes all identified risks.
C. Discuss the risk response strategies with the stakeholders.
D. Develop a communication plan to share updates on risks.
Correct Answer: D
Explanation: The project manager should discuss the risk response strategies with the stakeholders to handle their expectations. This will help the project manager to align the risk responses with the stakeholder's risk appetite, preferences, and expectations. It will also help the project manager to obtain the stakeholder's support and approval for the risk responses. This is the best way to ensure clear visibility on the project risks and progress. Adding buffers to the schedule to accommodate risk (option A) is not a good practice, as it may create false expectations and hide the true impact of risk. Ensuring the risk register includes all identified risks (option B) is important, but it is not enough to handle stakeholder expectations. The project manager also needs to communicate the risk register to the stakeholders and discuss the risk responses with them. Developing a communication plan to share updates on risks (option D) is also a good practice, but it is not sufficient to handle stakeholder expectations. The project manager also needs to involve the stakeholders in the risk response planning process and obtain their feedback and approval. References: PMI, The Standard for Risk Management in Portfolios, Programs, and Projects, 2019, p. 97; PMI, A Guide to the Project Management Body of Knowledge (PMBOK Guide), 6th ed., 2017, p. 407. The project manager should develop a communication plan to share updates on risks (D) to handle stakeholder expectations, especially since the organization has a low risk appetite and stakeholders are very engaged. This approach ensures that stakeholders are regularly informed about the project's risks and progress, addressing their concerns and expectations. This is supported by the PMI's PMBOK Guide, Sixth Edition.
Question 517:
When selecting strategies as an activity of Plan Risk Response, what is the overall goal?
A. Select the strategies with the least overall impact to resources.
B. Select the strategies with the least financial impact.
C. Select the strategies with the greatest overall positive influence.
D. Select the strategies with the greatest benefit to stakeholders.
Correct Answer: C
Explanation: The overall goal of selecting strategies during the Plan Risk Response activity is to choose those strategies that have the greatest overall positive influence on the project, considering factors such as cost, schedule, and resources.
According to the PMI Risk Management Professional (PMI-RMP) Examination Content Outline1, one of the tasks in the domain of Risk Response is to select risk response strategies based on the risk appetite and tolerance of the organization and stakeholders1. The overall goal of selecting risk response strategies is to select the strategies with the greatest overall positive influence on the project objectives, such as scope, schedule, cost, quality, etc. The risk response strategies should aim to enhance the opportunities and reduce the threats to the project, while considering the cost-benefit analysis, the feasibility, and the alignment with the project goals and stakeholder expectations2. The risk response strategies should not be selected based on the least overall impact to resources, because that may not be the most effective or efficient way to address the risks, and it may ignore the potential benefits of some strategies that may require more resources but also deliver more value3. The risk response strategies should not be selected based on the least financial impact, because that may not be the most relevant or comprehensive criterion to evaluate the risks, and it may overlook other aspects of the project, such as quality, customer satisfaction, reputation, etc. that may also be affected by the risks4. The risk response strategies should not be selected based on the greatest benefit to stakeholders, because that may not be the most realistic or achievable goal, and it may create conflicts or trade-offs among different stakeholder groups that may have different or competing interests, needs, and expectations5. References: 1: PMI Risk Management Professional (PMI-RMP) Examination Content Outline, page 102: A Guide to the Project Management Body of Knowledge (PMBOK Guide) Sixth Edition, page 4403: A Guide to the Project Management Body of Knowledge (PMBOK Guide) Sixth Edition, page 4414: A Guide to the Project Management Body of Knowledge (PMBOK Guide) Sixth Edition, page 4425: A Guide to the Project Management Body of Knowledge (PMBOK Guide) Sixth Edition, page 518.
Question 518:
A risk manager was recently hired to assist with a mid-sized infrastructure project. The risk manager becomes aware that they have an inexperienced project team.
What two items should the risk manager have their team review in order to prepare for an upcoming risk identification workshop? (Choose two.)
A. Scope of work and requirements
B. Monte Carlo analysis from a similar project
C. List of pre-approved contractors
D. Organization chart for city permit department
E. Risk management plan
Correct Answer: AE
Explanation: The risk manager should have their team review the scope of work and requirements to ensure they understand the project's objectives and deliverables. Additionally, reviewing the risk management plan will help the team understand the risk management process, roles, and responsibilities, and prepare for the risk identification workshop. According to the PMBOK Guide - Sixth Edition1, the scope of work and requirements are key inputs for the risk identification process, as they define the project boundaries, deliverables, assumptions, and constraints. The risk management plan is also an essential input, as it provides the guidelines and framework for how risk management will be performed throughout the project. The other options are not relevant for risk identification, as they are either related to other processes (such as Monte Carlo analysis for quantitative risk analysis) or not directly related to the project risks (such as the list of pre-approved contractors or the organization chart for city permit department). References: PMBOK Guide Sixth Edition, pages 397-398.
Question 519:
A company in the mining industry accommodates a lot of innovation and changing work conditions. Because of this, the company experiences difficulty in predicting long term business plans.
How should a professional risk manager manage the risks in such situations?
A. Adopt a predictive approach to manage the risks.
B. Adopt agile approaches to manage the risks.
C. Utilize proper documentation to help manage the risks.
D. Conduct weekly risk management meetings with all stakeholders.
Correct Answer: B
Explanation: In a company with rapidly changing work conditions and difficulty in predicting long-term business plans, a professional risk manager should adopt agile approaches to manage the risks (B). Agile approaches allow for flexibility, adaptability, and quick response to changes, making them suitable for managing risks in such situations. This is supported by the PMI's PMBOK Guide, Sixth Edition, and the Agile Practice Guide. A professional risk manager should adopt agile approaches to manage the risks in situations where the company accommodates a lot of innovation and changing work conditions, and experiences difficulty in predicting long term business plans. Agile approaches are adaptive, iterative, and collaborative methods that focus on delivering value and reducing uncertainty in a dynamic and complex environment. Agile approaches can help the risk manager to identify, analyze, respond, and monitor risks in a flexible and timely manner, by using tools and techniques such as risk-adjusted backlog, risk burndown charts, risk-based spike, and risk-based testing. Agile approaches can also help the risk manager to engage the stakeholders and the project team in risk management activities, by using practices such as daily stand-up meetings, sprint planning, sprint review, and sprint retrospective. Agile approaches can enable the risk manager to manage the risks effectively and efficiently, by aligning the risk management strategy with the project goals and the customer needs. Adopting a predictive approach to manage the risks is not the best option, as it may not be suitable or feasible for situations where the project scope, schedule, and budget are uncertain or variable. A predictive approach is a plan-driven and sequential method that relies on upfront planning and detailed documentation to manage the risks. A predictive approach may not be able to cope with the frequent changes and emerging risks that may occur in an innovative and dynamic environment. Utilizing proper documentation to help manage the risks is not the best option, as it may not be sufficient or effective for situations where the project requirements and deliverables are evolving or changing. Proper documentation is a useful and necessary component of risk management, but it is not a substitute for agile risk management practices. Proper documentation may not be able to capture and communicate the current and relevant information about the risks and their impacts in a timely and accurate manner. Conducting weekly risk management meetings with all stakeholders is not the best option, as it may not be optimal or efficient for situations where the project risks and opportunities are changing rapidly or frequently. Weekly risk management meetings are a common and beneficial practice for risk management, but they may not be enough or appropriate for agile risk management. Weekly risk management meetings may not be able to address the risks and their responses as soon as they arise or occur, and they may not be able to involve all the relevant and available stakeholders and project team members. References: 3, 4, 5
Question 520:
After starting a new pipeline project, a risk manager schedules an initial meeting with the project sponsor. For the meeting, the project sponsor requests a presentation of the risks that have the most impact on achieving the project objectives.
What should the risk manager do to facilitate the sponsor's ask?
A. Monte Carlo analysis
B. Qualitative risk analysis
C. Sensitivity analysis
D. Quantitative risk analysis
Correct Answer: C
Explanation: Quantitative risk analysis helps to numerically analyze the probability and impact of risks on project objectives. By performing quantitative risk analysis, the risk manager can present the risks with the most impact on achieving the project objectives to the project sponsor. (Reference: PMBOK Guide, 6th Edition, p. 423) According to the PMI Risk Management Professional (PMI-RMP) Reference Materials, sensitivity analysis is a type of probabilistic analysis that determines how sensitive the results of the analysis are to uncertainties in input variables. Sensitivity analysis determines which uncertainty has the greatest potential for an impact on the project objectives, such as cost, schedule, scope, or quality1. In this case, the risk manager should use sensitivity analysis to facilitate the sponsor's ask, as it will help to identify and present the risks that have the most impact on achieving the project objectives. Sensitivity analysis can also show how the project objectives will vary with the changes in the input variables, such as the probability and impact of risks2. Sensitivity analysis can be performed using various tools and techniques, such as tornado diagrams, spider charts, or influence diagrams3. References: 1: PMI, A Guide to the Project Management Body of Knowledge (PMBOK Guide), Sixth Edition, 2017, p. 403 2: PMI, Practice Standard for Project Risk Management, 2009, p. 95 3: Quantitative Risk Analysis in Project Management - PM-Training
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