PMI-RMP · Question #618
A project manager has requested the risk manager's support in deciding whether to purchase a new component to expedite project execution. The component price is US$100,000 and there is a 30% chance th
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Question
A project manager has requested the risk manager's support in deciding whether to purchase a new component to expedite project execution. The component price is US$100,000 and there is a 30% chance that it might not function as expected resulting in an additional US$50,000 cost However, if the component does work well the project will make a profit of USS500.000. If the component is not purchased, there is an 80% chance of failure with an impact of US$250 000. What should the risk manager recommend?
Options
- AThe new component should be purchased.
- BBoth options are losses to the project.
- CCost to expedite the execution is not worth the added risk.
- DPerform a Monte Carlo simul-ation to quantify the impacts.
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