Project Management Professional (PMP)® Examination Content OutlineProcessMedium
A project manager is leading a global product launch project. During the planning phase, the team identifies a potential risk that a key component supplier (located in a politically unstable region) might fail to deliver on time, causing significant delays. The project manager and team decide to identify an alternative supplier in a different region and establish a backup contract, even though it adds a small cost. Which risk response strategy has been employed?
- ATransfer
- BAccept
- CExploit
- DMitigate
Show answer & explanationAnswer & explanation
Correct answer: D. Mitigate
Identifying an alternative supplier and establishing a backup contract is an action taken to reduce the probability or impact of a negative risk (threat). This falls under the 'Mitigate' risk response strategy.
Why the other options are wrong
- A. Transferring shifts the risk to a third party (e.g., insurance), not finding an alternative supplier.
- B. Acceptance involves doing nothing or having a contingency plan, not proactive reduction.
- C. Exploit is a strategy for positive risks (opportunities), not threats.
Risk Mitigation
A risk response strategy that involves taking action to reduce the probability of a threat occurring or to reduce its impact if it does occur.
- Proactive measures are taken before the risk event.
- Aims to decrease likelihood or consequence.
- Different from acceptance (doing nothing) or transfer (shifting risk).
Memory trick: Avoid, Mitigate, Transfer, Accept – bad risks, don't forget the steps.