To effectively inform the identification of resource requirements for individual risk responses, the risk

manager should undertake the following actions:

1. Conduct Decision Tree Analysis: Collaborate with the project team to perform decision tree

analysis for each risk or related set of risks. This technique involves mapping out different decision

paths and their possible outcomes, including associated risks, probabilities, and impacts. By

visualizing these scenarios, the team can evaluate the potential consequences of various decisions

and choose the most effective risk response strategies.

2. Calculate Expected Monetary Value (EMV): Determine the EMV for each identified risk by

multiplying the probability of occurrence by the potential financial impact. This quantitative analysis

provides a monetary value representing the average expected loss or gain from a risk. Utilizing EMV

calculations aids in justifying and allocating appropriate project reserves to address potential risks,

ensuring that sufficient resources are available for effective risk management.

3. Prioritize High-Impact Risks: Allocate attention and resources primarily to risks that pose the

highest potential impact on the project. By focusing on high-impact risks, the team ensures that

critical threats are addressed promptly and effectively, optimizing the use of limited resources and

enhancing the likelihood of project success.

PMI Risk Management Study Guide Reference:

The PMI-RMP Exam Content Outline emphasizes the importance of performing quantitative risk

analysis, including techniques such as decision tree analysis and EMV calculations, to inform risk

response planning and resource allocation.