Adrian is the project manager of the NHP Project. In her project there are several work packages
that deal with electrical wiring. Rather than to manage the risk internally she has decided to hire a
vendor to complete all work packages that deal with the electrical wiring. By removing the risk
internally to a licensed electrician Adrian feels more comfortable with project team being safe.
What type of risk response has Adrian used in this example?

A.
Acceptance

B.
Avoidance

C.
Mitigation

D.
Transference

Explanation:
This is an example of transference. When the risk is transferred to a third party,
usually for a fee, it creates a contractual-relationship for the third party to manage the risk on
behalf of the performing organization. Risk response planning is a method of developing options to
decrease the amount of threats and make the most of opportunities. The risk response should be
aligned with the consequence of the risk and cost-effectiveness. This planning documents the
processes for managing risk events. It addresses the owners and their responsibilities, risk
identification, results from qualification and quantification processes, budgets and times for
responses, and contingency plans. The various risk response planning techniques are as follows:
Risk acceptance: It indicates that the project team has decided not to change the project
management plan to deal with a risk, or is unable to identify any other suitable response strategy.
Risk avoidance: It is a technique for a threat, which creates changes to the project management
plan that are meant to either eliminate the risk or to protect the project objectives from this impact.
Risk mitigation: It is a list of specific actions being taken to deal with specific risks associated with
the threats and seeks to reduce the probability of occurrence or impact of risk below an acceptable
threshold. Risk transference: It is used to shift the impact of a threat to a third party, together with
the ownership of the response.