Question

During quantitative risk analysis on a predictive infrastructure project, the team identifies several high-probability, high-impact threats with known potential cost impacts. The sponsor asks the project manager how the budget will account for these identified risks should they occur. What should the project manager do?

Accepted Answer

Include a contingency reserve in the cost baseline, calculated based on the analyzed identified risks

Answer

Request a management reserve from the sponsor to be held outside the cost baseline for these risks

Answer

Add a flat 10% padding to each cost estimate to absorb any risk that materializes

Answer

Defer budgeting for the risks until they actually occur, then submit change requests