The correct answer is C. Perform a quantitative risk analysis to determine the potential financial impact of government-related delays.
The key phrase in this question is that the sponsor wants the risk manager to estimate the potential costs associated with delays . Once cost impact needs to be measured numerically, the appropriate approach is quantitative risk analysis . Quantitative analysis is used when the organization needs a numerical estimate of risk effects on project objectives such as cost and schedule.
In this case, the delays caused by bureaucratic and administrative processes need to be translated into potential financial impact. That means the risk manager should use quantitative techniques to evaluate possible cost exposure and support decision-making.
Why the other options are incorrect:
A. Create a risk register to document all potential risks and estimated impacts, including delays due to government employees. The risk register is important for documentation, but it does not itself provide the analytical method needed to estimate financial impact in measurable terms.
B. Develop a risk response plan that includes specific mitigation strategies for government-related delays. Response planning comes after the risk has been sufficiently analyzed. The question is specifically asking how to estimate the potential costs first.
D. Conduct a qualitative risk analysis to assess the likelihood and impact of potential delays. Qualitative analysis helps rank or prioritize risks using relative scales such as low, medium, or high. It does not produce the detailed monetary estimate the sponsor requested.
Best-practice reasoning:
When management needs to understand the numeric cost consequences of uncertainty, quantitative analysis is the correct tool. It supports contingency planning, reserve estimation, and better-informed stakeholder decisions.
Reference-aligned basis:
This answer is consistent with standard risk management guidance that emphasizes:
quantitative analysis for numerical evaluation of cost and schedule impacts,
use of quantified exposure to support planning and decision-making,
distinction between qualitative prioritization and quantitative estimation.
[References:, PMI, A Guide to the Project Management Body of Knowledge (PMBOK® Guide), Perform Quantitative Risk Analysis, PMI, Practice Standard for Project Risk Management, ISO 31000, risk analysis and evaluation principles, , ]
