Question

.Why is your knowledge of Risk appetite and Risk threshold important in your Risk response strategy?

2.You had planned in your risk response to engage two additional programmers during the implementation stage of your project. Suddenly you realized that you may need a total of three. What are three possible things that you must do to ensure that the project is not delayed?

3.You are the project manager of a software development company. Your company receives supplies of chips from a foreign supplier. Their sales manager has approached you to inform you that if you can increase your order by 30%, the shipment will be free for your organization. This however will bring additional cost of $100 on your current budget that is $5000 p.a. What type of Risk is this? Identify at least three things you can do in response given consideration to best practices?

4.You have on your schedule to receive street light products from your regular vendor in July 2020.On the 10^th June 2020, you learnt from the news that the Vendor’s warehouse has been destroyed by fire and that they may not be able to recover in the next 12 months.

What type of Risk is this? Mention 4 possible things you will do?

5.Give 2 examples for each of the followings Risks that may apply to your project, 1Known unknown, 2 Unknown unknowns

Answer 1

Answer 1:

In risk management, risk appetite and risk threshold refers to the level of risk that an organization is prepared to accept. Risk appetite constraints are not easy to define as every organization can tolerate different levels of risk.

Depending on the nature of the business and the operations it carries out, there are varying risk appetite and threshold for different organisations. Some of the organisations have a high level of tolerating the risk while some have lower level for risk appetite.

Risk threshold and risk appetite helps an organisation in assessing their capacity for handling the risk in case of its occurrence.