Selection of risk response actions with consideration of secondary risks

Secondary risk in project risk management refers to the risk that arises as a direct result of implementing a risk response action (RRA). It is important for project managers (PMs) to consider the effects caused by the secondary risks in the process of RRA selection. The purpose of this paper is to propose an optimization method to address the problem of selecting risk response actions (RRAs) with consideration of secondary risk which is seldom considered in the existing studies. The optimization model aims to minimize the total risk costs with time constraint being placed on the project makespan. By solving the model, an optimal set of RRAs along with the earliest start time for each activity can both be obtained. The results show that secondary risk plays an important role in the process of RRA selection. Project managers should allocate more budget for responding the project risk when the secondary risk is considered, and consider all factors relating to both time and cost so as to select appropriate RRAs to mitigate primary risk and secondary risk.