Risk Management Question 25

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A project team is trying to decrease the risk on the project. Management has a good relationship with the seller who has experience in the areas your company is not experienced in. management wants all activities with a US$ 40,000 or higher risks to be transferred to the seller. Management believes that this will remove the impact of those higher risks from the project. Why would this not be effective?

a) Working with sellers will add more than $40,000 of the risk to the project.
b) You would have to go through the contracting process
c) The transference of the risk does not remove all impacts of the risk
d) Management’s association with the seller is a conflict of interest for the project

[admin]

The correct answer is C.

Choice A is wrong. It is certainly true that some form of contracting process (choice B) must be allowed, but it is not the reason the choice would not be effective and there is no conflict of interest in this case (choice D). Understand that not all risk is transferred using a contract (choice C).

Pass PMP in the First Attempt : PMP Strategy

Revise Risk Management Concepts: Project Risk Management

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