You are the project manager of a new project in your organization. You and the project team have identified the project risks, completed risk analysis, and are planning the most appropriate risk responses. Which of the following tools is most effective to choose the most appropriate risk response?

A.
Cause-and-effect diagrams

B.
Delphi Technique

C.
Decision tree analysis

D.
Project network diagrams

Explanation:

Decision tree analysis is the most effective tool to choose for appropriate risk responses. Decision tree analysis is a risk analysis tool that can help the project manager determine the best risk response. The tool can be used to measure probability, impact, and risk exposure and how the selected risk response can affect the probability and/or impact of the selected risk event. It helps to form a balanced image of the risks and rewards connected with each possible course of action. This makes them mostly useful for choosing between different strategies, projects, or investment opportunities particularly when the resources are limited. A decision tree is a decision support tool that uses a tree-like graph or model of decisions and their possible consequences, including chance event outcomes, resource costs, and utility.
Answer option A is incorrect. Cause and effect diagrams are useful for identifying root causes and risk identification, but they are not the most effective ones for risk response planning. Answer option D is incorrect. Project network diagrams help the project manager and stakeholders visualize the flow of the project work, but they are not used as a part of risk response planning. Answer option B is incorrect. The Delphi Technique can be used in risk identification, but generally is not used in risk response planning. The Delphi Technique uses rounds of anonymous surveys to identify risks. Reference: "Project Management Body of Knowledge (PMBOK Guide), Fourth edition"