Mary is the project manager of the HGH Project for her company.
She and her project team have agreed that if the vendor is late by more than ten days they will cancel the order and hire the NBG Company to fulfill the order.
The NBG Company can guarantee orders within three days, but the costs of their products are significantly more expensive than the current vendor.
What type of a response strategy is this?
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A. B. C. D.A.
The correct answer is A. Contingent response strategy.
Explanation:
A contingent response strategy involves defining specific actions that will be taken if a particular risk event occurs. In this case, Mary and her project team have agreed to cancel the order and hire the NBG Company if the current vendor is late by more than ten days. This is a contingency plan to manage the risk of late delivery by the vendor.
Expert judgment involves using the knowledge and experience of subject matter experts to identify and assess risks. In this scenario, Mary and her team have made the decision based on a specific condition rather than the input of a subject matter expert.
Internal risk management strategies involve managing risks within an organization through policies, procedures, and controls. The scenario does not describe any internal risk management strategies.
External risk response involves transferring or sharing risks with external entities such as insurance companies or contractors. In this scenario, the decision to hire the NBG Company is a form of external risk response, but it is specifically a contingent response strategy.