Types of Risk Responses in Project Management

B.

Adrian has used the risk response of transference. Transference is the act of shifting the risk to a third party, such as a vendor or an insurance company, that is better equipped to manage the risk. In this case, Adrian has decided to hire a vendor to complete all the work packages that deal with electrical wiring, thereby transferring the risk of electrical wiring to the vendor. By doing so, Adrian believes that the vendor, as a licensed electrician, is better equipped to handle the risks associated with electrical wiring than her project team.

This approach has several advantages. First, it allows Adrian to focus on her project's core competencies while outsourcing the risk to a third party. Second, it reduces the project's overall risk exposure by shifting the risk to the vendor. Third, it enables Adrian to take advantage of the vendor's expertise, resources, and experience, thereby increasing the likelihood of project success.

However, there are also some disadvantages to this approach. For example, the vendor may not be able to manage the risk effectively, which could result in delays, cost overruns, or quality issues. Additionally, the vendor may not be able to respond quickly to unexpected events, such as equipment failures, weather conditions, or labor shortages, which could disrupt the project's schedule and budget.

In conclusion, Adrian has used the risk response of transference by hiring a vendor to complete all the work packages that deal with electrical wiring. While this approach has several advantages, it also has some disadvantages that should be considered before implementing it.