Risk Treatment Methods Assignment: Analysis, Solutions, and Examples

This assignment analyzes various risk treatment methods within the context of project management. It addresses four key methods: risk transfer, risk sharing, risk avoidance, and risk acceptance. The solution provides definitions and examples for each method, illustrating how they can be applied in different scenarios. Risk transfer involves shifting the risk to a third party, risk sharing distributes risks among multiple entities, risk avoidance eliminates the risk entirely, and risk acceptance involves acknowledging the risk and its potential impact. The assignment uses case-specific examples to explain each method, enhancing the understanding of how to effectively manage project risks. The provided references support the analysis and provide a foundation for further exploration of risk management principles. The assignment follows a question-and-answer format, addressing the practical application of the concepts.

Running head: RISK TREATMENT METHOD
Risk Treatment Method
Name of the Student:
Name of the University:

1RISK TREATMENT METHOD
Answer to question 1:
Transfer risk treatment method is used in this case. In this case, the risk is to be
transferred to the third party. Risk transfer is a realistic approaches to the risk management as
it can accept that sometimes they are possibilities of occurrence of incidents, yet it can ensure
that the business can prepare to cope with the impact of the risks (Hopkin 2018).
Answer to question 2:
Sharing risk treatment method is used in this case. It is the distribution of the risks to
various organization in addition to individuals. It is performed by various reasons such as
insurance products plus self-insurance strategies (Glendon and Clarke 2015). The
organization can share the project risks when each one can understand project deliverables as
well as expecations properly. In this case, the risks are to be shared by closely working
business partners.
Answer to question 3:
Transference of the risks means there is outsourcing of the business unit and
functions, removed it from the organization and contract with others entity to do the project
work. Therefore, it means there is outsourcing of the project risks (McNeil, Frey and
Embrechts 2015). Outsourced function is far outside of business core competency as well as
main mission of the organization.
Answer to question 4:
Risk avoidance is elimination of the project risks, activities plus exposures which can
provide negative effect on the assets of the project organization.

2RISK TREATMENT METHOD
Risk acceptance is a method is occurred when the cost to manage the project risk is to
be accepted as the risk is being involved is not proper enough to warrant added cost (Aven
2016).

3RISK TREATMENT METHOD
References
Aven, T., 2016. Risk assessment and risk management: Review of recent advances on their
foundation. European Journal of Operational Research, 253(1), pp.1-13.
Glendon, A.I. and Clarke, S., 2015. Human safety and risk management: A psychological
perspective. Crc Press.
Hopkin, P., 2018. Fundamentals of risk management: understanding, evaluating and
implementing effective risk management. Kogan Page Publishers.
McNeil, A.J., Frey, R. and Embrechts, P., 2015. Quantitative Risk Management: Concepts,
Techniques and Tools-revised edition. Princeton university press.