This situation requires collaborative decision-making and a strategic approach, considering the external nature of the risk. While seeking alternative suppliers could be part of a broader solution, doing so independently might not be the most effective approach. Option C: Independently seek alternative suppliers for raw materials in an attempt to maintain cost objectives. Given the external nature and significant impact of the risk, this option is appropriate for Sophia to pursue as an immediate action. It acknowledges the complexity and scope of the risk and involves those with the authority and resources to make strategic decisions. Escalating the issue to higher management and relevant stakeholders is a strategic and proactive approach. Option B: Escalate the issue to higher management and relevant stakeholders for strategic guidance and decision-making. It fails to address the need for active risk management and could lead to project failure. Given the project’s critical cost-saving KPIs and the high impact of the risk, a passive approach is not advisable. This option represents a passive approach to risk management, essentially accepting the risk without proactive action. Option A: Wait for the geopolitical situation to stabilize, hoping material costs will decrease. Sophia recognizes that the challenge is beyond her role’s scope, necessitating a strategic response to manage this risk effectively. This risk threatens the project’s key objective of achieving cost savings. In this manufacturing project, project manager Sophia is faced with a significant risk due to recent geopolitical shifts causing an increase in the cost of critical raw materials. What should her immediate action be to effectively manage this risk?Ī) Wait for the geopolitical situation to stabilize, hoping material costs will decrease.ī) Escalate the issue to higher management and relevant stakeholders for strategic guidance and decision-making.Ĭ) Independently seek alternative suppliers for raw materials in an attempt to maintain cost objectives.ĭ) Propose revising the project’s cost-saving targets in consultation with stakeholders, given the changed circumstances. ![]() Sophia recognizes this challenge is beyond her role’s scope. ![]() Recent geopolitical shifts have caused a sharp increase in the cost of critical raw materials, threatening the project’s cost-saving goals. In a manufacturing project aimed at achieving significant cost savings, project manager Sophia encounters a risk that jeopardizes the project’s key outcome.
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