CompTIA Project+ (PK0-005)Project Management ConceptsHard
A large manufacturing company is considering two potential projects: Project A, which involves upgrading existing factory machinery to improve efficiency, and Project B, which focuses on developing a completely new, innovative product line. Project B carries significantly higher technical uncertainty and market risk. Which risk response strategy would be MOST appropriate for Project B's high technical uncertainty?
- AAcceptance
- BTransference
- CMitigation
- DExploitation
Show answer & explanationAnswer & explanation
Correct answer: C. Mitigation
For high technical uncertainty, mitigation is often the most appropriate strategy. This involves taking steps to reduce the probability or impact of the risk. Examples include prototyping, conducting extensive testing, or investing in R&D to resolve technical unknowns before full-scale implementation. Acceptance passively acknowledges the risk, transference shifts it, and exploitation is for positive risks (opportunities).
Why the other options are wrong
- A. Acceptance is suitable for low-impact or low-probability risks, not high technical uncertainty.
- B. Transference shifts the risk to a third party (e.g., insurance), which doesn't directly address technical uncertainty.
- D. Exploitation is a strategy for opportunities (positive risks), not threats like technical uncertainty.
Risk Mitigation
A risk response strategy that aims to reduce the probability of a threat occurring, or reduce its impact if it does occur.
- Proactive approach to reduce risk exposure.
- Often involves implementing new processes, conducting tests, or adding redundancy.
- Commonly used for high-probability/high-impact risks.
Memory trick: Avoid, Transfer, Mitigate, Accept – For threats, these are your steps.