PMI-SP Risk Analysis & Contingency Planning 4 — Questions and Answers
Question 1: A project scheduler performs quantitative risk analysis and determines the project has a 40% chance of meeting the baseline completion date. The sponsor requires 90% confidence. What action is MOST appropriate?
- Report to the sponsor that 40% is acceptable industry standard
- Add schedule contingency reserves until the model shows 90% confidence (Correct answer)
- Remove activities from the critical path to reduce duration
- Switch from quantitative to qualitative analysis to get a better result
Correct answer: Add schedule contingency reserves until the model shows 90% confidence
To achieve the sponsor's required confidence level, schedule contingency must be added until the Monte Carlo model reflects a 90th percentile completion date matching the target.
Question 2: Which of the following is an example of a risk AVOIDANCE strategy in schedule management?
- Purchasing insurance for equipment delivery delays
- Eliminating a high-risk activity by using a proven alternative technology (Correct answer)
- Accepting the risk and monitoring it throughout the project
- Transferring responsibility for a late-delivery risk to the vendor via contract
Correct answer: Eliminating a high-risk activity by using a proven alternative technology
Avoidance eliminates the risk entirely by changing the plan—such as replacing an untested technology with a proven one to eliminate schedule uncertainty.
Question 3: A risk breakdown structure (RBS) is MOST useful in schedule risk management for:
- Documenting the final list of risks after the project is complete
- Organizing and categorizing risks to identify patterns and ensure coverage (Correct answer)
- Replacing the work breakdown structure when risks are too numerous
- Calculating the expected monetary value of all identified risks
Correct answer: Organizing and categorizing risks to identify patterns and ensure coverage
The RBS hierarchically categorizes risks (technical, external, organizational, etc.) to help teams systematically identify risks and analyze root causes.
Question 4: When conducting a risk review meeting, the scheduler notes that a previously identified risk has not materialized but a new risk has emerged. The CORRECT action is to:
- Keep the original risk open and ignore the new risk until next month
- Close the resolved risk and add the new risk to the risk register with full analysis (Correct answer)
- Remove all risks from the register and start fresh
- Escalate immediately to the project sponsor before updating the register
Correct answer: Close the resolved risk and add the new risk to the risk register with full analysis
Risk registers are living documents; risks that do not materialize should be closed, and newly identified risks must be added, analyzed, and assigned responses.
Question 5: A project has near-critical paths with only 2 days of total float. What schedule risk management action is MOST important for these paths?
- Ignore them because they are not on the critical path
- Monitor them closely because any delay could make them critical (Correct answer)
- Compress them immediately using fast-tracking
- Transfer all activities on near-critical paths to a subcontractor
Correct answer: Monitor them closely because any delay could make them critical
Near-critical paths with minimal float are highly vulnerable to becoming critical if risks materialize, requiring vigilant monitoring throughout execution.
Question 6: In the context of PMI-SP, what does 'risk appetite' mean for schedule management decisions?
- The total number of risks a project can have before it is cancelled
- The degree of uncertainty an organization is willing to accept regarding schedule outcomes (Correct answer)
- The maximum contingency reserve allowed by the project sponsor
- The frequency with which risk reviews should be conducted
Correct answer: The degree of uncertainty an organization is willing to accept regarding schedule outcomes
Risk appetite defines how much schedule uncertainty and potential delay an organization is willing to tolerate, guiding the level of contingency reserves and response strategies selected.
Question 7: A project scheduler applies the PERT formula to estimate activity duration: (O + 4ML + P) / 6. If the optimistic estimate is 4 days, most likely is 7 days, and pessimistic is 16 days, what is the PERT estimate?
- 9 days
- 7.67 days
- 9 days
- 8 days (Correct answer)
Correct answer: 8 days
PERT = (4 + 4×7 + 16) / 6 = (4 + 28 + 16) / 6 = 48 / 6 = 8 days.
PMI-SP Risk Analysis & Contingency Planning 4
A project scheduler performs quantitative risk analysis and determines the project has a 40% chance of meeting the baseline completion date.
The sponsor requires 90% confidence.
What action is MOST appropriate?