PMP practice question 29 of 35

During execution, your team uncovers a technical risk that could require significant rework if it materializes. A senior engineer proposes a…

Domain Process

During execution, your team uncovers a technical risk that could require significant rework if it materializes. A senior engineer proposes a preventive solution that would add 80 hours of effort now, reducing the probability of the risk from 60% down to 15%. The sponsor's budget is tight, and she has asked you not to add scope without her explicit approval. However, waiting to see if the risk occurs could result in 400 hours of rework plus schedule delay. What should you do?

Answer options

A: Authorize the 80 hours of preventive work immediately without consulting the sponsor, since preventing rework is always more cost-effective

B: Perform a quantitative risk analysis to calculate the expected monetary value of taking preventive action versus accepting the risk, then present the analysis and recommendation to the sponsor with full transparency about trade-offs Correct answer

C: Decline the preventive work to stay within the approved scope and budget, and implement a contingency plan only if the risk materializes

D: Ask the engineer to find a cheaper solution that requires less than 40 hours so that you can proceed without sponsor approval

Correct Answer:

B. Perform a quantitative risk analysis to calculate the expected monetary value of taking preventive action versus accepting the risk, then present the analysis and recommendation to the sponsor with full transparency about trade-offs

Explanation

According to PMI principles, project managers must proactively manage risks and use data-driven techniques like Expected Monetary Value (EMV) to evaluate risk responses. The EMV of the current risk exposure is 240 hours (60% of 400), while the preventive action's EMV is 140 hours (80 hours + 15% of 400). Because the sponsor explicitly requested no scope additions without approval due to a tight budget, the project manager cannot unilaterally authorize the work. The correct approach is to quantify this cost-benefit trade-off and present the analysis to the sponsor. This facilitates an informed, transparent decision regarding the necessary budget and scope changes through the Perform Integrated Change Control process.

Why Incorrect

A: Bypasses the sponsor's explicit instructions regarding scope and budget changes, violating stakeholder engagement and integrated change control processes. C: Passively accepting the risk without presenting the highly cost-effective preventive option to the sponsor fails the project manager's duty to optimize project outcomes. D: Arbitrarily seeking a cheaper solution to bypass the sponsor's authority is unprofessional and violates the explicit requirement for sponsor approval on scope changes.

References

1. Project Management Institute (PMI). (2017). A Guide to the Project Management Body of Knowledge (PMBOK® Guide) (6th ed.). Section 11.4.2.2 Data Analysis (Expected Monetary Value analysis), pp. 435-436.

2. Project Management Institute (PMI). (2017). A Guide to the Project Management Body of Knowledge (PMBOK® Guide) (6th ed.). Section 4.6 Perform Integrated Change Control, pp. 113-115.

3. Project Management Institute (PMI). (2021). A Guide to the Project Management Body of Knowledge (PMBOK® Guide) (7th ed.). Section 2.8 Measurement Performance Domain (Risk), pp. 122-127.

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