A risk manager for a large project has completed documenting the risk management plan. The project is moving from planning to execution.
Which three actions should the risk manager take to ensure the risk management plan remains effective during the project timeframe? (Choose 3) A. Verify whether or not any identified risks might occur and implement the risk response plan.
B. Regularly check and report on the status of risks identified according to their prioritization.
C. Monitor the status and oversee execution of the risk response plan for each identified risk.
D. Ensure management reserves are sufficient to cover the mitigation plans for all identified risks.
E. Allocate and lock in project resources according to the initial risk prioritization for all identified risks.
Correct Answer: BCD
Explanation: According to the PMI-RMP ontent Outline1, one of the domains of the PMI-RMP certification is risk monitoring and reporting. This domain includes tasks such as "monitor and report on risk metrics and trends", "monitor
the status of risk response activities and update risk register and risk report accordingly", and "monitor and control project contingency and management reserves". These tasks imply that the risk manager should regularly check and report on
the status of risks identified according to their prioritization (B), monitor the status and oversee execution of the risk response plan for each identified risk ? and ensure management reserves are sufficient to cover the mitigation plans for all
identified risks (D). These actions will help the risk manager to ensure the risk management plan remains effective during the project timeframe.
Project stakeholders can often be risk averse with little to no knowledge of the risk process. How should a risk manager increase stakeholder risk appetite?
A. Exclude risk averse stakeholders from future risk discussions
B. Explain risk handling and mitigation strategies
C. Increase the impact of all risks in the risk breakdown structure (RBS)
D. Develop a generous probabilistic cash flow model
Correct Answer: B
Explanation: The risk manager should increase stakeholder risk appetite by explaining risk handling and mitigation strategies, which will help stakeholders understand how risks can be managed and reduced, making them more comfortable with the risk process. The best way to increase stakeholder risk appetite is to explain risk handling and mitigation strategies, which are the actions taken to reduce the probability and/or impact of risks, or to enhance the opportunities. By doing so, the risk manager can help the stakeholders understand how the risks can be managed effectively and efficiently, and how the potential benefits can outweigh the potential costs. This can also increase the stakeholder confidence and trust in the risk process and the project outcomes. The other options are not appropriate ways to increase stakeholder risk appetite. Excluding risk averse stakeholders from future risk discussions can alienate them and create conflicts. Increasing the impact of all risks in the risk breakdown structure (RBS) can exaggerate the risk exposure and create unnecessary fear and anxiety. Developing a generous probabilistic cash flow model can create unrealistic expectations and lead to poor decision making. References: PMI Risk Management Professional (PMI-RMP) Examination Content Outline and Specifications, page 81. A Guide to the Project Management Body of Knowledge (PMBOK Guide) Sixth Edition, pages 4034042.
Question 543:
While planning for project execution phase stakeholders are making decisions on how to respond to known and new risks. What artifact should the stakeholders prepare?
A. Issue log
B. Change log
C. Assumption log
D. Risk-adjusted back log
Correct Answer: D
The stakeholders should prepare a risk-adjusted backlog when making decisions on how to respond to known and new risks. A risk-adjusted backlog helps prioritize work items based on their risk level and potential impact on the project. A risk-adjusted backlog is an artifact that reflects the prioritization of the product backlog items based on their risk exposure. It is used to plan for the execution phase of an agile project, where the stakeholders can decide how to respond to known and new risks by selecting the most valuable and least risky items to deliver. A risk-adjusted backlog can help the stakeholders to optimize the value delivery and reduce the uncertainty of the project outcomes. References: PMI, The Standard for Risk Management in Portfolios, Programs, and Projects, 2019, p. 113; PMI, Agile Practice Guide, 2017, p. 54.
Question 544:
The project's customer has stated the project must be completed by a date indicated as the P90 date established on the Monte Carlo analysis. What should the project manager do to ensure the P90 date is met?
A. Update the assumptions/exclusions register
B. Hire more resources and crash the schedule
C. Perform a qualitative risk analysis for the project
D. Mitigate risks identified on the sensitivity analysis
Correct Answer: D
The project manager should mitigate risks identified on the sensitivity analysis to ensure the P90 date is met. Sensitivity analysis helps identify the most critical risks that have the potential to impact the project's completion date. By mitigating these risks, the project manager can increase the likelihood of meeting the P90 date. According to the PMI Risk Management Professional (PMI-RMP) Reference Materials, the P90 date is the date that has a 90% probability of being met or exceeded by the project completion1. The Monte Carlo analysis is a simulation technique that generates possible outcomes of the project schedule based on the probability distributions of the activity durations2. The sensitivity analysis is a technique that determines how different sources of uncertainty affect the project objectives, such as the completion date3. Therefore, the project manager should mitigate the risks identified on the sensitivity analysis, as they are the most likely to affect the P90 date. By reducing the uncertainty and variability of the project schedule, the project manager can increase the confidence level of meeting the P90 date. References: 1: PMI, Practice Standard for Project Risk Management, 2009, p. 91 2: PMI, A Guide to the Project Management Body of Knowledge (PMBOK Guide), Sixth Edition, 2017, p. 215 3: PMI, A Guide to the Project Management Body of Knowledge (PMBOK Guide), Sixth Edition, 2017, p. 403
Question 545:
In a project to promote public health and mitigate health risks, the national health authorities intend to take actions to limit the risks of harmful insects by using pesticides; however, it is expected that some residents will have negative health effects due to the use of the pesticides but according to the assessment completed by the health authorities, not moving forward with this plan will have much more serious consequences on public health rather than following through with the original plan.
How should the project manager address this concern with the health authorities?
A. Suspend the project as the secondary risk will negatively impact residents' health which is not acceptable.
B. Consult with health experts to provide a risk trigger before using pesticides that will impact the residents.
C. Assess and record associated secondary risks and proceed to treat them as any other risks.
D. Proceed with the project as normal since a minor number of residents will be effected negatively.
Correct Answer: C
Explanation: The project manager should assess and record associated secondary risks and proceed to treat them as any other risks. This involves identifying and evaluating the potential negative health effects of using pesticides and developing a plan to mitigate these risks. While it is important to consider the concerns of residents, the health authorities have determined that not moving forward with the plan will have more serious consequences on public health.
Secondary risks are those that arise as a direct outcome of implementing a risk response. In this case, the use of pesticides is a risk response to limit the risks of harmful insects, but it may also cause negative health effects to some residents. This is a secondary risk that needs to be assessed and recorded in the risk register, along with its probability, impact, and response plan. The project manager should not suspend the project, as this would ignore the primary risk of harmful insects. The project manager should not consult with health experts to provide a risk trigger, as this is not a valid risk management technique. A risk trigger is an indication that a risk event is about to occur or has occurred, not a condition that prevents a risk response from being implemented. The project manager should not proceed with the project as normal, as this would neglect the secondary risk and its potential consequences. The project manager should follow the risk management process and treat the secondary risk as any other risk in the project. References: PMI. (2017). A Guide to the Project Management Body of Knowledge (PMBOK Guide) Sixth Edition. Chapter 11: Project Risk Management, p.
408. 5
Question 546:
A mega facility development project is evaluating some options to achieve the project schedule and budget. Each option's success is driven by multiple quantifiable factors.
What should the project manager do to evaluate and select the best option based on costs and probabilities?
A. Perform a FMECA fault tree analysis
B. Conduct a sensitivity analysis
C. Perform a decision tree analysis
D. Conduct an analytic hierarchy process
Correct Answer: C
Explanation: A decision tree analysis is a tool that helps to evaluate and select the best option among different alternatives based on costs and probabilities. A decision tree analysis uses a graphical representation of a decision problem, where each node represents a decision point, a chance event, or an outcome. The branches of the tree show the possible choices, events, or consequences that can occur at each node. The end nodes of the tree show the expected value or payoff of each option, which is calculated by multiplying the probability and the cost or benefit of each outcome. A decision tree analysis can help to compare the expected values of different options and choose the one that maximizes the benefit or minimizes the cost1. A decision tree analysis can also help to incorporate uncertainty and risk into the decision making process, as it shows the range of possible outcomes and their likelihoods2. Therefore, the project manager should perform a decision tree analysis to evaluate and select the best option based on costs and probabilities for a mega facility development project. Performing a FMECA fault tree analysis, conducting a sensitivity analysis, or conducting an analytic hierarchy process are not the best options to evaluate and select the best option based on costs and probabilities. A FMECA fault tree analysis is a tool that helps to identify and analyze the potential causes and effects of failures in a system or process. It uses a graphical representation of a failure event, where each node represents a basic or intermediate event that contributes to the failure. The branches of the tree show the logical relationships between the events, using AND or OR gates. A FMECA fault tree analysis can help to calculate the probability and severity of failures, as well as to prioritize and mitigate the risks3. However, a FMECA fault tree analysis does not help to compare different options or alternatives, as it focuses on a single failure scenario. Conducting a sensitivity analysis is a tool that helps to measure how the uncertainty in the input variables of a model affects the output or outcome of the model. It uses a graphical or numerical representation of the relationship between the input and output variables, showing how the output changes when the input changes. A sensitivity analysis can help to identify the most critical or influential variables, as well as to test the robustness or reliability of the model4. However, a sensitivity analysis does not help to compare different options or alternatives, as it focuses on a single model or option. Conducting an analytic hierarchy process is a tool that helps to evaluate and select the best option among different alternatives based on multiple criteria. It uses a mathematical method of pairwise comparison, where each alternative is compared to each other in terms of each criterion. The results of the comparisons are then aggregated into a matrix, which shows the relative importance or preference of each alternative. An analytic hierarchy process can help to rank the alternatives and choose the one that best satisfies the criteria5. However, an analytic hierarchy process does not help to incorporate costs and probabilities into the decision making process, as it relies on subjective judgments and preferences. References: 1, 2, 3, 4, 5. A decision tree analysis is a quantitative risk analysis technique that helps evaluate and select the best option based on costs and probabilities. It visually represents different decision paths and their associated probabilities, allowing the project manager to compare and select the most appropriate option for the project.
Question 547:
At an oil and gas company, a major unified management information system is to be implemented. The project manager noted that risks gathered from the organization's business functions are not properly identified and categorized, making it difficult to develop an effective risk response.
How should the project manager handle this situation?
A. Outsource conducting the risk response plan to risk consultants.
B. Ask functional managers to improve their risk register and process.
C. Adjust the risk response plans to effectively handle the identified risks.
D. Coach the functional groups on how to properly conduct the process.
Correct Answer: D
Explanation: The project manager should provide guidance and coaching to the functional groups on how to properly identify and categorize risks. This will help improve the quality of the risk register and ensure an effective risk response plan can be developed. The project manager should coach the functional groups on how to properly conduct the process of identifying and categorizing risks, as this will help to improve the quality and consistency of the risk information and to facilitate the development of an effective risk response plan. The project manager should also provide guidance and support on how to use the appropriate tools and techniques, such as risk breakdown structure, risk taxonomy, risk checklists, risk interviews, and risk workshops, to elicit and document the risks from different perspectives and sources. By coaching the functional groups, the project manager can also enhance their risk awareness and ownership, and foster a collaborative risk culture within the project. References: The Standard for Risk Management in Portfolios, Programs, and Projects, page 71-72; PMBOK Guide, 6th edition, page 397-398.
Question 548:
In the middle of a construction project, the primary construction materials provider canceled the contract and moved to a competitor offering a higher price. The risk manager considers this a low-impact issue because many construction materials providers can fulfill the project demands. However, after informing the stakeholders of this issue, the major investor is about to drop their intention to continue executing the project. The risk manager does not understand their decision.
What should the risk manager do next to understand the major stakeholder's decision regarding the project?
A. Perform a risk impact analysis.
B. Perform a risk reserve analysis.
C. Perform a procurement analysis.
D. Perform a stakeholder impact and influence analysis.
Correct Answer: D
A stakeholder impact and influence analysis is a technique to identify the level of interest and power of each stakeholder, and to assess how they may affect or be affected by the project outcomes. It can help the risk manager to understand the stakeholder's perspective and expectations, and to communicate with them effectively. In this case, the risk manager should perform a stakeholder impact and influence analysis to understand why the major investor is about to drop their intention to continue executing the project, and to address their concerns and needs. A risk impact analysis, a risk reserve analysis, and a procurement analysis are not relevant to the stakeholder's decision, and would not help the risk manager to understand their rationale. References: PMI Risk Management Professional (PMI-RMP) ontent Outline1, PMI Practice Standard for Project Risk Management2, Risk Management Professional (PMI-RMP) Cert Guide3
Question 549:
During the monthly executive review meeting, the project sponsor would like to understand how the project team has planned to manage risks that were identified in the last meeting. What should the project manager do?
A. Utilize a Monte Carlo assessment to provide risk related impacts.
B. React to the secondary and residual risks only if they occur.
C. Include secondary and residual risks as part of the response.
D. Transfer secondary and residual risks to the project sponsor.
Correct Answer: C
The The project manager should include secondary and residual risks as part of the risk response plan. Secondary risks are those risks that arise as a direct result of implementing a risk response to a specific risk. Residual risks are those risks that are expected to remain after the planned responses of risks have been taken, as well as those that have been deliberately accepted. Both secondary and residual risks should be identified, analyzed, and monitored throughout the project life cycle. The project manager should communicate the risk response plan to the project sponsor and other stakeholders, and explain how the project team has planned to manage the secondary and residual risks12 References: 1: PMI Risk Management Professional (PMI-RMP) Handbook, page 10 2: A Guide to the Project Management Body of Knowledge (PMBOK Guide) Seventh Edition, page 11.2.2.1 project manager should include secondary and residual risks in the risk response plan, as they may still impact the project. Proactively addressing these risks will help the project team to be prepared and manage them effectively if they occur.
Question 550:
An external vendor needs to be contracted to provide additional capacity and expertise to a project team to reduce the probability of delays in a project. The contracts department is raising a concern about confidentiality risks not addressed in the proposed contract and missing from the risk register.
What should the risk manager do next?
A. Assess the identified secondary risk.
B. Implement the risk response plan.
C. Implement the risk contingency plan.
D. Communicate the identified residual risk.
Correct Answer: A
Explanation: According to the PMI Risk Management Professional (PMI-RMP) Examination Content Outline1, a secondary risk is a risk that arises as a direct result of implementing a risk response to a specific risk. In this case, the risk response is to contract an external vendor to provide additional capacity and expertise to the project team. The secondary risk is the confidentiality risk that the contracts department has identified. The risk manager should assess the secondary risk to determine its probability, impact, and priority, and to plan appropriate responses. This is part of the Perform Qualitative Risk Analysis and Plan Risk Responses processes 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
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