PK0-005 Question #133: Real Exam Question with Answer & Explanation

The correct answer is A: Decision tree. A decision tree is the best chart to calculate the expected monetary value (EMV) for vendor choices as it visually maps out decision points, possible outcomes, and their associated probabilities and financial impacts.

Project Management Concepts

Question

When trying to calculate the expected monetary value for using a particular vendor, which of the following charts would be BEST to use?

Options

ADecision tree
BFishbone
CHistogram
DPareto

Explanation

A decision tree is the best chart to calculate the expected monetary value (EMV) for vendor choices as it visually maps out decision points, possible outcomes, and their associated probabilities and financial impacts.

Common mistakes.

B. A fishbone (Ishikawa or cause-and-effect) diagram is used for root cause analysis to identify potential causes of a problem, not for calculating monetary value.
C. A histogram is a bar chart that displays the frequency distribution of numerical data, used for showing data patterns, not for EMV calculations.
D. A Pareto chart is a type of bar chart that shows the frequency of occurrences in descending order, along with a cumulative percentage line, primarily used for identifying the most significant factors in a problem.

Concept tested. Quantitative risk analysis - expected monetary value (EMV)

Reference. https://www.pmi.org/pmbok-guide-standards/foundational/pmbok/expected-monetary-value-emv

Topics

#Expected Monetary Value (EMV)#Decision Tree#Risk Management#Decision Making Tools

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