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CAPM Practice: Demonstrate an understanding of project management planning

Question 28 of 100 in Demonstrate an understanding of project management planning

Sergei Bose is managing a product development project at Circuitry Labs. A risk has been identified: 'Key supplier may not deliver components on time.' The risk register shows this has high probability and high impact. The team decides to contract with a backup supplier at additional cost. What risk response strategy is being used?
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Correct answer: Mitigate, because the team is reducing the probability of the risk occurring

Explanation

This is risk mitigation. By contracting with a backup supplier, the team is taking action to reduce the probability that a delivery delay will impact the project, even though it comes at additional cost.

**Why not A:** Acceptance means acknowledging the risk without taking proactive action. Contracting with a backup supplier is an active, cost-incurring measure to reduce the likelihood of a delivery delay impacting the project — this is mitigation, not acceptance.

**Why not B:** Risk transfer shifts the financial impact of a risk to a third party, typically through insurance or contractual agreements. The backup supplier arrangement does not shift the risk to another party; it reduces the probability of the risk impacting the project.

**Why not C:** Risk avoidance eliminates the threat entirely by changing the project plan. The team is not eliminating the original supplier or the possibility of delay; they are reducing the probability of impact by having an alternative ready, which is mitigation.

Key Concept

This question covers Demonstrate an understanding of project management planning under Demonstrate an understanding of project management planning (Project Management Fundamentals and Core Concepts).

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