A risk manager manages risks in a construction project. A stakeholder mentions that if there is less than a 50% chance of rain, construction should continue. Another stakeholder says that if there is less than a 60% chance of rain, construction should continue.
What should the risk manager do next to find out the correct limit?
To determine the correct limit for continuing construction in the event of rain, the risk manager should review the agreed-upon risk tolerance for the project. Risk tolerance is a predefined threshold that indicates the level of risk that the project team is willing to accept. By referring to this agreed-upon risk tolerance, the risk manager can align the project decisions with the pre-established boundaries, ensuring coherence and avoiding conflicts among stakeholders.
C. Review the agreed-upon risk tolerance If different stakeholders have different views on the acceptable level of risk related to rain and construction, it is important for the risk manager to review the agreed-upon risk tolerance for the project. The risk tolerance is the level of risk that the project team is willing to accept in order to achieve the project's objectives. To determine the correct limit for construction in the event of rain, the risk manager should review the agreed-upon risk tolerance and consider the potential impacts of different levels of risk on the project. This may involve performing a sensitivity analysis of the risk to understand how different levels of risk will affect the project schedule, budget, and other project objectives. By reviewing the agreed-upon risk tolerance and performing a sensitivity analysis, the risk manager can help to ensure that the project team is making informed and strategic decisions about risk management.