1) Figure 1 presents a probability and impact (PI) matrix as described by PMI (PMBOK, 2008, p.

292), assuming that both probability and impact scores will vary between 0.10 and 0.90.

Figure 1 Source: Author 2) Based on the organizations PI matrix rating scale, Figure 2 is divided in three colored areas (Sanghera, 2010) where the 8 risks identified for the project are classified according to their impact on the project schedule: the green area contains low-priority risks (R1, R3 and R7), the yellow area contains medium-priority risks (R2, R4 and R8) and the red area contains high-priority risks (R5 and R6).

Figure 2 Source: Author 3) Figure 3 presents the additional cost per activity that should be budgeted if the project team decides to address both high and medium risks instead of only addressing the high risks.

Figure 3 Source: Author

4) Based on the changes reported by the project team, the PI matrix has been updated to reflect the current risk categorisation, as presented on Figure 4.

Figure 4 Source: Author In the same way, Figure 5 shows the impact of the reported changes in the project budget.

Figure 5 Source: Author

Considering the changes reported by the project team, R4 is no longer impacting the project, and R6 and R7 have been now categorized as low-priority risk and high-priority risk respectively (as shown on Figure 4). The new risk categorization has also an impact on the project budget: where previously it had been allocated an additional cost in case of occurrence of risks of 11,055 pounds, that sum now has been updated to 10,700 pounds, a variation of 3.2% (as shown on Figures 3 and 5). In the new risk categorization, the top 4 risks are: (in priority order) R5, R7, R2 and R8. As a project manager, I would recommend the following response strategies and actions for the top 4 risks: Risk 5 (High-priority) Market research may take longer time to complete than planned because the time to reach the prospects that need to be interviewed is longer than anticipated. This, in turn, may delay the launch of the Mint Cake. Recommended strategy Avoid. Action Outsource the market research process to an experienced company that has enough experience and resources to meet the schedule. R7 (High-priority) The in-house tasting expert may not be available on the scheduled date to provide inputs, which would cause delays in the schedule for the launch of the Mint Cake. Recommended strategy Avoid. Action Hire a new tasting expert. R2 (Medium-priority) The pastry cook may not be available to make the Mint Cake; hence, a new cook needs to be recruited. Recommended strategy Avoid. Action Hire a new cook. R8 (Medium-priority) The external tasting expert may not be available on the scheduled date to provide inputs, thereby causing delays in the schedule of the launch of Mint Cake. Recommended strategy Avoid. Action Initiate screening and selection processes for a new tasting expert, and only hire selected candidate once external tasting expert confirms he wont be available.

Reference List Project Management Institute Inc. (2008) A Guide to the Project Management Body of Knowledge (PMBOK th Guide). 4 ed. Pennsylvania: Project Management Institute Inc. Sanghera, P. (2010) PMP Exam In Depth, Second Edition: Project Management Professional Study Guide for the PMP Exam. 2nd ed. Boston: Course Technology/Cengage Learning.